Privacy coins exist on a spectrum that most people don’t understand. Monero hides everything from everyone by default. Zcash offers optional shielded transactions. Dusk does something fundamentally different that makes way more sense for institutional finance but gets less attention because it’s less ideologically pure.
Monero’s approach is maximalist—complete anonymity for all transactions always. No one can see amounts, addresses, or transaction graphs. For individuals wanting financial privacy from surveillance, this works. For institutions operating under AML and KYC regulations, it’s completely unusable. You literally cannot prove compliance when everything is hidden.
Regulators have predictably responded by delisting Monero from major exchanges and pressuring platforms to avoid it. The Korean government banned it entirely. European exchanges dropped it preemptively. Full anonymity creates regulatory hostility that limits real-world utility regardless of technical merit.
Zcash tried a middle path with optional privacy. Users can choose transparent or shielded transactions. In practice, most transactions stay transparent because shielded transactions are slower and more expensive. The optional nature means privacy becomes a flag—if you’re using shielded transactions, what are you hiding? It defeats the purpose.
Dusk’s selective privacy model recognizes that different parties need different information. Competitors shouldn’t see your business strategy. But regulators investigating money laundering need targeted access. Auditors verifying compliance need specific data. Shareholders need certain disclosures.
Zero-knowledge proofs enable this granularity. A bank using Dusk can keep transaction details confidential from the public and competitors while proving to regulators that all transfers comply with sanctions screening. An investment fund can hide portfolio positions from front-runners while still providing required disclosures to authorities.
This isn’t philosophical purity, it’s pragmatic design for how regulated finance actually operates. Institutions need privacy and compliance simultaneously. Choosing one over the other makes the infrastructure unusable.
The tradeoff is complexity. Monero’s codebase is simpler because it doesn’t handle selective disclosure. Dusk’s zero-knowledge systems require more sophisticated cryptography and careful permission management. More complexity means more potential bugs and attack surfaces.
Whether selective privacy gets institutional adoption while full anonymity stays niche will determine which approach was correct.