Privacy focused cryptocurrencies such as Zcash (ZEC) and Monero (XMR) lack the fundamentals needed for greater mainstream adoption. Although large platforms like Coinbase (NASDAQ:COIN) support Zcash trading now and there are legitimate reasons why these projects could have had real use-cases, the reality is that they do not have the blockchain / DLT network effects to move forward in any meaningful manner. And the introduction of independent zero-knowledge proofs or ZKPs makes it easier to integrate a range of features across digital assets platforms.
For context, the Bitcoin whitepaper was introduced in late 2008 at the time of the Global Financial Crisis. However, BTC benefits from immense first-mover advantage much like Ethereum capitalizes on its enormous network effects since it was the very first smart contract platform. Now though, advocates and supporters of Zcash like BitMEX claim this digital asset has the potential to claim a much larger market share.
However, a careful examination of these tall claims indicates that privacy (whether by default or actively chosen for such transactions) is a nice add-on feature that can be implemented very easily on larger networks like Bitcoin (BTC) and Ethereum (ETH) without much added effort. Much in the same way that the Lightning Network for Bitcoin can enable faster micro-transactions, the privacy features that consumers and business may want can actually be added fairly easily as well to BTC and ETH networks.
In the end, what will ultimately drive greater mainstream adoption is ensuring crypto compliance. If regulators in the US and other jurisdictions cannot come to a reasonable consensus about whether these coins are fully transparent and safe for consumers, then these coins will not get listed on major centralized exchanges. As much as DeFi and decentralized exchanges or DEXes have matured, they are still not supporting most of the crypto trading activity.
Privacy coins such as Monero (XMR) have also raised security concerns and have actually been delisted by exchanges in the past and this has led to their price plummeting. Given these issues and developments, it is clear that privacy coins like Zcash (ZEC) do actually offer a meaningful value proposition. But it is also evident that these so-called privacy features can be implemented in other crypto platforms (and may be an optional instead of the default feature).
Moreover, privacy by itself is not nearly enough to enable widespread mainstream adoption. For any crypto project to thrive, it needs to have a very large number of consumers and other entities using it and building on it on a regular basis. It may seem like a good idea to catch onto hot buzzwords like AI and privacy to get projects started and lifted off the ground, but it will not help them succeed in the long-term.
At present, the only real coins that have proved to be resilient are Bitcoin due to its superior way of transferring value in a decentralized manner while being extremely secure as well. And Ethereum has emerged as the leading smart contract platform for developing decentralized applications or dApps. If any other crypto projects wants to succeed, then they will have to come up with their own unique and very useful value propositions that users and organizations consider appealing.