According to the latest assessment from Ali Yahya, General Partner of a16z crypto – a leading global Venture Capital in the blockchain sector – privacy is gradually becoming the strongest competitive "fortress" in the cryptocurrency market in the next phase. He argues that although blockchain has made significant strides in scalability, transaction speed, and interoperability between chain, privacy is being largely neglected or XEM by most platforms.
Ali Yahya emphasized that privacy is not just an added feature, but a core function capable of driving the entire global financial system's migration to the blockchain. In reality, transferring Token between different blockchains today has become relatively simple thanks to cross-chain bridges and interoperability protocols. However, “moving privacy” between chain is a completely different problem, far more complex and almost impossible to replicate seamlessly. This difficulty is what makes privacy-focused blockchains capable of forming extremely powerful network effects, where users, applications, and Capital flows tend to converge on a few leading platforms.
According to his analysis, once privacy is deeply integrated into blockchain infrastructure, leading projects will benefit from a "winner-takes-all" advantage. This not only creates a significant barrier to entry for new competitors but also allows privacy-focused blockchains to potentially dominate the crypto market in the long term. This is a kind of "moat" that cannot be easily matched by improvements in transaction speed or cost.
