2026-01-09 04:25:50

Over the years working in blockchain finance, I've seen too many projects ultimately fail because of a simple choice: privacy or compliance.

Some teams dive headfirst into privacy technology, believing it's the ultimate ideal, but end up completely ignoring regulatory requirements—resulting in their creations falling into gray areas. No matter how advanced the technology, it can't make it onto mainstream financial institutions' ledgers. Other projects go to the extreme opposite, cutting out privacy protections altogether to pass compliance checks. Essentially, they just put a blockchain veneer on traditional finance, with no real innovation.

This contradiction is actually quite ironic—traditional finance has always operated this way. Banks need to protect customer privacy while also cooperating with anti-money laundering (AML) checks; large institutions must conceal their strategies when trading and also report to regulators. These two needs are not inherently conflicting.

But once blockchain enters the scene, this delicate balance is disrupted. Bitcoin's approach to anonymity is fundamentally unacceptable to regulators, so it remains outside mainstream finance. Platforms like Ethereum, while offering programmable flexibility, have all on-chain transactions publicly visible—posing a major problem for institutional clients. Who would want their competitors to see their financial activities through a blockchain explorer?

The real breakthrough should come from designing privacy and auditability into the underlying architecture—not as a patch after the fact, but as a core infrastructure. This way, user privacy and transaction confidentiality are protected, while regulators can still perform compliance checks when necessary. It's a tough path, but some projects are seriously working on it.

Since 2018, projects exploring this direction have accumulated valuable practical experience, using technical solutions to strike a balance between privacy and compliance. For the entire blockchain finance ecosystem, this could be a genuine breakthrough.

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bridgeOops

· 11h ago

That's so right. Many projects are still stuck in the dead end of choosing one over the other. Privacy and compliance are not fundamentally opposed; it all depends on who can truly design a good architecture. Bitcoin's approach is completely laid back, Ethereum is too transparent, and projects in the middle are the way out. Embedding both requirements from the ground up—that's what it means to have thought it through. Early teams that made mistakes in trial and error are actually quite unfortunate; if they choose the wrong path, it's over.

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LiquidationWatcher

· 01-09 04:53

Honestly, privacy and compliance, this pair of rivals, should have reconciled long ago. I really didn't expect someone to be thinking about this as early as 2018... Totally agree, piling up technology is useless; we need to consider it thoroughly from the architecture level. Wait, are there specific projects doing this? Share some details. This is the real breakthrough; otherwise, it will either become underground or wolves in sheep's clothing.

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ser_ngmi

· 01-09 04:53

You are absolutely right. This dilemma is indeed a pain point in the industry. Removing privacy takes away the soul, while compliance compromises competitiveness. Someone should have taken this seriously long ago.

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SnapshotBot

· 01-09 04:47

Honestly, the polarization issue has never ended. Even the best technology needs to be humble and cautious. That's right, who dares to go naked? Institutional investors are all scared to death. This idea sounds simple, but very few actually do a good job at the foundational level. Privacy and compliance should be built in from the start; they can't be fixed with a band-aid. Starting in 2018? Then it's time to show your hand and let the data speak.

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GlueGuy

· 01-09 04:43

Honestly, this set of theories sounds good, but the difficulty of implementation is not ordinary. To put it simply, it's a matter of fish and bear paws—wanting both results often means ending up with neither. For those claiming to have found a balance, I still want to see how they survive in the end. Everyone wants privacy and compliance at the same time, but once regulation steps in, you have to choose a side. Curious about how those guys from 2018 are doing now—are they still living quite comfortably? Privacy technology is indeed impressive, but the regulatory hurdle is too tough to overcome. That's probably why mainstream financial institutions still don't pay much attention to on-chain stuff.

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GovernancePretender

· 01-09 04:33

In plain terms, it's like wanting both fish and bear paws—you really have to have both.

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MEV_Whisperer

· 01-09 04:31

There's nothing wrong with that, but how many people can really walk this tightrope? Most will still fall down.

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