From Bitcoin to Zcash: Why Privacy is the "Last 1000x Opportunity" in Crypto

Author: Mert Mumtaz, CEO of Helius Labs

Translation: Saoirse, Foresight News

Bitcoin initially faced three core challenges: legitimacy, programmability and scalability, and privacy protection.

Bitcoin addressed the legitimacy issue by growing into a trillion-dollar asset class; public blockchains like Solana and Ethereum solved the programmability and scalability issues; and now privacy—the last unsolved challenge, and thus a market gap with asymmetric return potential—is being pioneered by blockchain projects such as Zcash.

I refer to the privacy domain as the "last 1000x opportunity" or the "last PvE (player versus environment)赛道," not merely as clickbait (though the phrase is indeed catchy), but based on a comprehensive assessment of emerging asymmetric opportunities, unoccupied territories in the market, and macro-level timing. This field encompasses not only zero-knowledge proofs (ZK), but also mixers, fully homomorphic encryption (FHE), and secure multi-party computation (MPC).

Evolution of the Cryptocurrency Industry

Bitcoin originated from the cypherpunk movement, aiming to create an internet-native currency as a direct response to the 2008 financial crisis.

In its early days, Bitcoin was innovative, anarchistic, and uncertain—no one could predict whether it would succeed. Thus, "achieving legitimacy" became the primary goal at the time.

As awareness grew, Bitcoin faced two major criticisms: lack of programmability (later extended to include "lack of scalability") and lack of privacy protection.

Ethereum emerged to address the "lack of programmability"; later, Solana was launched to further solve the "scalability limitations within programmable environments."

Over the past 5–8 years, the development trajectory of the crypto industry has followed this very path: Bitcoin steadily consolidating legitimacy, while Ethereum, Solana, and other public chains advancing programmability and scalability.

Going forward, both the programmability/scalability space and the Bitcoin ecosystem will continue to improve, but it's unlikely they'll see another "1000x breakthrough"—in other words, advancements in these areas will be more about "marginal improvements" rather than "order-of-magnitude leaps."

On the other hand, Zcash was created specifically to tackle the other major unresolved issue in crypto: lack of privacy. If we view the development of human technology as a "technology tree," Zcash aims to advance the "privacy branch."

The criticism regarding lack of privacy has long been acknowledged by pioneers like Satoshi Nakamoto and Hal Finney (a key early contributor to Bitcoin, who on January 12, 2009 became the first person to receive a Bitcoin transaction and was an important technical collaborator with Satoshi; he frequently discussed Bitcoin’s privacy shortcomings in public forums such as Bitcointalk). Notably, in his very first Bitcoin-related post, Satoshi cited the views of Zooko (Zooko Wilcox-O’Hearn, a leading scholar in zero-knowledge proofs and privacy cryptography, and one of the early core contributors to Zcash).

In early cryptocurrency development, the central problem to solve was the "double-spending problem" (i.e., spending the same funds twice). To prevent double-spending, it was necessary to ensure that "all participants could see everyone else’s account balances"—this is precisely why blockchain defaults to "transparent and traceable" today, a fundamental compromise made to solve double-spending.

In fact, Satoshi publicly expressed willingness to integrate ZK technology into Bitcoin to enhance privacy, stating it would make Bitcoin "much better." However, at the time, technological maturity limited this possibility—ZK proofs were too novel to implement without compromising double-spending prevention.

The Present and Future of the Privacy Track

The novelty of zero-knowledge proof technology is evident in the fact that the Zcash team was the first in the world to deploy ZK in a production environment—not just in crypto, but across all industries.

However, early ZK technology had clear drawbacks: extremely high development difficulty, poor usability, requiring multiple iterations for refinement, and eliminating "trusted setup" assumptions (i.e., not relying on specific third parties). As a result, both the Zcash project and zero-knowledge proof technology as a whole experienced prolonged developmental struggles.

Today, the situation has fundamentally changed: ZK technology has matured and can now be reliably deployed; meanwhile, the programmability/scalability track is approaching the upper limit of its "technology S-curve" (i.e., growth is slowing and marginal returns are diminishing).

The current landscape of the crypto industry is clear: Bitcoin has established legitimacy, Solana and Ethereum have validated product-market fit (PMF) for programmability, and the privacy track stands as the last remaining area with asymmetric return potential.

More importantly, now is the "golden moment" for the privacy sector to explode: although the crypto industry in recent years has often been driven by speculation and commercial interests, its origin lies in the cypherpunk movement—the core mission of which was to use cryptography and code to build systems that "protect freedom and privacy." Today, the industry is gradually returning to this foundational purpose.

Looking at the macro environment: global concerns over debt crises persist; Bitcoin has proven the viability of non-state-issued money; at the same time, abuses of power and privacy violations are increasingly common worldwide (especially in Europe); furthermore, as traditional financial institutions accelerate their move onto blockchains, their demand for transaction privacy will significantly increase. These combined factors indicate that privacy technologies and zero-knowledge proofs are reaching an inflection point where they begin to "eat the world."

The privacy track also holds a key advantage: it is one of the few fields that is sufficiently difficult, impactful, and innovative enough to attract top-tier talent away from artificial intelligence (AI). And the concentration of talent will further drive capital inflows, creating a virtuous cycle between talent and capital.

In conclusion, a planetary-scale, unstoppable era of private money is within reach.

Note: I am not suggesting that projects like Bitcoin, Solana, or Ethereum have no room for growth—they will clearly scale much larger in the future. But given their current size, achieving "100x growth" is essentially impossible.