A researcher from the Ethereum Foundation revealed that the IP address of the ether, Stakeholders are monitored as part of a broader set of metadata, leading the cryptocurrency community to flag Ethereum as a privacy issue.
In an April 12 interview with crypto podcast Bankless, EF researcher Justin Drake revealed that he learned of the information “inside” presumably at the Foundation. The metadata Drake mentioned is used to track a wide range of things, he explained:
“There’s a lot of metadata, you can look at deposit addresses, you can look at withdrawal addresses, you can look at fee recipients, you can look at IP addresses.” Drake's comments seemed to take Bankless host Ryan Sean Adams by surprise.
“So this is a fairly Sybil-resistant ethereum citizen dataset?” Adams asked. "Exactly," Drake responded.
The conversation started when Drake predicted that “special airdrops” might be offered to individual stakers not industry heavyweights: “Then you can be sure, okay, we know who Kraken is, we know who Coinbase is, and if the purpose of the airdrop is to go to a specific individual running a separate validator, we can’t airdrop them.”
One Twitter user referred to Ether as “the real surveillance coin,” while another poked fun at Drake by repeating him sarcastically: “We can stop censorship by censoring people we don’t like.”
Another described the situation as "central governance of T". To address privacy concerns, one Twitter user advised Ethereum users to take responsibility for their on-chain privacy by installing a Linux operating system, using a virtual private network (VPN), and storing crypto assets in hardware wallets such as Ledger: It's also not the first privacy-related announcement to make waves in the crypto community.
ConsenSys, the team behind the Ethereum wallet MetaMask, began collecting IP addresses in November. Policy revisions are made to ensure companies are able to comply with know-your-customer (KYC) and anti-money laundering (AML) policies where necessary.
