Privacy Protection Method for Blockchain Transactions Based on the Stealth Address and the Note Mechanism

Abstract

Blockchain is a distributed ledger technology that possesses characteristics such as decentralization, tamper resistance, and programmability. However, while blockchain ensures transaction openness and transparency, transaction privacy is also at risk of being exposed. Therefore, this paper proposes the blockchain transaction privacy protection method based on the stealth address and the note mechanism to address the privacy leakage risk in blockchain public environments. Firstly, the proposed method generates a random seed known only to the parties involved based on the Diffie–Hellman key exchange protocol, ensuring the privacy of transactions. Then, it utilizes the Note Commitments table to maintain the binding relationship between the stealth address and the corresponding note, enabling efficient transfer and verification of note ownership. The uniqueness of the stealth address is utilized as an invalidation identifier for notes in the Nullifier table, ensuring efficient verification of the correctness of note invalidation identifiers. Additionally, this method employs Pedersen commitment and Bulletproofs range proof to generate proof of the legality of transaction amounts, enabling the concealment of transaction amounts and facilitating private transactions between the parties involved. Finally, this paper presents a detailed performance analysis, implementation, and testing of the method. From the results, it can be concluded that the method proposed can effectively prevent fraudulent behavior by various transaction participants and ensure the security, privacy, and integrity of the transaction. Critical processes consume only milliseconds, and the related commitments and proofs are also minimal, which is crucial for controlling transaction costs. At the same time, this method achieves a completely decentralized privacy transaction solution.