📝 Hi, I'm 10, today let's talk about privacy coins, which might be the most confusing part of the cryptocurrency market in 2025. On one hand, they are being pursued and blocked by global regulations, while on the other hand, they have quietly risen by 288%.

Think about it, 97 countries around the world have drawn the red line for privacy coins, and the EU has directly stated that exchanges are not allowed to touch anonymous wallets by 2027. On the other hand, the average loss from corporate data breaches is 4.4 million dollars, and personal privacy is being completely exposed. This is contradictory, so the question arises: should privacy protection be completely hidden, or should there be a backdoor?

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I. Two paths, two ways of living

Monero (XMR) is like an extreme privacy advocate; its design philosophy is pure: either complete anonymity or don't use it. Every transaction automatically hides the sender, receiver, and amount, with no middle ground.

This purity has its charm. In scenarios where absolute anonymity is required, XMR is the king. But the cost is also evident; now only 5 exchanges still support it, and all are contract trades. Trying to buy directly with cash is difficult.

Zcash (ZEC) is taking a different path. It acts like a smooth businessman; you can choose public transactions (like Bitcoin) or private transactions. What's even better is that you can prove the transaction content to specific people without revealing details.

This design is clever; regulators find it acceptable as it can be checked, businesses find it good for protecting trade secrets, and users appreciate that they can choose. That's why ZEC can still be traded on 7 mainstream exchanges, and there is even a $150 million trust fund specifically investing in it.

II. That turmoil exposed what problems

In January this year, Zcash had a major incident where the entire development team collectively resigned due to commercial disagreements. The price dropped by 25% in a week, and the market was in an uproar.

The outflow of funds did not leave the privacy track but instead flowed into XMR, pushing the latter to a historical high. This indicates that the demand for privacy is real; money is just flowing between two choices.

Moreover, a closer look reveals that Zcash's mainnet is operating normally, and the usage rate of the privacy pool is not decreasing but increasing. This seems more like an internal conflict within the management team rather than a technical collapse.

III. Four increasingly evident trends

1. First, complete anonymity is becoming a niche choice.

Reality is harsh; regulators do not allow completely untraceable things to exist. But controllable privacy has significant potential. ZEC's survival on so many exchanges is due to the compliance outlet it provides to regulators.

2. Second, the demand for privacy is a spectrum.

Don't simply categorize as good for good people and bad for bad people. The reality is much more complex: ordinary people are protecting financial privacy, businesses are safeguarding trade secrets, and some are engaged in asset transfers in the gray area.

Of course, there are indeed illegal activities; XMR covers the entire spectrum while ZEC primarily serves the first half. Both have their markets.

3. Third, compliance is not surrender; it is strategy.

Without compliance, there is no liquidity. The delisting of exchanges is the most realistic threat. ZEC's design allows it to enter enterprises and financial institutions, which is the prerequisite for scalable development.

Now all emerging privacy projects are working on programmable privacy; no one is doing complete anonymity anymore.

4. Fourth, technology begins to specialize and collaborate.

ZKP is suitable for sectors like finance and healthcare that require auditing; ring signatures still hold value in small cross-border and anti-censorship scenarios; emerging FHE technology is exploring AI data privacy. They do not replace each other but showcase their strengths in different contexts.

IV. In 2026, a key turning point

In the first half of the year, it may still be about digesting emotions and healing wounds. XMR will continue to bear regulatory pressure, living on the fringes of mainstream finance. Zcash will need time to rebuild trust and see if the new team can tell a complete story.

By the second half of the year, the wind may change. Once these farces settle down, everyone's focus will return to a fundamental question: What real pain points have privacy technologies addressed?

V. Finally, let’s talk about something practical.

Privacy has never been a simple issue of having or not having. It concerns power, trust, and how to exist in a digital society.

XMR represents a kind of idealistic persistence, which is admirable but the road ahead is tough. ZEC has chosen a more pragmatic path, which may go further but also faces more compromises.

Ultimately, what we need may not be a perfect technology, but a diverse toolbox with different tools to address various scenarios. Only then, when the tide of the digital age rushes in, can we enjoy convenience while safeguarding that peace which should not be stripped away. After all, the best privacy is not disappearing but being in control.