Rethinking Privacy in the Blockchain Era

The original public blockchain model is being replaced by private networks, with Tempo's recent proposal for private enterprise stablecoin transactions being a significant example. This shift is driven by the need for institutions to maintain confidentiality in their transactions, as public blockchains pose an existential problem with their transparent nature. The question now is what kind of privacy the industry will adopt, with two main approaches emerging: operator-visible privacy, where a trusted intermediary has access to transaction data, and zero-knowledge cryptography, which enables verifiable privacy without revealing underlying data. The choice between these two models will determine the risk surface, compliance posture, and exposure to failure modes of intermediaries, making it a crucial decision for the industry's future.