The CEO and co-founder of the USA-based cryptocurrency exchange Coinbase has stated his belief that a “privacy coin” is likely to go mainstream this year. He personally published a post on Coinbase’s official blog on the 3rd of January, in which he stated his belief that the integration of privacy features into a major blockchain will happen in the 2020s, and it could even happen as soon as this year. He predicts that a major cryptocurrency with these features could very quickly go mainstream.
He uses the analogy of HTTP on the internet. When the world-wide-web launched, it had only HTTP protocols to go by, but HTTPS was later introduced by privacy-oriented tech innovators. This highly secure, encrypted protocol has become the norm for most serious websites. He envisions a similar process happening with cryptocurrencies, wherein a “privacy coin” (a blockchain with built-in privacy features) will be adopted by the mainstream in the very near future.
The recent crackdown on so-called “anoncoins”
One thing that makes these predictions particularly interesting is the fact that there has been a recent crackdown on privacy-oriented cryptocurrencies. A number of exchanges and influential bodies have instructed the market to move away from privacy coins in recent months, and there are signs of an appetite to move away from them. Meanwhile, there is a growing consensus that the primary focus on Bitcoin development should be privacy, which puts the future of smaller, existing anoncoins at risk.
Back in March 2019, the head of the French National Assembly’s Finance Committee put forward a proposal for a ban on anoncoins. Soon after, in May, a Japanese exchange called Coincheck removed four privacy coins from its list, and the Virtual Currency Exchange Association in Japan made the formal recommendation that its members follow suit. With all this in mind, it is rather surprising that a prominent figure in the cryptocurrency world would make a prediction that we will soon see mainstream adoption of a privacy-focused cryptocurrency.
Prominent cryptos working on privacy
There is reason to argue that the wheels have already started turning on the integration of privacy features into the leading blockchains. It was reported back in June 2019 that there is a growing fear in the industry that the increasing anonymity of Bitcoin could place anoncoins in jeopardy.
Take, for instance, the fact that prominent blockchain technology company Blockstream published its test code for the use of Schnorr signatures in the Bitcoin blockchain. This would boost the privacy of the network, as well as significantly increase its scalability. The discussions about the potential implementation of this code are still ongoing, with little known of the progress of those conversations.
Meanwhile, as far back as September 2017, Ethereum’s blockchain incorporated support for Zero-Knowledge Proofs, which is a certain cryptography medium that enables data to be validated without accessing it. Fast-forward to October 2018, and international auditing and consulting company Ernst & Young released a statement saying the prototype launch of Zero-Knowledge Proofs into the Ethereum blockchain had been completed.
Privacy in the world of cryptocurrencies is a hotly-debated topic. The primary bone of contention is that some feel that privacy is an essential component for security and peace of mind. This has been a driving principle of the digital world, as a growing number of ways to access the internet has led to a wide scope of privacy concerns. On the other hand, there are those who believe it would be most useful to criminals, opening the door for thieves and fraudsters to operate without being caught.
This is a debate that is ongoing, and it is not surprising that certain mainstream bodies are advising against privacy coins, given the fact that cryptocurrencies are a concern for conventional finance institutions at the best of times.
Another key prediction
In addition to the prediction about privacy coins, the Coinbase CEO has asserted his belief that the wealth of the future will come from the cryptocurrency space. Estimations of Bitcoin reaching a value of $200,000 per coin would suggest that as many as half of the world’s billionaires through the 2020s will have accumulated their wealth through cryptocurrency. He believes this will result in a vast increase in the amount of money invested in technology and science, and a growing number of people from the surging cryptocurrency industry will turn their attention to philanthropic ventures.
This prediction is very much in line with a recent report published by Coinshares, a digital asset management company. This report put forth the prediction that Millennials with a strong awareness of Bitcoin are set to inherit value from the Baby Boomer generation to the sum of almost $70 trillion by 2045. This would be a remarkable reshaping of the way the world’s wealth is distributed, and such predictions appear to be gaining momentum.