I had a look at this article : An incomplete guide to stealth addresses
It explains that Ethereum is currently a public blockchain : “anything that goes onto a public blockchain is public” and that “discussions on improving privacy” should occur.
Before discussing this issue, here are a few reminders :
- most governments prefer control over freedom, and rush to regulate, whether they are autocratic or democratic
- most people are broke and face a lot of difficulties. When they are asked to vote, they usually vote for a bigger government, likely to protect them : as a result, democracies are more and more regulated
- most government don’t like decentralization and regulate heavily everything decentralized (the internet as a whole, social networks, P2P, cryptocurrencies, …)
- the trend to regulate crypto is so strong that there is a weekly update about “regulation” on https://weekinethereumnews.com/
- regulators like to sue everything that offers too much privacy, for example Tornado Cash
Such a situation is likely to change a little bit only in several years, perhaps 10 to 20 years, when major economies become so broke and dysfunctional (inflation, strikes, shortages …), that most people understand the benefits of liberty and innovation to increase wealth.
With this in mind, the current level of privacy is good :
- there is a pseudonomity, offering an already good level of privacy
- the fact that every transaction is public on Etherum may sometimes be unpleasant, but this is an important security for every user, because they have an opportunity to prove to regulators everything they have done on Ethereum (including tax administration and courts) : there is no “hidden transaction” or “stealth transaction” currently
- when blockchains introduce stealth options, they become easy preys for regulators, with usual accusations of financing fraud, money laundering, terrorism, … : “Without proper regulation, virtual assets also risk becoming a safe haven for the financial transactions of criminals and terrorists. The FATF has been closely monitoring developments in the cryptosphere and has issued global, binding standards to prevent the misuse of virtual assets for money laundering and terrorist financing.”
If stealth options were implemented on Ethereum mainchain, you can expect all the Ethereum environment (including developers), to be surrounded by aggressive lawsuits from various regulators.
It would be a massive loss of value and wealth for every Ethereum owner.
Privacy is typically an issue that could be enhanced by external actors (some L2 rollups for example).
It’s better for L1 Ethereum to stay public the way it is, like an accounting book recording carefully every transaction.