By Alex Shipp
With initiatives for radical transparency and grassroots privacy advancing in lockstep, the next wave of technical innovation is just beginning to ripple through the blockchain space. Tensions have been flaring between digital surveillance agendas and privacy advocates for decades; the former argue that government surveillance keeps bad actors in check, while the latter argues surveillance operations represent extreme and unwarranted encroachments on individual liberties. But who is to say low-friction interoperability solutions built on blockchain can’t bring the two worlds into balance?
Across the crypto landscape, 2021 was a blockbuster year for privacy. Monero completed support for atomic swaps, and a band of new privacy-focused applications and blockchain ecosystems showed up on the scene. From private communication networks to private DeFi and privately held NFTs, rising and experienced developer teams alike are now taking on the responsibility to protect user privacy — or at least to give users the opportunity to protect their own.
Beyond crypto, the headlines were even larger. The world’s largest corporations jumped into the fray, with Apple launching a global, pro-privacy ad campaign and Google announcing the arrival of privacy labels for Android users in 2022. As much an oxymoron as it is a truism, 2021 was the year privacy went mainstream.
Meanwhile, governments had other ideas. For regulatory bodies, tax enforcement agencies, and public health committees, 2021 was a year of oversight and surveillance — and big tech has been more than happy to offer their services. Between FinCEN, the SEC, and even the House Agriculture Committee, governments began targeting crypto platforms with various oversight proposals, meanwhile becoming high-profile clientele for blockchain data analytics companies like Chainalysis and Nansen.
Here’s the bottom line: as much as contact tracing, vaccine passports, and social media data aggregators are here to stay, so too are their privacy-protecting counterparts. The question is how these two ostensibly opposing domains - public and private, visible and invisible, verifiable and anonymous - are to share space and interact in the digital realm.
What’s clear at this point is that big government, big tech, and predictive analytics aren’t going anywhere in 2022, and neither are the legions of tech-savvy libertarians committed to protecting user privacy at all costs. To that end, both are moving forward at breakneck speed – the former via the Biden administration’s proposal to monitor all bank accounts with $600 in annual deposits, and Meta’s announcement to launch its own venture into the metaverse, and the latter with the emergence of private decentralized finance (PriFi) as a growing sub-sector.
Contrary to the disdain their advocates hold for one another, the public and private need not live in conflict; after all, there exists a vast expanse of digital real estate to accommodate both. As public and private ecosystems continue developing and evolving alongside one another, individuals are already beginning to occupy both sides in their personal lives. There is no outright winner to be declared; both public and private environments confer unique benefits and serve users in different scenarios. While public ecosystems provide an ideal space for social media experience and community building, private ecosystems are better designed to handle the exchange of sensitive information and identity documentation, support anonymous communication, and prevent wealth confiscation. Whether in the physical world or emergent metaverse, individuals, communities, and business ventures will always have promotional information they wish to share as far and wide as possible, and sensitive information they wish to withhold and protect.
As pioneers building the next iterations of finance, exchange, and the web as we know it, developers in the blockchain space are only just now beginning to take measures to make space for both public and private use cases in decentralized ecosystems. At present, most privacy-centric applications remain isolated on standalone blockchains that offer privacy as a singular value proposition.
Above the polarizing tension and opposing viewpoints, there exists an opportunity for tolerance and coexistence — if not symbiosis. The stage has been set for blockchain developers to build low-friction interoperability solutions that connect the two domains that compose and define the virtual world — the yin and the yang, the light and the dark, the seen and the unseen.
The future will be both public and private. High-efficiency, seamless bridging of the public and private domains is a challenging task, but it is one whose benefits will be reaped by each individual, each organization, and each nation in the world that has something to share and something to protect.
Alex Shipp is a strategist, writer, and thought leader in the digital asset space with a background in traditional finance and economics, as well as the emerging fields of decentralized finance, tokenomics, blockchain, and digital assets. Alex has been professionally involved with cryptocurrency since 2018, and currently serves as Chief Strategy Officer at Offshift, where he contributes to platform tokenomics, produces content, and conducts business development on behalf of the project. As an expert in private decentralized finance (PriFi), he has presented at major industry events including ETHCC and Dystopia Labs’ Playful Summit.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.