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Privacy is a hugely important aspect in crypto and it's often ignored altogether. But I'd argue for a crypto to become successful as a currency it needs to have robust private transactions. Otherwise users run the risk of their physical identity being connected to their addresses, and by extension they risk getting robbed, physically intimidated to revealing their private keys, being extorted by malicious entities and just having their embarrassing purchases becoming public knowledge.

Stellar has plans to implement lightning network and that will increase Stellar's privacy. My understanding is that the parties of the lightning network participating in the transactions will be the only ones aware of the transaction flows. But it still not perfect privacy as it lets third parties inspect people's transactions. I'm also not sure if it will offer enough guarantee of no outside party being able to deduce the connection between the sending and receiving addresses unless there is huge amount of traffic in the network.

My question is, will LN be enough to guarantee acceptable privacy, and are there any other measures being planned to support privacy?

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Per Jed's interview on the podcast "Block Zero", he envisions banks or "pool accounts" playing a role here. The federation server in Stellar network can link a public facing address like Adam@domain.com to a public key AND memo combination. This enables multiple accounts to be stored under one public key, shielding individual balances.

  • I think that's happening with some exchanges already using the same address for multiple people's balances. It's of course a solid solution for those who are willing to trust external parties to hold their funds and protect their identities. I'll leave this open for a while to see if there will be any other insights on the matter as well – sosmo Feb 13 '18 at 19:00

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