The Future of Privacy: Why Decentralized Systems are the Final Frontier for Freedom

For many decades, the Western world has always upheld individual freedoms: freedom of speech, freedom of assembly, and freedom of thought. These values are not just slogans but foundations, earned through history, conflict, and social struggle. However, that freedom is being lost silently today with the development of social networks, as these applications have the capacity to collect private messages, or the fact that the EU is pushing forward a legislative proposal which is the Chat Control Law. Blockchain and privacy-focused projects could be the solution for maintaining personal privacy today, where data is no longer controlled by third parties or publicly accessible.

Freedom is the Final Destination

Throughout human history, freedom has often been regarded as a central aspiration of human societies. Forms of social organization have never been static. They have moved along a clear trajectory, from absolute domination to conditional control and gradually toward democracy and individual freedom. Ancient empires were built on violence and fear. Monarchies relied on bloodlines and divine authority. Modern states emerged when people began to question the legitimacy of power, the right of individuals to self-determination, and the boundaries that the state must not cross.Democracy and freedom are the results of a social evolution that has taken centuries. Every step forward has been accompanied by struggle, resistance, and sacrifice. Therefore, when modern societies, especially those that once took pride in freedom, begin to return to comprehensive control and mass surveillance, this is not merely a policy shift: it is a reversal of evolutionary direction.

In the annual Freedom in the World report, Freedom House announced a global decline in freedom scores for the 19th consecutive year.

A system of total surveillance runs counter to this instinct. It asks people to accept that thoughts, conversations, and private interactions may be observed, analyzed, and judged. It demands that we place trust in AI algorithms, data-holding institutions, and those who control access to society's most sensitive information. The belief that they will do the right thing with that data is a dangerous assumption.

The core issue here is trust. When societies are asked to place absolute trust in a central authority, dependence itself becomes a vulnerability. It is often in such contexts that alternative systems begin to emerge. It is precisely in such contexts that new technologies like blockchain have emerged. Blockchain did not appear randomly or in isolation from history. It emerged after the 2008 global financial crisis, when trust in centralized financial institutions was deeply shaken. The banking system, which demanded unquestioned trust, exposed its limitations and failures. Most individuals had no meaningful ability to oversee it or hold it accountable.

“The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.” - Satoshi Nakamoto

Although blockchain is often associated with transparency, this does not mean that it rejects privacy. On the contrary, privacy-focused projects are receiving increasing attention and continued development.

Privacy in a decentralized world

Many people will remember the GameStop stock saga. Within a single week, a large number of amateur retail traders inflicted heavy losses on several hedge funds, causing billions of dollars in damage, by collectively buying shares of GameStop, a video game retailer. It began when a group of Reddit users discovered that several hedge funds were coordinating to short GameStop stock. Those who learned about it spread the information across the Reddit community, sparking a wave of buying intended to drive the price upward. The result was a several-fold increase in GameStop’s share price and massive losses for the hedge funds involved.

This episode is a clear illustration of how important privacy is, especially in a decentralized world built on blockchain technology. Not everything should operate in full public view. For example, messages do not need to be stored publicly on-chain. With the development of privacy-focused projects, messages can be stored anonymously on-chain without being controlled by any centralized server, unlike in the Web2 model.

Rather than being treated as an optional add-on, privacy should become a core layer of the Internet and of financial systems. This is especially critical in sectors such as finance and healthcare, where sensitive data must be tightly controlled in terms of who can access it and under what conditions. Imagine, for example, a financial institution using machine learning to generate trading signals and execute trades based on those predictions. If transaction patterns or execution behavior become visible to the market, the institution may unintentionally reveal its positioning. Once others infer the model’s behavior, they can trade against it or front run execution, quickly degrading performance and turning an effective strategy into a costly and potentially catastrophic loss. That’s why privacy is necessary.

Privacy coin projects

Monero

Monero is currently the largest privacy project by market capitalization, with an FDV of over $10 billion. It is one of the earliest privacy blockchains, launched in 2014. Unlike Bitcoin, where all transaction information is public, Monero transactions are confidential and untraceable.

The sender, receiver, and amount of every transaction are hidden through the use of three key technologies: Stealth Addresses, Ring Signatures, and Ring Confidential Transactions (i.e. RingCT).

• Stealth Addresses: They allow and require the sender to create random one-time addresses for each transaction on behalf of the recipient. The recipient can publish a single address, while all incoming payments are sent to unique addresses on the blockchain, which cannot be linked back to the published address or to other transaction addresses.

• Ring Signatures: In cryptography, a ring signature is a type of digital signature that can be created by any member of a group of users who each possess a key. When a user sends a transaction, their real signature is mixed with decoy signatures, ensuring that no one can identify the true sender, while the network can still verify that the transaction is valid.

• RingCT: A technology that completely hides the transferred and received amounts while still allowing the blockchain network to verify that the total input and output values are correct.

