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Pantera Partner: Privacy Renaissance Era, These Technologies Are Changing the Game
Original Article Title: Privacy Renaissance: Blockchain's Next Era
Original Article Author: Paul Veradittakit, Partner at Pantera Capital
Original Article Translation: Saoirse, Foresight News
Since the birth of Bitcoin, the core concept of the blockchain industry has always been rooted in "transparency" — it is an open and tamper-proof ledger that anyone can view; its trust comes from "validation" rather than institutional reputation. It is this transparency that allows decentralized systems to function properly based on integrity and accountability mechanisms.
However, as blockchain technology matures and its use cases continue to expand, relying solely on "transparency" is no longer sufficient. A new reality is taking shape: privacy protection is a key driver for blockchain to move towards mainstream adoption, and the demand for privacy is accelerating at the cultural, institutional, and technological levels. At Pantera Capital, we have believed in this view from the very beginning — as early as 2015, we invested in Zcash, one of the first projects to introduce privacy protection to an immutable ledger.
We believe the industry is entering the "Privacy Renaissance" era: an era that will deeply integrate the concept of open blockchain with the practical needs of global finance. In this context, privacy protocols built on the core principle of "confidentiality," such as the upcoming Zama mainnet, have seen a development opportunity. Zama's Fully Homomorphic Encryption (FHE) technology is a "fortress" driving blockchain towards mainstream applications and is also capable of defending against threats posed by quantum computing in the coming years. Blockchain applications are just one deployment area of Zama's Fully Homomorphic Encryption technology, which can also be extended to other verticals such as artificial intelligence (like Zama's Concrete platform) and cloud computing.
Another notable investment target is StarkWare — the inventor of zk-STARKs zero-knowledge proof technology and the Validium solution, providing a "hybrid solution" for blockchain privacy protection and scalability. StarkWare's encryption technology also has post-quantum properties and focuses on blockchain application scenarios, especially with its latest introduction of the "S-Two Prover," further enhancing the technology's practicality.
Cultural Shift: From "Surveillance Fatigue" to "Digital Sovereignty"
Globally, there has been a fundamental shift in people's perception of data. Years of mass surveillance, algorithmic tracking, and data breaches have made "privacy" one of the core cultural issues of the past decade. Today, users are gradually realizing that not only information and transaction records but even metadata can reveal intimate details such as personal identity, wealth, location, and relationships.
「Privacy Protection + User Ownership of Sensitive Data」 has become the new industry norm — this is also the direction favored by Pantera Capital, for which we have invested in projects like Zama, StarkWare, Transcrypts, and World. As public awareness of privacy continues to rise, the blockchain industry must face a fact: digital currencies need "confidentiality" rather than "full traceability." In such an environment, privacy is no longer a niche demand but a critical part of driving the development of "digital sovereignty."
Institutional Shift: Transparency Without Privacy Cannot Support Scalable Applications
More and more institutions are entering the blockchain ecosystem: banks, remittance platforms, payment processors, enterprises, and fintech companies are all conducting pilots, preparing to handle real transaction volumes in tokenized assets, cross-border settlements, and multi-jurisdiction payment networks.
However, these institutions cannot operate on a "completely transparent public ledger" — corporate cash flows, supplier networks, foreign exchange risk exposures, contract terms, and customer transaction records must not be disclosed to competitors or the public. What enterprises need is "selective transparency with confidentiality," not "full exposure."
This is exactly the foundation laid by early pioneer projects like Zcash. When Pantera Capital invested in Zcash in 2015, we realized that privacy is not an ideological preference but a necessary condition for actual economic activities. The core insight of Zcash is that privacy protection cannot be "retrofitted" into a system (especially when using zero-knowledge proof technology) but must be embedded in the protocol's core — otherwise, subsequent use would become extremely challenging, fragile, and inefficient.
Launched in 2016 as a Bitcoin fork project, Zcash introduced zk-SNARKs technology, which can hide transaction details while ensuring complete transaction verifiability. Additionally, the mixer protocol Tornado Cash is also a significant milestone in on-chain privacy development: as people seek ways to break the linkability of on-chain transactions, the protocol has seen a significant amount of real user activity.
