Anyone with an internet connection can open a block explorer, paste in an Ethereum address and see how much it has sent, to whom and on what date. That complete transparency, initially presented as one of the network’s technical strengths, has become the main obstacle to many everyday use cases. The Ethereum Foundation has responded with the Privacy Cluster, a team of 47 professionals tasked with building privacy into the network itself rather than leaving it as an extra feature that each user has to configure.
What you can and cannot see in an Ethereum transaction today
Every transaction recorded on the network includes five pieces of information: the sender address, the recipient address, the amount transferred, the exact date and a cryptographic signature validating the transaction. All of this is public. Anyone can open Etherscan, enter an address and view the complete transaction history associated with it.
What does not appear is the real name of the person who owns that address. The address acts as an alphanumeric pseudonym. The problem is that this pseudonym leaves a permanent trail: every purchase through a service with identity verification, every withdrawal and every interaction with a decentralised application adds another clue. Over time, combining enough data can make it possible to link a specific address to a specific person. The privacy Ethereum provides by default is not real privacy, but rather pseudonymity with an expiry date.
The Privacy Cluster: what it is and who is involved
On 8 October 2025, the Ethereum Foundation officially announced the creation of the Privacy Cluster in a post titled “Our Commitment to Privacy”. The team brings together 47 researchers, engineers and cryptographers coordinated by Igor Barinov, founder of Blockscout and xDai.
The Privacy Cluster does not work in isolation. It coordinates with Privacy Stewards of Ethereum (PSE), the initiative launched in September 2025 after the team previously known as Privacy & Scaling Explorations was renamed. It also works with the Institutional Privacy Task Force, which is responsible for aligning technical developments with regulatory requirements in different countries. The overall goal is clear: to make privacy a native property of Ethereum, rather than an add-on that depends on third-party applications.
Zero-knowledge proofs: the mathematical foundation behind it all
A zero-knowledge proof is a cryptographic method that makes it possible to prove that a statement is true without revealing the information behind it. A useful everyday example: imagine you need to prove in a shop that you are old enough to buy something. Today, you show your ID and the person serving you can see your name, address, photo and full date of birth. With a zero-knowledge proof, the system confirms just one thing: whether or not you are over 18. None of the other information is revealed.
Applied to Ethereum, the mechanism makes it possible to prove that a transaction is valid (that the person signing it has the funds and that the transaction follows the network’s rules) while keeping the sender’s identity, the amount transferred and the recipient hidden. The network accepts the transaction because the mathematical proof is valid, without needing access to the underlying data.
Three areas already being worked on
The first is private transfers of ETH and ERC-20 tokens. Tom Lehman, co-founder of the Layer 2 network Facet, proposed EIP-8182 for inclusion in the Ethereum Hegota upgrade. The proposal defines a system for private transfers using a shielded pool contract for ETH and compatible ERC-20 tokens. The design allows private transfers to any existing Ethereum address or ENS name, without requiring a privacy-specific address format. The proposal is still under public discussion among Ethereum core developers.
The second area is private queries. When a wallet asks a node for the balance of an address, that node can see both the request and the response, allowing it to infer which accounts the user is interested in or which IP address the request came from. The team is working on privacy-preserving RPC services after finding that standard RPC calls can leak personal information such as an IP address or the accounts a user is interested in.
The third area is Kohaku. It is a privacy-focused wallet and SDK designed to give users greater control over their transaction data. The idea is to allow other wallets and applications to integrate these capabilities without having to build the entire cryptographic infrastructure from scratch.
What it means for privacy to be built in rather than added on
Today, an Ethereum user who wants privacy has to rely on specific external tools. They can be technically demanding to use, liquidity is fragmented across different applications and some of these tools have attracted regulatory scrutiny because of their links to money laundering. As a result, privacy remains, in practice, a niche area mainly used by advanced users.
Building it into the network changes that logic. If protection comes directly from the protocol, the average user does not need to configure anything special or download additional applications: privacy can be enabled when they send a transaction from their usual wallet. This raises an open question that the Ethereum Foundation itself acknowledges: how to reconcile that privacy with the need to audit transactions when required by law. This is where concepts such as selective disclosure come in, allowing users themselves to decide what information to reveal, to whom and at a specific moment, without making that information available to everyone.
Ethereum was built around a model of radical transparency, and that model underpinned much of its technical credibility during its early years. When the network was still an experiment followed by only a few thousand developers, complete traceability was not a problem. Now that it is beginning to operate as infrastructure for payments, digital identity, governance and financial applications used by millions of people, the complete lack of privacy has become a practical limitation.
The Privacy Cluster marks the first time this shift has been addressed in a structured way, with a dedicated team, its own budget and a public roadmap. It is still too early to know which proposals will eventually be activated and which will be discarded along the way, but the direction of the work is already clear.