Stealth addresses Stealth addresses are random one-time addresses, created automatically by the sender’s wallet software for each of his outgoing transactions. Although the recipient party may publish just one address, that address never appears on the blockchain. Instead, funds directed to him in each transaction are sent to a unique blockchain address, which cannot be traced or linked to other addresses belonging to him. By that, the sender and receiver alone can verify where a payment was sent while evading law enforcement tracking. Re-use of destination addresses on the blockchain may compromise user’s anonymity, allowing law enforcement to connect related transactions. With non-privacy coins, such as Bitcoin, a common practice to avoid this is to generate new addresses with every received transaction. However, these addresses must be published or sent to the sender in some way, creating privacy concerns. Further, preventing re-use relies on the behavior of the sender of the receiver - nothing prevents a sender from using the same address twice. This is error-prone and may create privacy leaks exploited by law enforcement. Stealth addresses have become widespread in funding illegal behavior and for laundering money. Used mainly as part of privacy coins protocols (see Page 10), they enable bad actors to hide their real addresses from investigative parties. 2 1 Tracking activity on the blockchain and following the illicit money trail to an exchange 3 Keeping up with financial investigations in the crypto age 8