Privacy has been demonised by those in power, including politicians, regulators, banks, and academia, despite being a basic principle and source of pride of crypto initiatives.
On May 31, Zcash (ZEC), a privacy coin that debuted in 2016, announced an improvement to its system that would allow users to make private, trustless digital cash transfers on mobile phones more simply. This is not universally regarded as a positive development.
The unfamiliarity, ambiguity, and public fascination with privacy — including its complexity, abuse, and speculative activity — offers a variety of hurdles and reputational concerns for emerging crypto enterprises. While privacy is a major concept and source of pride for crypto projects like Zcash, it has been maligned by those in power, including legislators, regulators, banks, and academia.
Nonetheless, regular intrusions and data breaches demonstrate that protecting individuals’ privacy is more important than ever. Through the deployment of privacy-focused initiatives, crypto companies may engage the discourse and push for these critical consumer rights.
Buyer displeasure and corporate wrongdoing
When the shocking disclosures of the 2017 Equifax breach became public, sentiment toward the need for data and financial privacy reached the mainstream. Almost every American household’s most sensitive financial information was placed in the hands of third-party providers without their awareness or informed permission – and was not adequately protected.
Key message: Americans are increasingly dissatisfied with Big Tech, and public trust is at an all-time low. There is an opportunity to build a divide and capitalise on those sentiments, while also establishing a “privacy first” narrative that enables Americans to seek out protections on their own.
The message that projects must convey is threefold: 1) why people should want and need everything from their data to their text messages to be private; 2) how so many of our legitimate financial privacy rights — and thus our financial destinies — have been compromised and removed from our control; and 3) privacy is a constitutional right that the majority of Americans desire.
The negative perception of cryptocurrency
So first, we must confront the elephant in the room. The media, law enforcement, and numerous regulatory authorities have all been scrutinising the privacy debate, and we are losing the struggle to define our own business. Consider the following remark from US Senator Elizabeth Warren:
“DeFi is the most dangerous part of the crypto world. […] It’s where the scammers and the cheats and the swindlers mix among part-time investors and first-time crypto traders.”
The unifying thread in these attacks is that they portray crypto’s privacy strength — its breakthrough development as a virtually impregnable way of shielding its users’ identities and financial information — as an extreme negative. The suggestion is that privacy initiatives are intended to be used by drug dealers, suspect transactions, and to dodge law enforcement, regulators, and tax collectors.
Takeaway: If this characterization goes unanswered, privacy-focused crypto projects will not only allow their brand positioning to be hijacked, but will also expose themselves to additional scrutiny, negative coverage, investigations, and possible legal action — all of which could be detrimental to their value and longevity. There is no such thing as inaction.
