Balaji Srinivasan Outlines the Dawn of the Global Privacy Era
Balaji Srinivasan, the former CTO of Coinbase and influential author of The Network State, has declared that the cryptocurrency industry is transitioning into its third and most critical phase: the era of global privacy. Speaking at major industry events in late 2025, Srinivasan outlined a historical framework that categorizes the development of the digital asset space into three distinct eight-year cycles. The first phase, spanning from 2009 to 2017, was dedicated to proving the viability of BTC and decentralized consensus. This was followed by the second phase from 2017 to 2025, which focused on the rise of ETH and the programmability of on-chain assets. As of December 2025, Srinivasan argues that the industry has officially entered its final maturation cycle, where the core narrative is no longer about scalability or speed, but about protecting user data and financial sovereignty through robust encryption.
Zero-Knowledge Proofs as the Core Infrastructure of 2026
The centerpiece of Srinivasan’s privacy thesis is the rapid maturation of zero-knowledge (ZK) technology, which he believes will become as foundational to the digital economy as artificial intelligence. By allowing users to prove the validity of information—such as identity, solvency, or residency—without revealing the underlying data, ZK-proofs solve the primary friction point of public blockchains: the total exposure of financial history. Srinivasan predicts that 2026 will view the emergence of “ZK-everything,” ranging from decentralized platforms that protect trader positions to “ZKYC” protocols that satisfy regulators while maintaining user anonymity. This shift is already manifesting in the market, with renewed interest in privacy-focused networks like Zcash and the rise of Cardano’s Midnight protocol, both of which utilize advanced cryptography to offer a “hedge” against the surveillance risks inherent in transparent ledgers.
The Network State and the Geopolitics of Encrypted Identity
Beyond simple financial transactions, Srinivasan views the privacy era as a prerequisite for the formation of “network states”—globally distributed communities that utilize blockchain to gain diplomatic recognition. He argues that for these digital societies to flourish, they must offer their citizens a level of informational privacy that traditional nation-states can no longer provide. In this framework, encrypted digital identity becomes a form of “digital armor” that protects individuals from both corporate data mining and state-level overreach. As more high-net-worth individuals and “sovereign collectives” move their operations on-chain, the demand for privacy-preserving infrastructure is expected to create a $100 trillion market opportunity over the next decade. Srinivasan concludes that while the previous decade was about making money digital, the next decade is about making digital life private and secure from the ground up.
