HE-DKSAP: Privacy-Preserving Stealth Address Protocol via Additively Homomorphic Encryption

Abstract: Blockchain transactions have gained widespread adoption across various industries, largely attributable to their unparalleled transparency and robust security features. Nevertheless, this technique introduces various privacy concerns, including pseudonymity, Sybil attacks, and potential susceptibilities to quantum computing, to name a few. In response to these challenges, innovative privacy-enhancing solutions like zero-knowledge proofs, homomorphic encryption, and stealth addresses (SA) have been developed. Among the various schemes, SA stands out as it prevents the association of a blockchain transaction's output with the recipient's public address, thereby ensuring transactional anonymity. However, the basic SA schemes have exhibited vulnerabilities to key leakage and quantum computing attacks. To address these shortcomings, we present a pioneering solution - Homomorphic Encryption-based Dual-Key Stealth Address Protocol (HE-DKSAP), which can be further extended to Fully HE-DKSAP (FHE-DKSAP). By leveraging the power of homomorphic encryption, HE-DKSAP introduces a novel approach to safeguarding transaction privacy and preventing potential quantum computing attacks. This paper delves into the core principles of HE-DKSAP, highlighting its capacity to enhance privacy, scalability, and security in programmable blockchains. Through a comprehensive exploration of its design architecture, security analysis, and practical implementations, this work establishes a privacy-preserving, practical, and efficient stealth address protocol via additively homomorphic encryption.