Challenges and Opportunities of Privacy Technology in the Web3 Era

The roots of blockchain are deeply embedded in privacy technology, particularly cryptography. From elliptic curves to zero-knowledge proofs, these technologies highlight the importance of privacy economics in the Web 3.0 era. However, the reality is not entirely ideal. Certain privacy-focused cryptocurrencies frequently encounter delisting from trading platforms, and there have even been instances where the founders of privacy projects have been arrested. These events indicate that even if some emerging privacy projects manage to get listed on mainstream trading platforms, the geek spirit of privacy projects seems to be gradually fading, and their ultimate product delivery capabilities can hardly be deemed perfect.

In creating privacy products, blockchain projects should perhaps learn from their peers in the Web2 field to enhance their technical level and product quality.

Proton: Demonstrating that Privacy Can Be an Excellent Product Form

"Privacy is a feature, not a product itself."

Simply discussing the supplementary significance of privacy to product forms is not very meaningful. In other words, privacy also needs to find a suitable market. Some tech giants are able to maintain the attractiveness of their products while infringing on user privacy, mainly due to the convenience of their products and strong network effects. Users often choose to accept these products because of their "plug-and-play" and "everyone is using it" characteristics, even having to use them in office settings.

The fine strategies adopted by regulatory agencies have not been effective. Even when imposing hefty fines on certain tech giants, these companies usually manage to earn back that money in a very short time. More importantly, these fines do not translate into revenue for local European tech companies, leaving them even more powerless when facing the giants.

In the face of this challenge, Proton has adopted a strategy of building its own product ecosystem. Originating from the research background of CERN (European Organization for Nuclear Research), it inherently possesses more credibility than commercial companies. Through cryptographic technology, open-source code, and product audits, the privacy products built by Proton have real significance – users can achieve corresponding functions without relying on the full suite of services from certain mainstream tech companies.

Although Proton's network effects and scale effects cannot currently compete with those of tech giants, the products they offer are already suitable for everyday use compared to their peers in the blockchain field, making them a qualified alternative.

Proton's product line mainly revolves around Proton Mail. It is worth mentioning that Proton Mail is also the preferred choice for some tech entrepreneurs. It can be used without linking a mobile phone number and supports end-to-end encryption, ensuring the privacy of email transmission. Before certain instant messaging tools are regulated, using Proton Mail in conjunction can essentially create a fairly high level of commercial privacy experience.

Proton has also begun to venture into the Web3 space, launching the Proton Wallet. Unlike some transaction-oriented wallets, the features of the Proton Wallet are relatively simple. The significance of Proton lies in proving the feasibility of building products based on privacy technology. Unlike the advertising profit model of traditional giants, Proton adopts a paid system; and unlike the token economics system of its Web3 peers, Proton has not issued its own token. We can refer to it as:

Non-tokenized practices of cryptographic technology.

From Skiff to Emerging Projects: Tokenization Attempts in Cryptocurrency Technology

Compared to Proton's robust approach, some emerging Web3 privacy projects seem more inclined to seek development through token issuance. However, the performance of these projects in terms of product is not satisfactory.

For example, although a certain document collaboration platform offers an IPFS-based document suite and encrypted email services, its user interface experience is poor, making it difficult to compete with similar Web2 products. This also reflects a common issue faced by current Web3 products: limited by the performance bottlenecks of the underlying blockchain, it is challenging to develop large-scale applications that can compete with Web2 products.

Other Web3 privacy projects are also looking for their own positioning. Some projects are gradually shifting their focus to the VPN sector, while others emphasize applications in the AI field. There are also some projects still exploring application scenarios for technologies such as Multi-Party Computation (MPC).

However, relying solely on technical narratives and token issuance is not enough to support the long-term development of a project. What truly matters is finding the intersection of privacy technology and real-world application scenarios, and developing products that can solve practical problems. Empty discussions of technical concepts without addressing real issues may ultimately undermine the credibility of these technologies in society.

Conclusion

Looking back at some early privacy coin projects, they represented an attempt to genuinely consider how to integrate cryptographic technology with their own application scenarios after Bitcoin. However, as these projects have gradually been removed from mainstream trading platforms, it seems to herald the end of an era.

In the future, so-called privacy technology projects may need to rethink their positioning and value propositions. Relying solely on technological concepts and token economics may not be sufficient to support long-term development. The real challenge lies in how to transform privacy technology into products and services that can solve real problems and meet user needs. Only in this way can the privacy economics in the Web3 space avoid the fate of eventual bankruptcy and provide users with truly valuable privacy protection solutions.