The world may be moving in a direction where people are more comfortable in having their assets and ownership available for everyone to see, according to Alex Svanevik, the CEO of blockchain analytics firm Nansen.
In an interview with EdaFace’s Zhiyuan Sun, Svanevik highlighted how a balance between privacy and transparency may be attained in the world of blockchain analytics. According to Svanevik, it’s not possible to get the entirety of both in blockchain. He explained that:
“You cannot get 100% transparency and 100% privacy. I think many of us want to have as much transparency as possible on corporate entities, exchanges, protocols, etcetera. But we expect some degree of privacy at the individual level.”
Because of this, the Nansen CEO believes that no one would be willing to place themselves on either of the extremes. Svanevik said that being fully private would make people miss out on the transparency expected out of corporate counterparties. On the other hand, the executive describes being fully transparent as an uncommon stance as people generally want to have some sort of privacy.
Sharing his perspectives, Svanevik said that there’s a generational aspect to the issue of privacy. The executive believes that the younger generation cares less about the privacy parts of crypto. “If you just think about how they use social media, right, TikTok, Instagram, Snapchat and so on, they tend to be very open in sharing about their lives,” he said.
Meanwhile, about 30 years ago, Svanevik said that people would be “quite shocked” if they saw how people are putting their whole lives out on social media. Because of these, the executive predicts that the world may be more comfortable with more asset transparency in the future.
“So, if you own, you know, NFTs, if you own crypto, you might want to show that off to people. You might actually want to put that on your social media, which is what people are increasingly starting to do,” he explained.
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When it comes to solving the trade-off between privacy and transparency, Svanevik believes that projects have to come up with settings that can go between both spectrums. He said that they “probably have to come up with something where in different circumstances you opt for more privacy and in other circumstances, you opt for more transparency.”
The Nansen CEO explained that there could also be some regulatory implications when it comes to balancing transparency and privacy. Svanevik said that regulators might not be comfortable with someone being able to send $500 million in assets in total privacy through protocols like the sanctioned crypto mixer Tornado Cash. However, crypto regulators may be lenient when it comes to people sending assets worth thousands of dollars.
While he hasn’t seen a protocol that “strikes the right balance” between the two things, the executive believes that in the next few years, someone will come up with a protocol that will be able to do so and be acceptable to regulators as well.
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