a16z Crypto: Privacy will become the most important competitive advantage in the crypto space by 2026

According to The Block, a16z Crypto general partner Ali Yahya stated in a blog post released on Tuesday that by 2026, privacy will become the most important competitive differentiator for blockchain networks.

Privacy is a key missing feature that hinders the global financial sector's full transition to on-chain development, and it is a feature that most blockchains still lack. Although the throughput and transaction fees of various networks have become more consistent, privacy alone is now enough to serve as a powerful factor in distinguishing different chains and locking in users.

The emphasis on privacy is not limited to the blockchain itself. Shane Mac, co-founder and CEO of XMTP Labs, wrote in a16z Crypto's blog post that as concerns about quantum computing grow, the next phase of secure communication will require a combination of decentralization and cryptographic technology.

Mac called for the establishment of an open protocol without a single controlling entity, where users fully own their messages and identities. a16z Crypto also emphasized the necessity of "confidentiality as a service," positioning privacy as core infrastructure.

Adeniyi Abiodun from Mysten Labs pointed out that institutions need to ensure encrypted access to sensitive data. The lack of native data access control will force enterprises to adopt centralized systems that limit interoperability, while programmable access rules can unlock on-chain systems.

Security is also a core issue. a16z Crypto cryptographic engineer Daejun Park stated that the attack incidents in the DeFi space in 2025 exposed the limitations of the current audit-driven security model, and the industry needs to shift from "code is law" to "regulation is law."