Ethereum’s Quest for Privacy

At the recent Ethereum Cypherpunk Congress 2 on November 16, 2025, the one and only Vitalik Buterin took the stage to chat about wallet privacy in Ethereum. His keynote, titled “Kohaku: Wallet Privacy On Ethereum,” delivered a pretty blunt message: yes, the cryptography is solid, but user experience? Not so much!

Ten Years of Investments and Still Searching

Buterin kicked things off by reminding everyone that Ethereum has been pouring resources into privacy and security infrastructure for a decade. He gave a shout-out to enhancements introduced in 2018, like elliptic-curve precompiles (yes, they sound fancy, right?) that serve as the backbone for projects like Tornado Cash and Railgun. He also praised the Privacy & Scaling Explorations crew for their innovative work with zkSNARK protocols and other mind-bending experiments.

From 2016 DAO Hack to Multisig Wallets

On the security front, he labeled the infamous 2016 DAO hack as a game-changer for the ecosystem, leading to more stringent auditing practices, the emergence of teams like SEAL, and a shift towards multisig wallets—once a mere dream but now quite mainstream!

Why Are Users Still Struggling?

But despite this progress, Buterin pointed out that average users are still finding it tough to access the robust privacy and security features Ethereum promises. “In terms of real-world privacy and security for users, we’re not quite hitting the mark yet,” he lamented. But don’t lose hope! He believes this year can bring that much-needed change.

Privacy Stack: Solid But Needs Polish

“Technically, our privacy stack is as solid as a rock,” Buterin claimed, noting that generating a proof can take less than a second on a laptop or just two seconds on a phone. But here’s the kicker: the hassle starts at the wallet layer.

The Hassle of Wallets

“Using a privacy protocol? You need a separate seed phrase! No multi-sig option available!” he exclaimed. This means if you stash your coins in a private pool, it’s all based on just one key. You’ll likely need to dive into a separate privacy wallet, which, trust me, involves way too many clicks just to send and withdraw privately. And let’s not even start on transaction broadcasting—sometimes it feels like you need a degree in VPN operations!

The Last Mile Challenge

“We’re in this very last mile stage,” Buterin said, echoing a theme that’s crucial. It’s in this final stretch where we really need to double down and improve.

Privacy is Freedom… and More!

Rewinding to a broader discussion on privacy, he highlighted its role in fostering freedom, order, and progress. Privacy gives us the wiggle room to live our lives without a hundred pairs of eyes peeking in. It’s essential for using data responsibly in areas like medicine and science, all without spiraling into a dystopian reality.

Risks and Rewards in Security

When it comes to security, he believes we’re too obsessed with catastrophic loss risks while ignoring the everyday security needs. Take assets in DeFi: invest and you might see some profits, sit back and you earn 0%. But mess up and lose your private keys? Congratulations, your returns go negative!

Expanding the Privacy Conversation

Buterin criticized the narrow focus on on-chain ZK-proofs when talking about privacy. He wants to broaden the discussion to include user experience, the privacy of data retrieval, and network-level privacy enhancements—everything needs a protective bubble!

Let’s Level Up Security

But he didn’t stop there! He proposed some nifty ideas for a more user-friendly security model, suggesting that moving larger sums should require more buttons and steps for authorization. Plus, recovery options and on-chain version control could be game-changers in making wallets safer.

Kohaku: The Future of Wallets

Excitingly, Kohaku—a new Ethereum framework aiming to boost wallet security and privacy—is in the works, aiming to dial up the normalcy of privacy in our digital lives. Buterin and co. dropped this news on October 9, emphasizing that privacy should be a given, not a luxury.

Wrapping It Up

So there you have it! In 2025, Ethereum boasts strong security, progressive privacy research, and tooling that’s come a long way since the stone-age days of Zcash, where it took forever to sign a transaction. The goal now? Let’s wrap up that last mile and get those user-facing aspects polished up and ready to shine!

As of now, ETH is hanging out at $3,194. Hold onto your wallets, friends!