After scalability, privacy is the next big thing in the blockchain space
Public blockchains provide decentralization and transparency, but they lack on the privacy side. The anonymity of transactions on blockchains like Bitcoin (BTC) and Ethereum (ETH) is steadily losing ground, as transactions and addresses are easily tracked. With KYC imposed on most crypto exchanges, the majority of blockchain transactions can be traced to their initiators, exposing user activity, holdings, and financial data.
Even decentralized finance (DeFi) interactions can be easily monitored by advanced on-chain analysis systems. This is why privacy is just as important as speed and scalability for crypto to reach mainstream acceptance. Average consumers expect at least bank account level privacy to freely transact and RAILGUN is a ZK (Zero-Knowledge) based solution for existing blockchains that provides such wallet-level privacy.
The utility of digital assets comes with major downsides amid a lack of privacy. What happens when a crypto user pays for a coffee in crypto? They risk revealing their holdings, income and shopping preferences to merchants, peers and anyone who wants to extract value from their data. And taking it a step further, how many people would be comfortable receiving their salaries in crypto if it meant broadcasting all their financial information to the world? The necessity for increased privacy in the crypto space is essential to mainstream adoption.
Privacy is an important goal for public blockchains, especially Ethereum, which accounts for about two-thirds of all DeFi activity. The need for privacy on Ethereum has increased after the adoption of the widespread adoption of layer-2 solutions like Arbitrum.
In January 2023, Ethereum co-founder Vitalik Buterin admitted the need for improved privacy on
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