Crypto media firm Decrypt raises some privacy concerns over using Ethereum Name Service

ConsenSys-backed media outfit Decrypt recently tracked and analyzed the on-chain actions of over 130,000 Ethereum Name Service (ENS) accounts. ENS allows users to replace their alphanumeric Ethereum addresses with a name, similar to how "email addresses [once] replaced clunky pieces of code." But the improvement in user design removed the layer of privacy provided by pseudonymous addresses. Since Ethereum data is publicly accessible, Decrypt found it could more easily link ENS names and their financial history to an owner's real identity.

Why it matters:

• In these early days, every design decision comes with a tradeoff, whether that be usability vs. privacy, composability vs. cross-application dependency risks (see: attacks on bZx), or the Scalability Trilemma. Users and developers should take note of the implications of each design choice to understand the potential risks better.
• Decrypt's article highlights the need for "greater privacy on Ethereum." While user awareness of best practices can hinder traceability, several projects are working on integrating more advanced privacy solutions into Ethereum, such as Aztec Protocol (which recently launched on the Ethereum mainnet) and Ernst & Young's ZKP iteration. As noted in our Crypto Theses for 2020, privacy guarantees for certain Ethereum contracts should continue to improve thanks to the Istanbul hard fork, which reduced the gas costs necessary to power contracts "that incorporate zero-knowledge privacy technologies."