Blockchain privacy is a right, not a criminal tool

The following is a guest post and opinion of Matthew Niemerg, Co-Founder of the Aleph Zero.

I wont admit to being a fan of much of Europes political direction (or destination) at the moment. News recently that Apple is partly removing end-to-end encryption from its UK customers after the UK government pressure under their Online Safety Act is, shall we say, unsurprising. Rather than weaken encryption globally or introduce backdoors, Apple is removing end-to-end encryption from iCloud accounts in the UK. To say this attempt to stymie privacy by the UK government is misguided is me being on my best behaviour.

The False Logic of Nothing to Hide

The working assumption by governments and regulatory bodies seems to be the tired refrain: If you have nothing to hide, you have nothing to fear. This is not only stupid but dangerously wrong. It fundamentally misunderstands privacy as a concept. Privacy isnt about hiding wrongdoing. Its about maintaining control over ones personal information in a world increasingly hungry for data. Financial privacy, in particular, stands as a cornerstone of individual autonomy. Yet when it comes to digital assets, this basic right is often portrayed as suspicious.

Edward Snowdens response to this flawed logic remains the most succinct rebuttal: Arguing that you dont care about the right to privacy because you have nothing to hide is no different than saying you dont care about free speech because you have nothing to say. Rights arent contingent on their immediate utility to us personally. They exist as safeguards against the inevitable overreach of power. We protect them even whenespecially whenwe dont think we need them.

The reality of crypto use undermines the criminal narrative. According to Chainalysiss 2024 crypto crime report, only 0.34% of all crypto transactions are associated with illicit activity. Let that sink in. More than 99.6% of crypto transactions are legitimate. This stands in stark contrast to the moral panic often generated around blockchain privacy features (the Tornado Cash saga being just one example). If we applied similar scrutiny to cash, we would have banned paper money long ago.

Privacy is a Legitimate Concern

Privacy in crypto serves numerous legitimate purposes. Consider salary negotiations. Would you want your potential employer to see your complete financial history? Or medical payments, should your purchase of medication be visible to anyone scanning the blockchain? Donations to causes, political or otherwise, have long been protected in democratic societies. Without privacy, these fundamental activities become vulnerable to surveillance and control.

Some use cases would be literally impossible without robust privacy protections. Business agreements often require confidentiality. Companies cannot operate if competitors can track every transaction and deduce strategic decisions. Financial inclusion efforts in regions with oppressive regimes would collapse if authorities could monitor and block assistance to vulnerable populations. Journalists protecting sources, dissidents seeking funding, and organizations operating in hostile environments all rely on private transactions to function at all.

If were going to bring more of these activities on-chain, we need privacy.

Thats not to say I, or any of my Aleph Zero colleagues, are complete anarchists. There are laws around KYC and broker reporting requirements in the U.S. and elsewhere that we comply with. But theres a critical distinction between accountable transparency with appropriate authorities and naked exposure to the entire world. The infrastructure of privacy must exist for compliance to be meaningful rather than coercive. Shielder is a great example of this: others cant trace transactions, but users can reveal their identities to exchanges or KYC services when needed.

We Already Have Private Finance, Why not Crypto?

One of the absolute bedrocks of what we expect in crypto privacy is shielded tokens and transactions: what tokens you own and who youre sending them to. This isnt radical. Its what we already take for granted with bank accounts. Your neighbor cant check your account balance. Random strangers cant see who you paid last Tuesday. Yet somehow, when blockchain technology offers these same protections, its framed as enabling criminality rather than restoring basic dignity.

The philosophical foundation for this position is sound. As articulated in the Universal Declaration of Human Rights, privacy is a fundamental right, not a privilege. Financial transactions reveal intimate details about our lives our health concerns, political affiliations, personal relationships, and more. The right to keep these matters confidential underpins individual freedom. Historically, cash provided this privacy naturally. Crypto with privacy features simply extends this tradition into the digital realm.

Moreover, decentralization challenges entrenched power structures. By distributing control and knowledge among many participants rather than concentrating it in banks or governments, privacy-focused crypto creates a more balanced system. This aligns with political theories from the Enlightenment to modern libertarian thoughtcentralized power inevitably leads to abuse, while distributed systems offer natural protection.

Privacy in blockchain is not a bug, its a feature. Its not a tool for criminals, its a right for citizens. As we navigate the complex landscape of digital finance, we must resist the false choice between security and privacy. They are not opposing values but complementary ones. A truly secure financial system protects not only our assets but also our dignity, autonomy, and freedom. Ultimately, it is privacy that makes this dignity possible.

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Text source: CryptoSlate

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