a16z Crypto: Privacy to Become the Most Important Competitive Advantage in the Crypto Field by 2026

According to The Block, a16z Crypto general partner Ali Yahya stated in a blog post on Tuesday that by 2026, privacy will become the most important competitive differentiator for blockchain networks.

Privacy is the key missing feature hindering the global financial shift towards blockchain development, and remains a functionality lacking in most blockchains. Despite networks' throughput and fees becoming similar, privacy alone can now be a powerful factor in distinguishing different chains and attracting users.

The emphasis on privacy extends beyond blockchain itself, as XMTP Lab co-founder and CEO Shane Mac wrote in a blog post on a16z Crypto that with growing concerns about quantum computing, the next phase of secure communication will require a combination of decentralization and encryption technologies.

Mac calls for the establishment of an open protocol where there is no single controlling entity, and users fully own their messages and identities. a16z Crypto also highlights the necessity of 'confidentiality as a service,' positioning privacy as core infrastructure.

Adeniyi Abiodun from Mysten Labs points out that institutions need to encrypt access to sensitive data, as lacking native data access control will force companies to adopt centralized systems that limit interoperability, while programmable access rules can unlock on-chain systems.

Security is also a core issue, with a16z Crypto encryption engineer Daejun Park stating that the 2025 DeFi attacks exposed the limitations of the current audit-led security model, and the industry needs to shift from 'code is law' to 'standards are law'.

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