The Proliferation of Privacy on Ethereum

Ironically, the crypto industry has never valued privacy nearly as much as we should.

Maybe privacy is treated as a sacred concept, but to date, most users, builders, and investors have left it on the backburner.

Privacy is vitally important, though, and neglecting it so far has been a critical failure of the crypto industry. As part of its growing efforts to respond here, the Ethereum Foundation notably just introduced Kohaku, a new privacy wallet design.

Kohaku is a "reference wallet," forked from Ambire and built by the EF and other ecosystem teams, that has the potential to become a next-gen standard in Ethereum wallet circles.

The wallet isn't intended (initially) as a mass-market consumer app, but rather as an initial demonstration of how multiple privacy primitives can be woven together.

The big idea is that once we have a successful privacy wallet implementation with enough adoption by users and developers, we finally have a solid foot-in-the-door for the ecosystem to start elevating privacy solutions into more parts of the tech stack. 

All that said, some of the features that Kohaku wants to deliver include: 

• Private sending & receiving.
• IP address / RPC leakage protection.
• Separate accounts per-dapp / isolation.
• Social recovery via zero-knowledge primitives.

These features are what should be standard across all wallets — it's just that no one has put them all together yet. The EF is finally throwing up its hands and saying, “If no one else will do it, we will!” 

How much adoption is left on the table because of a privacy-less ecosystem? 

Degen gamblers and speculators are happy to trade privacy for wealth, but building a mature and consumer-ready ecosystem requires privacy as a first-class citizen in crypto's tech stack. 

The EF has identified a major market failure, and it's moving on it. Kohaku is one significant prong in this blitz. And getting things right here is critically important, not just for the industry but the future of humanity itself! 

Ultimately, the successful execution and adoption of Kohaku and its future spinoffs can bring immense tailwinds to the Ethereum ecosystem, as this will be an Ethereum Virtual Machine innovation first and foremost. 

Users want solutions like this, and institutions fundamentally need them. Most companies simply cannot do things onchain unless they have assurances that they can keep their business secrets private from their competitors. 

My grand takeaway is that Kohaku's arrival is very bullish, and bullish in multiple senses. I’m excited for a crypto future where privacy is built-in and streamlined by default and not an opt-in UX encumbrance.

It’s about time. 2025 is far too late in crypto's evolution for privacy to not be the standard option for those who choose to live a bankless life. 

Onwards! —David