Tornado Cash USD Inflow Change Pre and Post Sanctions (Source: TRM Labs)
However, Tornado Cash's model has flaws: it emphasizes strong privacy protection but lacks a "selective disclosure mechanism," ultimately leading to high-profile legal actions by government agencies — even though the project is autonomously operated by code, it was still forced to effectively halt. This outcome confirms a key lesson: privacy protection cannot come at the expense of "auditability" or a "compliance path."
This is also the core value of Zama's fully homomorphic encryption technology: FHE supports performing calculations directly on "encrypted data" while preserving the ability for "selective verification and disclosure of information" — a feature that protocols like Tornado Cash did not have from the outset.
The importance of fully homomorphic encryption is evident from the strategies of tech giants: companies like Apple and Microsoft are investing resources to build FHE frameworks. Their investment conveys a clear consensus: for consumers and institutions, "scalable, compliant, end-to-end encryption technology" is the future of digital privacy.
Privacy Needs Are Accelerating
Data confirms this trend: privacy-focused crypto assets are gaining more attention from users and investors. However, the real shift is not being primarily driven by retail speculation but rather by the practical application scenario where "privacy and transparency must coexist":
• Cross-border payments are increasingly relying on blockchain, but enterprises and banks cannot publicly disclose every payment route;
• RWAs need to keep "holdings" and "investor identities" confidential;
• In global supply chain finance, transaction parties need to verify events (such as shipping, invoices, settlements) without revealing trade secrets;
• Enterprise transaction networks need a mode where "auditors and regulators can see, but the public cannot."
Meanwhile, retail users are becoming increasingly dissatisfied with "high-surveillance public blockchains" — on these blockchains, a simple tool can easily reconstruct the transaction graph. Today, "privacy protection" has become one of the core expectations users have for digital currencies.
In short, the market is gradually recognizing a fact: blockchain that cannot provide confidentiality will face structural limitations in institutional-scale applications.
Canton, Zama, StarkWare, and the Next-Generation Privacy Architecture
As the era of privacy renaissance unfolds, a new generation of protocols is emerging to meet institutional needs.
Take Canton Blockchain, for example, which highlights the growing demand from enterprises for "private transaction execution on a shared settlement layer." These systems allow participants to engage in private transactions while benefiting from "global state synchronization" and "shared infrastructure" — Canton's development fully illustrates that enterprises want to harness the value of blockchain while avoiding the public exposure of business data.
However, the most revolutionary breakthrough in the field of private computing may come from Zama — it occupies a unique and more scalable position in the privacy technology stack. Zama is building a "confidential layer" based on fully homomorphic encryption (FHE), supporting calculations directly on encrypted data. This means that the entire smart contract (including inputs, state, and outputs) can remain encrypted while still being verifiable on a public blockchain.
Unlike a "Privacy-First Layer1 Public Chain," Zama is compatible with the existing ecosystem (especially the Ethereum Virtual Machine EVM) — meaning developers and institutions do not need to migrate to a new chain, they just need to integrate privacy features into their existing development environment.
Private Smart Contracts Using Fully Homomorphic Encryption (FHE) (Source: Zama)
Zama's architecture represents the next evolution of blockchain privacy protection: no longer just hiding transactions, but achieving "scalable private smart contracts." This will unlock entirely new use cases — including private DeFi, encrypted order books, confidential real-world asset issuance, institutional-grade settlement processes with secure multiparty business logic — and all scenarios do not require sacrificing decentralization, with some applications expected to go live in the short term.
Currently, private assets are receiving more attention: institutions are actively evaluating privacy layer technology, developers hope to achieve privacy computing without "off-chain system latency and complexity," regulators are also starting to develop frameworks to distinguish between "legitimate privacy tools" and "illegal obfuscation techniques."
Looking to the Future
The privacy narrative in the blockchain industry is no longer about the "opposition between transparency and confidentiality" but about realizing that both are necessary conditions for the next era of DeFi. The overlap of cultural attitudes, institutional needs, and cryptographic breakthroughs is reshaping the direction of blockchain's evolution over the next decade.
