CZ: Lack of Onchain Privacy is Hindering Crypto

Binance cryptocurrency exchange’s co-founder Changpeng Zhao, known as CZ, stated that the lack of privacy in onchain transactions is one of the biggest obstacles to the mass adoption of cryptocurrencies as a payment method and exchange medium. CZ exemplified that if a company makes onchain crypto payments to employees, anyone can see the salaries by clicking on the ‘sender’ address, emphasizing that businesses and institutions avoid paying expenses with crypto for this reason. Although this transparency is a fundamental feature of blockchain, in practice, it risks trade secrets and personal data.

Source: CZ

CZ, in a previous conversation with All-In Podcast host Chamath Palihapitiya, also expressed that onchain transparency creates physical security risks. He noted that wealth maps can be created by tracking addresses, increasing risks of robbery or blackmail. These comments follow the resurgence of privacy and cypherpunk philosophy in crypto.

CZ discusses the state of the crypto industry with Chamath Palihapitiya. Source: All-In Podcast

CZ’s Salary Example: Why Do Businesses Avoid It?

In the example emphasized by CZ, a company’s salary payments with ETH or BTC become visible to everyone on blockchain explorers. The amounts distributed from the sender address to recipients reveal employee hierarchy and wage differences. This eliminates competitive advantage and leads to loss of motivation. Technically, flows can be tracked by analyzing transaction graphs in UTXO model or account-based systems.

Onchain Transparency Creates Physical Security Risks

CZ linked address wealth to physical threats in the podcast. Whale addresses can be tracked to estimate locations. Graph analysis tools (e.g., Chainalysis) deanonymize owners through cluster analysis. This irony of Bitcoin’s cypherpunk origins demonstrates the necessity of privacy layers.

Support from Kaspa and Shielded Tech Experts

Former Kaspa Business Development Expert Avidan Abitbol stated that companies will not adopt blockchain without privacy as transaction data can reveal trade secrets, while former Shielded Technologies CEO Eran Barak noted that with the advancement of AI, onchain privacy technologies will become mandatory. AI will make privacy even harder with pattern recognition.

Privacy Discussion in ALT Coin and Market Impact

CZ’s comments could create opportunities for privacy-focused coins like ALT detailed analysis. ALT is in a downtrend at current $0.01 price; 24h -5.60%, RSI 39.07 (below neutral). ALT futures should be monitored. BlockDAG coins like KAS also carry similar risks.

ALT Support and Resistance Levels Table

Supertrend bearish, EMA 20: $0.0093. Privacy upgrades could trigger an ALT rally.