The Milk Road Show The “Privacy Chain” Thesis: Why Crypto’s Next Winners Won’t Be Public
May 6, 2026
Ali Yahya, general partner at a16z who leads their crypto Fund 5 and advises on infrastructure and crypto–AI, explains why privacy could be crypto’s next big moat. He discusses why institutions may avoid public chains. He outlines practical privacy uses in finance, different technical approaches, and how programmable privacy can enable compliant on‑chain activity. He also previews AI agents using crypto rails.
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Crypto Infrastructure Is Finally Scalable
- Crypto infrastructure has matured to support billions of users with sub-second, low-cost settlement, making it ready for mainstream financial activity.
- Ali Yahya cites transaction throughput rising from ~10–14 TPS to tens of thousands and sub-cent fees as the enabler for mass adoption.
Privacy Provides Chains With Stronger Network Effects
- Privacy is a core differentiator for next-gen blockchains because public chains are easy to migrate from and lack defensibility.
- Private chains encrypt state, raising switching costs and giving stronger network effects and long-term defensibility.
Progress From Trusted To Trustless Privacy
- Choose a privacy approach based on use case and consider progressing from trusted to trustless over time.
- Ali Yahya suggests starting pragmatic (centralized/trusted hardware) then layer cryptographic zero-knowledge as needs evolve.