Zcash has proven the necessity of privacy protection at the protocol level; protocols like Canton embody institutional demand for a "confidential transaction network"; and Zama is building infrastructure that is expected to integrate these requirements into a "cross-chain universal scalable privacy layer."
Pantera Capital's early investment in Zcash was based on a simple belief: privacy protection is not an "optional." Nearly a decade later, the relevance of this view is becoming increasingly apparent — from tokenized assets to cross-border payments, and enterprise settlements, the key to the next wave of blockchain application landing lies in achieving a "secure, seamless, private" technological experience.
As privacy protection becomes the core theme of this market cycle, protocols that can provide "practical, scalable, compliant confidential solutions" will define the industry's future landscape. Among them, Zama, as a leader with high potential and timeliness in the "Privacy Super Cycle," is standing out.
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Debunking the AI Doomsday Myth: Why Establishment Inertia and the Software Wasteland Will Save Us
Editor's Note: Citrini7's cyberpunk-themed AI doomsday prophecy has sparked widespread discussion across the internet. However, this article presents a more pragmatic counter perspective. If Citrini envisions a digital tsunami instantly engulfing civilization, this author sees the resilient resistance of the human bureaucratic system, the profoundly flawed existing software ecosystem, and the long-overlooked cornerstone of heavy industry. This is a frontal clash between Silicon Valley fantasy and the iron law of reality, reminding us that the singularity may come, but it will never happen overnight.
The following is the original content:
Renowned market commentator Citrini7 recently published a captivating and widely circulated AI doomsday novel. While he acknowledges that the probability of some scenes occurring is extremely low, as someone who has witnessed multiple economic collapse prophecies, I want to challenge his views and present a more deterministic and optimistic future.
In 2007, people thought that against the backdrop of "peak oil," the United States' geopolitical status had come to an end; in 2008, they believed the dollar system was on the brink of collapse; in 2014, everyone thought AMD and NVIDIA were done for. Then ChatGPT emerged, and people thought Google was toast... Yet every time, existing institutions with deep-rooted inertia have proven to be far more resilient than onlookers imagined.
When Citrini talks about the fear of institutional turnover and rapid workforce displacement, he writes, "Even in fields we think rely on interpersonal relationships, cracks are showing. Take the real estate industry, where buyers have tolerated 5%-6% commissions for decades due to the information asymmetry between brokers and consumers..."
Seeing this, I couldn't help but chuckle. People have been proclaiming the "death of real estate agents" for 20 years now! This hardly requires any superintelligence; with Zillow, Redfin, or Opendoor, it's enough. But this example precisely proves the opposite of Citrini's view: although this workforce has long been deemed obsolete in the eyes of most, due to market inertia and regulatory capture, real estate agents' vitality is more tenacious than anyone's expectations a decade ago.
A few months ago, I just bought a house. The transaction process mandated that we hire a real estate agent, with lofty justifications. My buyer's agent made about $50,000 in this transaction, while his actual work — filling out forms and coordinating between multiple parties — amounted to no more than 10 hours, something I could have easily handled myself. The market will eventually move towards efficiency, providing fair pricing for labor, but this will be a long process.
I deeply understand the ways of inertia and change management: I once founded and sold a company whose core business was driving insurance brokerages from "manual service" to "software-driven." The iron rule I learned is: human societies in the real world are extremely complex, and things always take longer than you imagine — even when you account for this rule. This doesn't mean that the world won't undergo drastic changes, but rather that change will be more gradual, allowing us time to respond and adapt.
Recently, the software sector has seen a downturn as investors worry about the lack of moats in the backend systems of companies like Monday, Salesforce, Asana, making them easily replicable. Citrini and others believe that AI programming heralds the end of SaaS companies: one, products become homogenized, with zero profits, and two, jobs disappear.
But everyone overlooks one thing: the current state of these software products is simply terrible.
I'm qualified to say this because I've spent hundreds of thousands of dollars on Salesforce and Monday. Indeed, AI can enable competitors to replicate these products, but more importantly, AI can enable competitors to build better products. Stock price declines are not surprising: an industry relying on long-term lock-ins, lacking competitiveness, and filled with low-quality legacy incumbents is finally facing competition again.
