The privacy track is the only remaining field with asymmetric profit potential.
Written by: Mert Mumtaz, CEO of Helius Labs
Translated by: Saoirse, Foresight News
At the birth of Bitcoin, it faced three core issues: first, legitimacy; second, programmability and scalability; and third, privacy protection.
Bitcoin addressed the legitimacy issue by growing into a trillion-dollar asset; public chains like Solana and Ethereum tackled the problems of programmability and scalability; while privacy protection, as the only remaining unsolved challenge (and thus a market gap with asymmetric profit potential), is being led to breakthroughs by blockchain projects like Zcash.
I refer to the privacy field as the "last thousandfold opportunity" or the "last PvE (player vs environment) track," not merely as an eye-catching gimmick (though this statement does have viral potential), but based on a comprehensive judgment of the increasingly apparent asymmetric opportunities, gaps in the market, and the macro-level maturity of the timing. This field includes not only zero-knowledge proof (ZK) technology but also encompasses mixers, fully homomorphic encryption (FHE), and secure multi-party computation (MPC) among other technological directions.
Overview of the Development of the Crypto Industry
Bitcoin originated from the cypherpunk movement, aiming to create an internet-native currency as a direct response to the 2008 financial crisis.
In its early days, Bitcoin was characterized by innovation, anarchistic attributes, and uncertainty—no one could be sure of its success, making "the struggle for legitimacy" the core goal at that time.
As its popularity grew, Bitcoin gradually faced two major criticisms: first, a lack of programmability (which later extended to "lack of scalability"), and second, a lack of privacy protection capabilities.
Ethereum emerged to address the issue of "missing programmability"; subsequently, Solana was launched to further tackle the problem of "insufficient scalability in programmable scenarios."
Over the past 5-8 years, the main narrative of the crypto industry's development has been as described above: Bitcoin continues to solidify its legitimacy, while public chains like Ethereum and Solana advance programmability and scalability.
In the future, the programmability/scalability track and the Bitcoin ecosystem will continue to optimize, but it will be difficult to see another "thousandfold" breakthrough— in other words, improvements in these areas will be more about "marginal optimization" rather than "quantum leaps."
On the other hand, the birth of Zcash was precisely to address another core controversy in the crypto space— the lack of privacy. If we view the technological development of human civilization as a "technology tree," Zcash's goal is to promote the evolution of the "privacy branch."
Criticism of the "lack of privacy" has long been widely recognized in public forums by industry pioneers such as Satoshi Nakamoto and Hal Finney (an early core contributor to Bitcoin, who became the first person in the world to receive a Bitcoin transaction on January 12, 2009, and was an important technical collaborator of Satoshi Nakamoto, discussing Bitcoin's privacy flaws multiple times on public forums like Bitcointalk). In fact, Satoshi Nakamoto referenced Zooko's (Zooko Wilcox-O'Hearn, a key scholar in zero-knowledge proof and privacy encryption, and one of the early core contributors to the Zcash project) views in his first Bitcoin-related post.
In the early development of cryptocurrencies, the core problem that needed to be solved was the "double-spending problem" (i.e., the same amount of money being spent more than once). To prevent double spending, it was necessary to ensure that "all participants can see the account balances of others"— this is also the fundamental reason why blockchain is inherently "transparent and traceable" today, essentially a compromise made to solve the double-spending problem.
In fact, Satoshi Nakamoto publicly stated that he was "willing to add ZK technology to Bitcoin to enhance privacy," believing it would make Bitcoin "much better," but at that time, due to technological maturity constraints, it was impossible to solve the double-spending problem while incorporating ZK— zero-knowledge proof was still too novel a technology.
The Present and Future of the Privacy Track
The novelty of zero-knowledge proof technology is reflected in the fact that the Zcash team was the first in the world to put ZK technology into a production environment— not just in the crypto industry, but across all industries.
However, early ZK technology had significant flaws: it was extremely difficult to develop, had poor usability, and required multiple iterations to perfect while eliminating "trust assumptions" (i.e., not relying on specific third parties). Therefore, both the Zcash project itself and the overall zero-knowledge proof technology experienced long-term developmental challenges.
Now, the situation has fundamentally changed: ZK technology has finally matured and can be stably applied; at the same time, the "programmability/scalability" track has gradually reached the upper limit of the "technology S curve" (i.e., the growth rate begins to slow down, and marginal returns diminish).
The current landscape of the crypto industry is clear: Bitcoin has established a foundation of legitimacy, Solana and Ethereum have validated the product-market fit (PMF) of programmability, while the privacy track has become the only remaining field with asymmetric profit potential.
More importantly, now is the "golden opportunity" for the privacy track to explode: in recent years, although the crypto industry has often been dominated by speculative attributes and commercial interests, its origin is the cypherpunk movement— the core goal of cypherpunks is to build "systems that guarantee freedom and privacy" using cryptography and code. Today, the industry is gradually returning to this core original intention.
When combined with the macro environment: concerns about a global debt crisis persist, Bitcoin has proven the feasibility of "non-state-issued currency"; at the same time, incidents of power abuse and privacy violations are frequent globally (with Europe as a representative); furthermore, as traditional financial institutions accelerate their "on-chain" efforts, their demand for transaction privacy will significantly increase— a combination of multiple factors indicates that privacy technology and zero-knowledge proof technology are approaching a "tipping point" for "consuming the world."
The privacy track also has a key advantage: it is one of the few fields that is "difficult enough, impactful enough, and innovative enough" to attract top talent from the artificial intelligence (AI) sector— and the gathering of talent will further drive capital inflow, forming a positive cycle of "talent-capital" mutual promotion.
In summary, a "planet-scale, unstoppable private currency era" is just around the corner.
Note: I do not believe that projects like Bitcoin, Solana, and Ethereum have no room for growth— they will clearly develop to a larger scale in the future. However, given their current size, achieving "hundredfold growth" is basically impossible.
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