ZCash

Zcash is the second largest project by market capitalization in the privacy coin sector. Zcash uses a Proof of Work consensus mechanism similar to Bitcoin, but differs in its ability to anonymize transaction data through zk-SNARK technology, a cryptographic proof that allows a transaction to be verified as valid without revealing the sender, the receiver, or the amount. Unlike Monero, where all transactions are private by default, Zcash allows users to choose whether transactions are public or private.

While Bitcoin offers full transparency and Monero provides full anonymity, Zcash represents a combination of both. However, in the legal context, Zcash still faces disadvantages, as the European Union has planned to ban privacy focused cryptocurrencies such as Monero and Zcash in 2027. Not being fully anonymous like Monero may give Zcash a better chance of achieving legal acceptance in the future.

Starknet

Starknet is a Layer 2 scaling solution for Ethereum that uses Zero-Knowledge proof (specifically STARKs) to significantly improve throughput and reduce costs while inheriting Ethereum’s security. Instead of focusing primarily on scaling solutions as in 2021, Starknet is now focusing on privacy as execution capacity across the industry has improved dramatically while privacy at scale remains largely unresolved. At its core, Starknet leverages two key advantages of Zero Knowledge proofs to address both scalability and privacy:

• Concealment allows proving that something is true without revealing the underlying data.

• Compression makes it possible to summarize a massive execution into a short proof that anyone can verify at low cost.

Starknet is currently building a comprehensive privacy ecosystem with components across the entire stack, including core infrastructure, private payments, private trading, privacy pools & mixers, privacy neobank, and data-preserving protocol.

In addition, the Starknet team is also developing Ztarknet, a Starknet-based Layer 2 for Zcash that operates as an external computation layer described as the GPU of Zcash. Its goal is to enable the development of sophisticated applications such as user experience-rich DeFi protocols or full-stack applications while remaining aligned with Zcash’s privacy principles.

Zama

Zama is one of the new generation blockchain projects in the privacy sector today. The project has raised nearly $140 million and is expected to launch its mainnet by the end of 2025. The Zama Confidential Blockchain Protocol enables confidential smart contracts on top of any L1 or L2 using Fully Homomorphic Encryption (FHE). FHE is an end-to-end encryption technology developed by multiple cryptographers, including Pascal Paillier, co-founder of Zama. FHE enables data processing without decryption allowing companies to provide services without accessing user data while users experience unchanged functionality. With encryption maintained during both transit and processing, validators can process data without performing decryption thereby enhancing user security and privacy.

Zama has also developed fhEVM, a specialized version of the Ethereum Virtual Machine that supports private smart contracts. It allows developers to build data confidential applications in a straightforward way using the familiar Solidity programming language and can be integrated into any EVM compatible chain. Zama does not aim to build a closed blockchain, but instead positions itself as an infrastructure layer that can be integrated across multiple blockchains. If privacy gradually becomes a default standard, especially in the context of AI where personal and financial data are increasingly intertwined with blockchain systems, Zama is likely to emerge as a privacy service layer attached to existing blockchains. This is one of the reasons why Zama has been able to raise a relatively large amount of funding.

Zano

Zano is an open-source cryptocurrency (layer-1) and ecosystem with enterprise-grade privacy, security, and scalability that operates as a foundation for confidential assets and decentralized applications (dApps). Andrey Sabelnikov, the lead developer of Zano, is the person who created the first ever privacy coin protocol code base known as CryptoNote, which is used by Monero and hundreds of other projects.

Similar to Monero, Zano uses Stealth Addresses, Ring Signatures, and RingCT to maintain privacy. On Zano, everything is private by default, meaning people cannot see transaction amounts, the addresses involved, or the type of asset being transferred. This means that if performing a 51% attack on Zano, one would need the majority of the hash rate and a significant share of the total staked coins, making the cost of an attack incredibly high and rendering it infeasible. In addition, Zano incorporates the world’s first Proof of Stake mechanism, Zarcanum, which enhances traditional Proof of Stake with untraceability and hidden amounts.

One of Zano's unique features is the 'Confidential Layer Bridge', which allows users to bridge any asset to Zano. Consequently, a private "wrapped" version will be created, allowing the addition of a privacy layer to any asset. This bridge hides sender, receiver, and amount details, allowing public assets to gain high-level privacy, fast transfers, and low fees.

Conclusion

For more than a decade, blockchain has been discussed as a symbol of transparency. However, it may be time to reconsider and recognize that privacy is necessary. The demand for financial privacy continues to grow even as regulation tightens. Privacy coin transactions reached $250 billion in 2025, more than 70 exchanges have delisted privacy coins, and usage persists despite reduced access.

In crypto, information has direct monetary value. Anyone can easily scan on-chain data to see what you hold, how much you hold, your entire transaction history, who you transact with, and when you do it. If your activity is public by default, you are effectively giving away high signal financial metadata for free. Market participants are beginning to realize that they need privacy more than ever, as reflected in the recent surge in privacy coins. We should only make public what truly needs to be public, such as charitable donations. Even in an era where everything is being digitized and AI is developing rapidly, data does not have to be controlled by third parties, as privacy can still be preserved, and information is made public only when necessary.