Privacy and Decentralization to Shape the Future of Blockchain, Says a16z Partner

According to Foresight News, Ali Yahya, a general partner at a16z crypto, emphasized in a blog post that privacy will be the most crucial competitive advantage in the crypto industry this year. Privacy is essential for advancing global finance towards blockchain technology, yet it is a feature that most current blockchains lack. It not only differentiates between chains but also creates a lock-in effect, especially in a competitive environment where performance is not the sole factor. Transitioning to a private chain carries higher risks, as it may expose user identities and transaction metadata. In contrast, blockchains with privacy features can generate stronger network effects, while ordinary chains lacking ecosystem or application advantages struggle to maintain user loyalty. Yahya also highlighted that the challenge for messaging applications lies in decentralization rather than quantum resistance. Most messaging apps rely on centralized private servers, making them vulnerable to government intervention. Quantum encryption can be ineffective due to the presence of private servers. Therefore, messaging requires decentralized open protocols that allow users to control their messages and identities. Through decentralized networks, users can communicate securely without needing to trust third parties. Furthermore, privacy is set to become core infrastructure with the introduction of 'privacy as a service.' Data is the foundation of automation and models, yet existing data pipelines are often opaque and variable. This poses challenges for industries that need to protect data privacy, such as finance and healthcare. To address this, data access control must be established to ensure that data usage and access are manageable. 'Privacy as a service' can integrate privacy into the fundamental infrastructure of the internet rather than as an afterthought. Lastly, Yahya noted a shift from 'code is law' to 'spec is law.' The security challenges faced by decentralized finance (DeFi) indicate that current security practices need improvement, moving from rule-of-thumb to principle-based management. In both pre-deployment and post-deployment stages, core attributes must be systematically verified, using AI-assisted tools to enhance verification efficiency. Each attack should trigger these security checks to ensure critical security features are executed, making the system more robust.