Privacy Is Key to the Next Phase of Ethereum
0As Ethereum celebrates its 10th anniversary this month, it must double-down on its original commitment to privacy, say Zac Williamson, Co-founder and CEO of Aztec Labs, and Sam Richards, Lead of PSE at Ethereum Foundation.
Ethereum introduced smart contracts to the world and spurred a Cambrian Explosion of innovation, including DeFi, NFTs, DAOs, and a universe of dApps. On July 30, the network will hit its 10 year anniversary.
The past decade of the ecosystem focused on proving Ethereum’s functionality and capabilities as well as enhancing efficiency through upgrades like The Merge, which marked the transition from Proof-of-Work to Proof-of-Stake. The next era requires a pivot to match the more mature ecosystem that it now supports — one that includes not just Web3 natives but financial institutions, governments, corporations, and people who don't know what "yield farming" is but who may want to get a loan for their house with crypto collateral.
Amid increasing government and institutional involvement, the hope that crypto will contribute to creating a "free and open society," an ideal originally expressed in A Cypherpunk's Manifesto, is sometimes lost. For Ethereum to make good on that original promise, privacy must be a core tenet of its future.
Some degree of privacy is essential for financial safety and freedom. You wouldn't want to reveal your net worth to the cashier every time you buy a latte or a slice of pizza, but this is essentially how crypto has been operating for the past decade — with the radical transparency of immutable ledgers recording every transaction publicly.
Not only does this level of transparency put individuals at risk for phishing and other attacks, but it also hinders the involvement of institutions that do not want to give their competitors an edge by revealing their activity. Though it is possible to retain pseudonymity through never interacting with a centralized platform, this is not practical for interactions that touch the real world.
People and businesses need to be able to interact with governments and banks through ID-linked accounts, and the key to enabling these types of interactions — without putting personal information in jeopardy to theft and misuse — is programmable privacy.
The solution is already here: Zero Knowledge Proof (ZKP)-powered smart contracts give users control over what information to share and with whom. With the programmable privacy enabled by ZKPs integrated into Ethereum at a foundational level, a world of applications are not just feasible but practical.
Products and services must comply with the regulatory requirements of each jurisdiction in which they operate. This includes collecting customer information in accordance with KYC guidelines, Countering-the-Financing-of-Terrorism (CFT) and AML laws. Typical KYC processes involve sharing some form of ID, such as a passport or driver's license, along with personally identifying information (PII) like name, date of birth and address.
If captured by bad actors, this type of information can be used to target people in phishing scams and other types of attacks (see recent Coinbase data breach). Rather than requiring people to reveal their PII and make themselves and their data vulnerable to attack and theft, ZKP-powered solutions allow people to prove they are not operating out of sanctioned countries and to prove eligibility to participate, all without giving the platform...
https://www.coindesk.com/opinion/2025/07/22/privacy-is-key-to-the-next-phase-of-ethereum
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