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The Last 1000x in Crypto: A Privacy Thesis

TL:DR — Bitcoin started with three problems: i) legitimacy, ii) programmability and scale, iii) privacy

Bitcoin solved i) by becoming a trillion dollar asset, Solana/Ethereum solved ii), and iii) is the last remaining piece (and hence market gap with asymmetric upside) with chains like Zcash leading the way

the reason I call privacy the last 1,000x or the last PvE is not just for a soundbite (though it’s also that)

it is based on emergent market asymmetries and gaps, along with the right timing on macro

this includes ZK, but is not limited to ZK, and also includes mixers, FHE, and MPC

a brief sequence of events:

Bitcoin started as a cypherpunk movement for internet-native money, directly as a response to the 2008 financial crisis
at first, it was novel, anarchist, and unproven — no one knew if it would work, and so the race to gain legitimacy was on
as it gained popularity, there were 2 large criticisms of Bitcoin: the lack of programmability (and eventually scale) and the lack of privacy
Ethereum was started to tackle the lack of programmability, and then Solana was started to tackle the lack of scalability in programmability
this is what we have seen play out for the past 5–8 years in crypto, along with Bitcoin gaining legitimacy
improvements will continue to happen on this programmability/scale branch and the Bitcoin branch, but I’m not sure we’ll see another 1,000x improvement
that is to say, I think future improvements are marginal, not order-of-magnitude in scale
on the other hand, Zcash was created to tackle the other branch of criticism: the lack of privacy
if you imagine the technological tree in Civilization (attached), it aimed to progress along the privacy side
the privacy criticism was widely acknowledged by the likes of Satoshi (who cited Zooko on the first Bitcoin post) and Hal Finney in public forums
in those years, you had to get around the big problem in digital cash, the double-spend problem
to get around the double-spend problem, you had to make sure that everyone saw everyone else’s balances. this is actually the main reason why blockchains are transparent by default today. it’s a result of this problem!
In fact, Satoshi was open to adding ZK to Bitcoin for privacy and said that it would allow for a much better Bitcoin but just did not know how to get around the problem of double-spending; the tech was just too new

check the author

so new in fact that Zcash was the first team on earth to ship ZK to production. not just in crypto, but in any industry
but again, the tech was too new and hard to work with, and required many iterations to get right and get rid of trust assumptions. and so the project and ZK overall struggled
which brings us to today. where ZK tech finally works. and where the brand of scale/programmability has reached the upper bound of the technological S-curve
bitcoin has gained legitimacy, solana/ethereum have proven programmability has PM, the privacy branch is the last thing remaining for asymmetric upside
it is also timely. crypto has largely been dominated by speculative and commercial interests as of late, but crypto was started by the cypherpunks and cypherpunks’ aim was to build systems of liberty and privacy using cryptography and code
we are at that stage now
combine this with the macro environment of debt crises, the fact that non-state money has clearly been proven to work with Bitcoin, and the colossal abuses and breaches of power and privacy all over the world spearheaded by Europe — further combine it with the fact that as institutions come onchain, they will require privacy — then this is the time where privacy and ZK will start eating the world
it is also one of the only fields difficult, impactful, and novel enough to suck away meaningful talent from AI, which means it will also attract new capital and funding in a reflexive loop

the age of unstoppable private money at planetary scale is upon us

note: I do not think that others like Bitcoin, Solana, or Ethereum have no upside left. They clearly will become much bigger in the future. However, at their current sizes, 100x moves seem unlikely.