Can Ethereum Be Truly Private? Developers Push for Encrypted Mempool and Privacy by Default

Can Ethereum Really Provide Privacy? Developers Push for Mempool Encryption and Privacy by Default

Ethereum developers have begun to propose a number of concepts that could make the Ethereum network inherently closed.

Author: Margot Nijkerk, Sam Kessler | Edited by Sam Kessler Updated April 12, 2025, 12:39 pm Published April 11, 2025, 3:55 pm

Key points:

• In 2022, when the US government imposed sanctions on the crypto mixing service Tornado Cash, it sparked a heated debate in the crypto community.
• President Donald Trump lifted those sanctions in March, reigniting the conversation about privacy: Why should users rely on third-party apps to keep their transactions anonymous?
• Cryptosecurity researcher Pascal Caversacchio presented his ideas for adding privacy elements to blockchain on his blog on Wednesday.
• In response, Ethereum creator Vitalik Buterin published his own ideas on Friday.

When the US government sanctioned Ethereum-based cryptocurrency service Tornado Cash in 2022, it sparked a debate in the crypto community that continues three years later.

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Tornado allowed users to transfer cryptocurrency anonymously. The government claimed that the service facilitated money laundering, prompting some Ethereum validators and block creators to take steps to avoid participating in Tornado-related transactions, making the service slower and more expensive to use.

Supporters argued that enforcing sanctions was a form of censorship that undermined the cypherpunks’ core tenet. President Donald Trump backed the cypherpunks and lifted the sanctions on Tornado Cash in March of this year, but for some Ethereum developers, the situation exposed a flaw in the network that remains relevant today: Why should users depend on third-party apps for private transactions?

“Public transaction charts allow anyone to track the movement of funds between accounts, and balances are visible to all network participants, undermining financial privacy,” crypto security researcher Pascal Caversacchio explained in a blog post on Wednesday. “While the transparency of the Ethereum network fosters mistrust, it also opens up the possibility of potential surveillance, targeting, and exploitation.”

Perhaps inspired by the recent events surrounding Tornado Cash, Ethereum developers and researchers have once again begun discussing concepts for making the Ethereum network more private in nature.

“Privacy shouldn’t be an optional feature that users have to consciously enable — it should be the default state of the network,” said Caversacchio, whose post outlined his vision for a privacy-focused Ethereum roadmap. “The architecture of Ethereum should be designed to ensure that users are private by default, not as an exception.”

Caversacchio’s post mentioned several potential interventions — some new, some old — that he believes could make Ethereum more private for end users. One idea is to encrypt Ethereum’s public mempool — the place where transactions are sent before they are permanently recorded. Another idea involves using zero-knowledge cryptography, new transaction formats, and other methods to improve the privacy of Ethereum transactions.

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