Why Privacy Will Be the Biggest Moat in Crypto

Ali Yahya, a general partner at A16Z Crypto, argues that privacy will be the most critical competitive advantage in crypto. He believes that as block space becomes commoditized and easily bridged, privacy will be the key differentiator for blockchains. Privacy creates a strong network effect because migrating secrets between chains is difficult and risky due to fragmented anonymity sets. This "lock-in" effect means users are less likely to move from a privacy-focused chain, leading to a few dominant players. While acknowledging concerns about decentralization, Ali contends that privacy chains can still be permissionless and open source, preserving the core ethos of crypto while offering enhanced security and control over personal data.