According to Changpeng Zhao, co-founder of cryptocurrency exchange Binance, the lack of privacy in onchain transactions is one of the biggest obstacles to the mass adoption of cryptocurrencies as a payment and medium of exchange.
The executive, commonly known as “CZ,” said the lack of privacy prevents companies and institutions from paying expenses in cryptocurrencies. He gave this example:
“Lack of privacy could be the missing link in the adoption of cryptocurrency payments. Imagine a company paying employees in onchain crypto. With the current state of cryptocurrencies, you can basically see how much everyone in the company is paying by clicking on the ‘from’ address.”
In a previous conversation with investor and All-In Podcast host Chamath Palihapitiya CZ, she also cited physical security concerns as a reason why onchain transparency poses a risk to users. The comments follow the resurgence of privacy and the cypherpunk ethos in cryptography.
The cypherpunk ideology is central to the birth of cryptocurrencies, peer-to-peer digital money that can be transferred without centralized intermediaries, and the encryption of online communications to protect messages from surveillance.
Related: There will be no CBDCs, ‘no privacy’, warns billionaire Ray Dalio
Encrypt everything: increasing online privacy
Companies and institutions will not choose cryptocurrencies, Web3 or blockchain platforms if they cannot protect their transactions, Avidan Abitbol, ​​former business development specialist at cryptocurrency project Kaspa, told Cointelegraph.
Transactional data contains critical information about a company’s workflows, trade secrets and business relationships and can provide competitors with clues about a company’s overall financial health, he said.
These problems can lead to corporate theft, negatively impact corporations during business negotiations and escalate the risk of the institution becoming a target for fraudsters, Abitbol added.
According to Eran Barak, former CEO of privacy firm Shielded Technologies, the continuing technological development of artificial intelligence systems will exacerbate this problem.
Centralized servers containing critical or valuable information will become increasingly attractive to AI-powered hackers, Cointelegraph said.
This means onchain privacy technologies will become crucial to protecting valuable information online as artificial intelligence becomes more powerful and can gather heuristic clues about a potential target and statistically model likely outcomes, he said.
Warehouse: 2026 is the year of pragmatic privacy in cryptocurrencies: Canton, Zcash and more
