Hungarian researchers believe that transactions in the Ethereum blockchain are less confidential than in Bitcoin. The reason for this is the Ethereum domain name system (ENS).

The study was conducted by three Hungarian educational institutions: The Institute of computer science and control (SZTAKI), the University of Lorand etwes and the University of St. Stephen, as well as the canadian firm HashCloack under the leadership of developer Ferenc Béres. The researchers analyzed the features of Ethereum that will make it easier to keep track of transactions in this network compared to Bitcoin. The account-based Ethereum model is more open due to the reuse of addresses.

The peculiarity of Ethereum is the Ethereum domain name System (ENS), which binds addresses to ".eth" domains, which are easy to read. The researchers were able to detect such 890 domains hosted on the public profiles on Twitter. This may already be enough to reveal whether the owners of these addresses committed compromising actions. For example, about 10% of these wallets were used on gambling platforms, and 5% were used to make payments on adult resources. According to Beresh, ENS has become a "starting point" for identifying users through linking signatures to time zones, as well as using gas prices and direct transfers between wallets. Such methods could be used to reveal up to 17% of transactions.

The researchers also found that 7.5% of users of the ETH Tornado Cash mixer received coins to the same wallet they started mixing with. This means that the efforts of these users who tried to mix transactions were useless. Analysts focused on the weaknesses of Ethereum, but some of the techniques can be applied to UTXO-based cryptocurrencies. However, in this case, deanonymizing transactions will be much more difficult.

Last year, scientists from Stanford University introduced a "fully decentralized and confidential payment mechanism" on the Ethereum network to encrypt account balances, deposits, transfers, and withdraw coins from wallets.