In fact, nobody cares that crypto is not that private

This op-ed is a response to an earlier comment about blockchain’s danger to users’ privacy.

The cryptocurrency ecosystem is currently experiencing a narrative mirage.

For years, those who follow the space have believed in, and at worst relied on, the illusion of crypto-anonymity. This illusion—that crypto provides an untraceable alternative to the traditional banking system—mostly finds its origin in news stories about the early Bitcoin criminal underworld.

Misconceptions perpetuated by the mainstream media about the fundamentals of blockchain technology have created misconceptions in the public mind about the level of privacy these cryptocurrencies provide by default.

For many, the idea that cryptocurrencies were built on fully auditable public ledgers remained a technical afterthought, rather than a tangible reality with practical implications for privacy and information security.

While people were vaguely aware that cryptocurrencies were not completely anonymous and that government agencies could monitor criminal transactions, a general belief in anonymity persisted despite the existence of a permanent, public record of all blockchain transactions, allowing anyone to analyze and link activities an identity.

The rise of public blockchain intelligence is beginning to shatter this narrative.

Every day, the use of services like ENS, which are often linked to real-name Twitter accounts, shows that crypto users eagerly and purposefully tie their identity to their cryptocurrency activity – and that the privacy paranoia lives mainly in the minds of a niche group of ideologues.

But this does not mean that the tools these ideologues create to chase hopes and dreams, such as Zcash or Monero, will cease to exist. Like other internet privacy tools, such as Tor, these tools can continue to exist in parallel with the rest of the clear web to accommodate an eccentric group of users with more esoteric use cases.

Becomes public

Blockchains are the richest collection of public financial databases ever, creating enormous value for blockchain analytics companies and their users – and privacy activists across the ecosystem fear the incentives and implications this could bring.

Read more from the other side of this privacy debate: Do you want privacy? Don’t use Blockchain yet

But despite the negative views promoted by these activists, crypto users continue to show – simply by which products they actual use — that this fear is misplaced. It seems people care more about utility and ease of use than privacy.

This mirrors what happened on the internet, where the shift from pseudonymous mailing lists to being okay with putting your public identity online spurred a new wave of highly usable platforms like Facebook.

Likewise, a new era of companies focused on crypto-identities and their activity has begun. This will also open up a market for new companies whose products and services lead to increased use.

Ultimately, our industry will grow healthier as a result of cryptocurrency economies consciously and willingly moving toward real identities and a ubiquitous use of tools that allow crypto activity to be easily seen and understood by others.

This path forward will destroy the fictitious public image of crypto as a shadowy world of anonymity, allowing participants to focus on other use cases for this transformative technology – alerting those who continue to have an interest in privacy to search for tools that actually serve their final goal.

Miguel Morel is a technology entrepreneur. He is the founder and CEO of Arkham Intelligence, a data analytics company that de-anonymizes the blockchain, backed by Bedrock Capital and the founders of Palantir and OpenAI.

Get today’s best crypto news and insights delivered to your email every night. Subscribe to Blockworks’ free newsletter now.

Want alpha sent straight to your inbox? Get degen trading ideas, management updates, token performance, unmissable tweets and more from Blockworks Research’s Daily Debrief.

Can’t you wait? Get our news in the fastest way. Join us on Telegram and follow us on Google News.