This article explores the privacy paradox on public blockchains, examining how transparent networks can enable confidential transactions while maintaining compliance. It identifies 'self-doxxing' as the core privacy problem and discusses potential solutions involving issuers and privacy providers.
The article addresses the growing tension between blockchain transparency and privacy needs as institutional adoption increases. It explains that while public blockchains are pseudonymous by default, privacy problems arise when on-chain data is combined with off-chain information to identify users. The key issue identified is 'self-doxxing'—when transaction parties reveal their public addresses to each other, enabling visibility of all past and future transactions and balances. The article argues that viable institutional privacy solutions must balance confidentiality with compliance requirements, and proposes that issuers of regulated assets and external privacy providers like privacy pools could play different roles depending on whether assets are regulated or non-regulated.
