Public Blockchains like Ethereum pride themselves on transparency. But look at the downside It is like living in a transparent glass house. Everyone knows how much money is in your wallet. Everyone knows your salary and spending habits. Competitors know exactly who you are trading with. ๐ Transparency is great for auditing, but a disaster for personal privacy and trade secrets.
๐ธ What Is Privacy Layer 2?
Unlike standard ZK Rollups which use Zero Knowledge tech to compress data, Privacy Layer 2s use ZK to encrypt data.
When you deposit into a Privacy L2, your assets are converted into Encrypted Notes.
You can transfer, Trade, or Farm. Outsiders looking in only see A ZK proof confirming validity, but they cannot see: Who is the sender/receiver? What the amount is? What the asset is?
๐ธ Privacy Layer 2 becomes the key to enabling institutional money to participate in DeFi
Funds will NEVER use current Ethereum DeFi. Why? Because they cannot expose their trading strategies to competitors.
Privacy L2s allow them to trade in Dark Pools while ensuring Blockchain integrity.
๐ธ Next gen Privacy L2s integrate View Keys. You can give this key to tax authorities or auditors to prove clean funds, while keeping secrets from the public. This is the balance between Privacy and Compliance.
๐น The early Internet was HTTP. It shifted to HTTPS so we could safely use credit cards. Blockchain is following the same path. Privacy L2 is the HTTPS layer of Web3.
Do you want the whole world to know your exact account balance? If not, keep an eye on Privacy L2.
News is for reference, not investment advice. Please read carefully before making a decision.
