Privacy is crucial for blockchain finance, becoming key by 2026, says a16z crypto.
Privacy is a crucial feature necessary for the development of global blockchain finance, and by 2026, it will become a key protective barrier for the crypto industry. This is according to a blog post by a16z crypto.
The authors of the publication suggest that until recently, privacy was a secondary concern for most protocols. However, it is now a quality that can distinguish a project from many others.
“Privacy serves another important function: it creates an ‘on-chain concentration effect’—a kind of network effect of anonymity,” the note states.
Experts added that while transferring assets between open blockchains has become an easy task, “transferring secrets” remains challenging, as moving between private and public environments can lead to the leakage of sensitive metadata.
Compared to many undifferentiated new protocols, where fees are likely to drop to near zero due to competition, anonymous projects will have a “stronger spotlight effect,” according to a16z.
“When users are on public blockchains, it is easy for them to transact across other chains. […] In private networks, by contrast, choice matters much more, as joining one makes it less likely they will switch to another. This creates a winner-takes-all situation,” the company emphasized.
Message Encryption
In the era of quantum technology development and other cybersecurity threats, protecting user communications in messengers is a particularly important area, the blog’s authors assert.
Currently, the main issue with messaging services is the centralized server infrastructure and excessive trust in private organizations.
“Such servers are easy targets for governments, which can shut them down, create backdoors, or compel them to provide personal data. […] Communication does not need a single intermediary company. Messaging requires open protocols that allow us to operate without trust,” explained a16z.
The path to this lies in the decentralization of networks: without private servers, without a separate application, but with open-source code.
According to the company’s specialists, privacy should become a core service, not an addition to other products. This is especially important for the financial sector and healthcare, where cryptographic guarantees for personal data protection are necessary.
“We need ‘secrets as a service’: new technologies that provide programmable, built-in access rules to information, client-side encryption, decentralized key management. […] And all this should be controlled on the blockchain,” the experts added.
Countering Threats
The wave of exploits in 2025 revealed the limitations of the current security model based on audits, even for mature, well-tested protocols, noted a16z.
To achieve maturity, DeFi protection must shift from error pattern detection to property analysis at the design level—from a “maximum effort” strategy to a “principled approach.”
Thus, global security properties will be formally defined and ensured both before and after blockchain deployment.
“Now, instead of assuming all errors will be detected, we will ensure compliance with key security properties in the code itself, automatically canceling any transactions that violate them,” the report’s authors concluded.
Back in late 2025, a16z identified future promising directions for the crypto market, including privacy.
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