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Ethereum
Privacy of the Ethereum blockchain, the parent network of Ether, is a work in progress. Although experts are previously leveraging mixing, a technology that scrambles transactions together by introducing a set of fake transactions (called "Mix-ins") plus several real transactions sum to approximate the same number of units of ETH, zero-knowledge proofs is currently studied for Ethereum privacy. The motive of ZKPs is to make the number of funds transferred invisibly, and it allows for privacy by mathematically preventing certain information such as amount, sender, recipient, etc., invisible to the public while still guaranteeing correct transaction execution.
Vitalik Buterin on privacy
According to Vitalik Buterin, co-founder of ETH, about privacy;:
We can encourage the development of easy-to-use, and importantly decentralized (i.e., not just "trustless", completely serverless) mixers targeting privacy-preserving transfer of small amounts of ETH, so if you want to send gas payment to another account, you can do so without linking the two.
Note that one major challenge with privacy solutions such as. ringsig or zk snark based smart contract mixers is that if you want to send funds from A to B, B still needs to have ETH to pay gas to submit the proof to receiving their funds, and sending that gas would be a privacy leak; this can be solved with a layer-2 protocol where a user can broadcast their proof (including a commitment to what address they want to receive to and what fee they are willing to pay) over something like Whisper, and a specialized set of nodes could accept these proofs, include them into a transaction and pay for the gas, and collect the fee from the recipient. But this protocol needs to be specced out, standardized and implemented…
