Privacy is a crucial feature necessary for the development of global finance on the blockchain, making it a key protective barrier for the crypto industry by 2026. This is stated in a blog post by a16z crypto.

According to the authors, privacy has been a secondary concern for most protocols until recently. However, this attribute can now distinguish a project from many others.

“Privacy serves another important function: it creates a ‘concentration effect on the chain’ — a kind of network effect of anonymity,” the note states.

Experts added that transferring assets between public blockchains has become straightforward, but “transferring secrets” remains complex, as moving between private and public environments can lead to leaks of sensitive metadata.

Compared to many undifferentiated new protocols, where fees are likely to drop to nearly zero due to competition, anonymous projects will have a “stronger light effect,” according to a16z.

“When users are on public blockchains, they can easily transact on other chains. […] In private networks, however, choice matters much more, as once they join one, they are less likely to switch to another. This creates a situation where the winner takes all,” the company emphasized.

Message Encryption

In the era of advancing quantum technologies and other cybersecurity threats, protecting user communications in messaging apps is particularly important, the blog authors assert.

Currently, the main issue with messaging services is their centralized server infrastructure and excessive reliance on private organizations.

“Such servers are easy targets for governments, which can shut them down, create backdoors, or force them to provide personal data. […] Communication does not require a single intermediary company. Open protocols are needed for messaging, allowing us to operate without trust,” a16z explained.

The path to this lies in decentralizing networks: without private servers, without a separate application, but with open-source code.

According to the company’s specialists, privacy should be a core service rather than an add-on to other products. This is especially crucial for the finance and healthcare sectors, where cryptographic guarantees for personal data protection are essential.

“We need ‘secrets as a service’: new technologies that provide programmable, built-in access rules to information, client-side encryption, and decentralized key management. […] And all of 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 security must shift from searching for error patterns to analyzing properties 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.

Recall that at the end of 2025, a16z identified future promising directions for the crypto market, including privacy.