The Case for Confidential Cryptocurrencies: Why I’m Walking Away from Public Chains

5 min read2 days ago

The advent of blockchain technology brought with it promises of decentralization, transparency, and empowerment. Yet, as the ecosystem has evolved, the cracks in the public blockchain model have become glaringly obvious. After years of investment, observation, and reflection, I have decided that I will never own another public blockchain project. My focus will instead be exclusively on privacy and confidential blockchain projects. Here’s why.

Transparency Without Privacy Is a Double-Edged Sword

Public blockchains like Bitcoin and Ethereum pride themselves on their transparency. Every transaction is recorded on a public ledger for anyone to see. While this transparency was heralded as a revolutionary feature, it has revealed itself to be a vulnerability.

Imagine walking around with your bank balance and every financial transaction you’ve ever made displayed on a billboard. This is effectively what public blockchains do. They expose individuals and businesses to surveillance, scrutiny, and even exploitation. Blockchain explorers make it trivial for anyone — competitors, regulators, or malicious actors — to track the flow of funds and analyze financial behavior.

This lack of privacy isn’t just a theoretical concern. There are documented cases of people being targeted for their cryptocurrency holdings, thanks to the visibility of transactions on public blockchains. Confidentiality is not just a personal preference; it is a necessity for security.

External Pressures Compromise Public Blockchains

External pressures, such as regulatory compliance demands, can push public blockchain projects to implement features that may prioritize transparency at the expense of user autonomy. These dynamics emphasize the importance of privacy-focused blockchains that are designed to resist such influences and maintain user control. By ensuring that individuals and businesses retain sovereignty over their data, privacy projects provide a more robust and ethical alternative to public blockchains increasingly shaped by external forces.

Privacy Is the Cornerstone of Freedom

Financial freedom is meaningless without privacy. If public blockchains become the norm, they could pave the way for a dystopian financial future. Governments and corporations could use the transparency of public ledgers to surveil and control individuals, stifling dissent and innovation.

Privacy-preserving blockchain technologies like Xelis, Monero, Zano, & Zcash, offer an antidote to this scenario. By prioritizing confidentiality in different formats and levels, they ensure that individuals retain control over their financial information. These projects recognize that privacy is not a tool for illicit activities but a fundamental human right.

Businesses Need Confidentiality

The issue of privacy is even more critical for businesses. Companies operating on public blockchains risk exposing sensitive information such as supply chain details, transaction volumes, and customer data. This exposure can lead to competitive disadvantages and breaches of confidentiality agreements.

Privacy-focused blockchains provide solutions tailored to the needs of enterprises. Confidential smart contracts, for example, allow businesses to leverage blockchain technology without sacrificing the privacy of their operations. This makes privacy projects not just preferable but essential for corporate adoption.

The Ethical Implications of Privacy

Choosing privacy-focused blockchain projects is not just a practical decision; it is an ethical one. In a world where personal data is treated as a commodity, advocating for privacy is a stand against exploitation. Public blockchains, with their radical transparency, often unwittingly enable data harvesting and mass surveillance. By contrast, privacy-oriented projects uphold the principle that individuals should have sovereignty over their own information.

Moreover, privacy technologies empower vulnerable populations who may be disproportionately impacted by the lack of confidentiality. Activists, journalists, and citizens in oppressive regimes rely on privacy to protect themselves from persecution. Supporting these technologies is a way to contribute to a more just and equitable society.

Governments and the Myth of “Nothing to Hide”

One of the most insidious narratives propagated by governments is that privacy is only for those with something to hide. This framing equates the desire for confidentiality with criminal intent, fraud, or other inappropriate behavior. By perpetuating this myth, authorities have successfully stigmatized privacy, making it seem unnecessary or even suspicious for ordinary citizens.

This “nothing to hide” argument is deeply flawed. Privacy is not about hiding wrongdoing; it is about protecting personal autonomy and dignity. In a world where data breaches, surveillance, and identity theft are rampant, the need for privacy is universal. People don’t lock their doors because they are hiding something; they do so to ensure safety and security. The same logic applies to digital privacy.

By framing privacy as a tool for criminals, governments shift the focus away from their own overreach and the erosion of individual rights. This narrative discourages people from questioning invasive policies and fosters complacency in the face of mass surveillance. Privacy-focused blockchain projects challenge this narrative, empowering individuals to reclaim their rights and reminding the world that privacy is a cornerstone of freedom, not a shield for wrongdoing.

The Road Ahead

The future of blockchain lies in privacy and confidentiality. Projects that prioritize these features are building the infrastructure for a more equitable and secure digital economy. Public blockchains, while an important stepping stone, have failed to address the fundamental need for privacy in an increasingly connected world.

As investors, we vote with our capital. By supporting privacy-focused projects, we send a clear message that transparency without confidentiality is not acceptable. The stakes are too high to settle for anything less.

In the end, privacy is about trust. It is about empowering individuals and businesses to operate freely, without fear of surveillance or exploitation. That is why I will never own another public blockchain project and will only consider investing in privacy and confidential blockchain solutions.

“This article represents my personal views and experiences in the world of cryptocurrency. It is intended to spark thought and discussion on the importance of privacy and freedom in digital finance. As always, I encourage readers to conduct their own research and form their own opinions. — Cyber Henry”

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