Changpeng Zhao (CZ), co‑founder of the global exchange Binance, warned that insufficient privacy on blockchain networks remains a major barrier to widespread adoption of crypto payments.
The same holds for the transparency of onchain transactions, the executive said, making it challenging for businesses and institutions to comfortably use cryptocurrencies as routine payment options for salaries, suppliers, and other expenses.
The idea behind Bitcoin and Ethereum is transparency. The transactions are recorded in a public ledger accessible to everyone, though wallet addresses can’t be directly linked to names; they are often traceable and can be connected to individuals or companies over time.
This openness, CZ argues, poses quite real concerns for companies. He cited a straightforward case: If a company pays its staff members in crypto directly onchain, anyone who visits the company’s wallet address might see how much each worker receives.
Salary data is considered private in traditional banking systems. That same information can be made public on public blockchains. CZ also expressed concern over personal safety, speaking earlier on with investor Chamath Palihapitiya, the host of the All-In Podcast.
If everyone can instantly “see” how much crypto a person has or gets, they could be a target for theft, scams, or even physical threats. For A-list personalities or corporate chieftains, this visibility can become a big issue.
These worries are all in lock step with a broader discussion in the crypto community. Cryptocurrency’s early proponents were inspired by “cypherpunk” thinkers, the movement that called for strong encryption and privacy to shield people from threats of surveillance and control.
Bitcoin was initially conceived as a peer-to-peer digital currency that could be transferred without the use of banks or other intermediaries. Privacy was not optional for many early adopters; it was a foundational principle.
Businesses fear losing trade secrets on public blockchains
Some industry professionals agree with CZ’s position. Avidan Abitbol, formerly a Business Development Specialist for the Kaspa cryptocurrency project, has argued that companies will hesitate to fully adopt crypto and Web3 systems if they cannot keep their transactions confidential.
He points out that transaction data can reveal more than just payment amounts. It may expose information about supply chains, partnerships, client relationships, and overall financial activity.
For example, if a competitor studies a company’s blockchain activity, they can estimate revenue trends, identify key business partners, or track major deals. This level of transparency can put companies at a disadvantage during negotiations. It could also increase the risk of corporate theft or targeted scams. If attackers can see large transfers or identify patterns in payments, they may use that information to plan phishing attacks or other types of fraud.
Growing AI threats make blockchain privacy more urgent
The rapid pace of artificial intelligence’s advancement is just the latest twist in the story of privacy. Eran Barak, the former CEO of privacy-focused technology company Shielded Technologies, previously said that AI systems will allow hackers to focus more on publicly available data, combining files and information as they go.
Centralized servers maintaining useful content are already attractive targets for cybercriminals, Barak said. As AI tools evolve over the years, they will be equipped to sift through multiple sources of information for clues, connect the dots, and predict likely outcomes. With publicly available, permanent blockchain data, AI can scan large volumes of transactions to identify high-value targets.
So, for instance, an AI system could observe wallet activity, identify repeat payments, and estimate how much crypto a company or individual controls. Eventually, that could lead to intricate financial profiles without direct access to private accounts. Barak claims that as AI capabilities grow, onchain privacy technologies will become the new normal and will be even more important than ever before.
The goal of these technologies is to hide transaction details while still allowing blockchains to verify that payments are valid. A subset of blockchain projects is already experimenting with privacy-improvement tools, such as zero-knowledge proofs and other cryptographic techniques.
Source: https://www.cryptopolitan.com/cz-says-lack-of-privacy-is-blocking-crypto/
