Expressing his view on how the cryptocurrency sector will fare during the 2020s, Coinbase CEO Brian Armstrong stated that a ‘privacy coin’ will reach mainstream adoption during the decade. Armstrong shared his stance on the official Coinbase blog on Jan. 3.
Furthermore, the CEO believes that several major blockchains will implement a plethora of privacy features. The question remains whether cryptocurrency users plan to adopt projects which are completely based on the idea of privacy, such as Monero (XMR), or whether they will stick with major blockchain networks who will, later on, adopt privacy features.
“Just like how the internet launched with HTTP, and only later introduced HTTPS as a default on many websites, I believe we’ll eventually see a “privacy coin” or blockchain with built in privacy features get mainstream adoption in the 2020s.”Brian Armstrong – Co-Founder and CEO at Coinbase
Future institutional ban on privacy-focused cryptocurrencies?
While there is a strong argument behind Armstrong’s prediction that privacy coins may soon reach the spotlight, there is a chance that governments and institutions restrict this type of digital asset. Institutional agencies such as the Securities and Exchange Commission may propose a ban on privacy coins under the guise of having no control over them.
Additionally, governments and banks openly state that they do not plan to allow the mainstream adoption of digital assets that can in no way be controlled. For example, the head of Russia’s central bank stated the following regarding the use of privacy coins:
“We are against private money. If some digital currencies were designed to become a substitute for private money, we could not support that.”Elvira Nabiullina – Head of the Central Bank of the Russian Federation
A similar view was expressed in March last year when the head of the Finance Committee of France’s National Assembly pushed for a complete ban on privacy-focused cryptocurrencies. Two months later, the sector saw a controversial decision by cryptocurrency exchange Coincheck, who decided to delist four privacy coins. The decision was made based on the recommendations made by the Japan Virtual Currency Exchange Association.
Several major projects started developing privacy features
Since its inception, Bitcoin is a pseudonymous cryptocurrency. Despite this fact, blockchain development firms such as Blockstream continually develop new solutions that would protect the privacy of Bitcoin users. In February 2019, the firm revealed that they finished testing Schnorr signatures which add both scalability and privacy to the network.
Ethereum’s team has done similar progress. In September 2017, devs announced that they added support for zero-knowledge proofs (ZK-Proofs), which allows blockchain data to be validated without being accessed.
Still, these features do not represent a complete overhaul to the project’s blockchain network, something that is needed for Bitcoin or Ethereum to reach the privacy level of Monero and other similar projects.