From a broader perspective, almost all existing software is garbage, which is an undeniable fact. Every tool I've paid for is riddled with bugs; some software is so bad that I can't even pay for it (I've been unable to use Citibank's online transfer for the past three years); most web apps can't even get mobile and desktop responsiveness right; not a single product can fully deliver what you want. Silicon Valley darlings like Stripe and Linear only garner massive followings because they are not as disgustingly unusable as their competitors. If you ask a seasoned engineer, "Show me a truly perfect piece of software," all you'll get is prolonged silence and blank stares.
Here lies a profound truth: even as we approach a "software singularity," the human demand for software labor is nearly infinite. It's well known that the final few percentage points of perfection often require the most work. By this standard, almost every software product has at least a 100x improvement in complexity and features before reaching demand saturation.
I believe that most commentators who claim that the software industry is on the brink of extinction lack an intuitive understanding of software development. The software industry has been around for 50 years, and despite tremendous progress, it is always in a state of "not enough." As a programmer in 2020, my productivity matches that of hundreds of people in 1970, which is incredibly impressive leverage. However, there is still significant room for improvement. People underestimate the "Jevons Paradox": Efficiency improvements often lead to explosive growth in overall demand.
This does not mean that software engineering is an invincible job, but the industry's ability to absorb labor and its inertia far exceed imagination. The saturation process will be very slow, giving us enough time to adapt.
Of course, labor reallocation is inevitable, such as in the driving sector. As Citrini pointed out, many white-collar jobs will experience disruptions. For positions like real estate brokers that have long lost tangible value and rely solely on momentum for income, AI may be the final straw.
But our lifesaver lies in the fact that the United States has almost infinite potential and demand for reindustrialization. You may have heard of "reshoring," but it goes far beyond that. We have essentially lost the ability to manufacture the core building blocks of modern life: batteries, motors, small-scale semiconductors—the entire electricity supply chain is almost entirely dependent on overseas sources. What if there is a military conflict? What's even worse, did you know that China produces 90% of the world's synthetic ammonia? Once the supply is cut off, we can't even produce fertilizer and will face famine.
As long as you look to the physical world, you will find endless job opportunities that will benefit the country, create employment, and build essential infrastructure, all of which can receive bipartisan political support.
We have seen the economic and political winds shifting in this direction—discussions on reshoring, deep tech, and "American vitality." My prediction is that when AI impacts the white-collar sector, the path of least political resistance will be to fund large-scale reindustrialization, absorbing labor through a "giant employment project." Fortunately, the physical world does not have a "singularity"; it is constrained by friction.
We will rebuild bridges and roads. People will find that seeing tangible labor results is more fulfilling than spinning in the digital abstract world. The Salesforce senior product manager who lost a $180,000 salary may find a new job at the "California Seawater Desalination Plant" to end the 25-year drought. These facilities not only need to be built but also pursued with excellence and require long-term maintenance. As long as we are willing, the "Jevons Paradox" also applies to the physical world.
The goal of large-scale industrial engineering is abundance. The United States will once again achieve self-sufficiency, enabling large-scale, low-cost production. Moving beyond material scarcity is crucial: in the long run, if we do indeed lose a significant portion of white-collar jobs to AI, we must be able to maintain a high quality of life for the public. And as AI drives profit margins to zero, consumer goods will become extremely affordable, automatically fulfilling this objective.
My view is that different sectors of the economy will "take off" at different speeds, and the transformation in almost all areas will be slower than Citrini anticipates. To be clear, I am extremely bullish on AI and foresee a day when my own labor will be obsolete. But this will take time, and time gives us the opportunity to devise sound strategies.
At this point, preventing the kind of market collapse Citrini imagines is actually not difficult. The U.S. government's performance during the pandemic has demonstrated its proactive and decisive crisis response. If necessary, massive stimulus policies will quickly intervene. Although I am somewhat displeased by its inefficiency, that is not the focus. The focus is on safeguarding material prosperity in people's lives—a universal well-being that gives legitimacy to a nation and upholds the social contract, rather than stubbornly adhering to past accounting metrics or economic dogma.
If we can maintain sharpness and responsiveness in this slow but sure technological transformation, we will eventually emerge unscathed.
Source: Original Post Link
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