Ethereum co-founder Vitalik Buterin has been advocating for years privacy in the crypto space. Buterin argues that user onboarding alone is not enough, warning that widespread utilize of “walled gardens” would undermine the fundamental purpose of decentralized systems.
“The goal is not to get people on board with Ethereum. The goal is to get people on board with openness and sovereignty,” he recently wrote on the website X post.
Buterin is one of cryptocurrency’s most prominent proponents of privacy as a core industry value, emphasizing individual protection from state and corporate surveillance and arguing that decentralization helps disperse power away from a few dominant actors.
This year, decentralized identity has emerged as one of the industry’s most vigorous responses to digital surveillance. Rather than focusing on a single global identifier, up-to-date efforts are increasingly emphasizing selective disclosure enabled by up-to-date technologies, allowing users to prove specific attributes such as uniqueness, eligibility or compliance without revealing their full identity.
This change reflects a broader challenge facing blockchains, applications and regulators alike: how to verify users without turning networks into surveillance systems.
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Ethereum is becoming a major testing ground
It’s no surprise that Ethereum has emerged as one of the main testing grounds for decentralized infrastructure that protects identity and privacy.
On October 29 threadEthereum’s X account shows that more than 750 privacy-focused projects were being built on the network, many of which focused on identity, credentials and selective disclosure rather than anonymous payments alone.
The thread received praise from the community, which responded via Book of Ethereum, a community-run account focused on Ethereum’s culture and ethos, with a post describing privacy, zero-knowledge tools, and human-centric identity as an “evolving reality” on Ethereum, rather than a distant ideal.
This year, Buterin also directly addressed the issue of decentralized identity in writing.
On June 28 essaywarned that early attempts to replace centralized logins with a single, persistent onchain identifier could still pose significant risks, arguing that even privacy-preserving identity systems could enable long-term tracking, enforcement or loss of anonymity when too much activity is tied to a single identifier.
Buterin instead advocates for attribute-based verification, where users prove only what a specific application needs to know, rather than presenting a single global identity. Zero-knowledge evidence is a tool that makes this possible, allowing a person to prove the truth of a statement without revealing underlying personal information.
In Buterin’s view, this approach protects privacy while avoiding the dangers of consolidating identities into a single, persistent digital identifier. In December, Buterin suggested that Elon Musk should implement zero-knowledge proofs and blockchain-based systems X to demonstrate that content ranking algorithms operate fairly.
Related: Buterin says up-to-date X location feature is “risky” as cryptocurrency users raise privacy concerns
From enterprises to identity confirmation systems
Beyond Ethereum, enterprise-centric identity platforms have emerged in 2025. In August, Hashgraph Group launched IDTrust, a sovereign identity platform built on the Hedera network, positioning it as a decentralized option for governments and institutions seeking digital credentials.
Identity confirmation systems, which aim to verify that an account corresponds to a real and unique human and not a bot or duplicate, have also evolved in 2025, with Sam Altman’s World remaining the most critical example.
The World ID global identity protocol aims to allow users to prove online that they are real, unique people, without revealing personal information. By design documentationafter biometric verification via iris scan, the data is encrypted, sent to the user’s device and deleted from the verification equipment, so only the user controls their World ID, without sharing personal data with third parties.
While biometrics approaches focus on human uniqueness at scale, critics raise persistent concerns about privacy and coercion.
The resurgence of decentralized identity in 2025 has also attracted the attention of leading figures in the cryptocurrency industry. In June, Coinbase CEO Brian Armstrong identified decentralized identity as a key pillar of the next phase of the Internet, writing that it “takes off” with decentralized social media and prediction markets.
Digital identity meets state supervision requirements
As governments move towards digital identity systems, questions around data control and privacy become increasingly critical.
In Switzerland, a country often cited for its robust tradition of protecting privacy, proposed surveillance reforms have faced renewed scrutiny. In January, the Swiss Federal Council proposed revising the OSCPT (Regulation on the Supervision of Postal and Telecommunications) to expand monitoring obligations for telecommunications providers and extend these requirements to services such as social networks, messaging applications and VPNs.
Under the bill, the changes would require service providers with at least 5,000 users to verify the identity and decrypt any communications that are not protected by end-to-end encryption.
The proposal received a robust response. Decentralized VPN provider Nym has urged Swiss citizens to contact their elected officials and oppose the proposal. Business he wrote: :
At a time when the Swiss are celebrating the success of leading privacy companies such as Proton and Threema, when the army itself has decided to utilize Threema, and when other promising players such as Nym are emerging in the field of privacy-friendly technologies and protecting people’s digital integrity, this regulation of the Federal Council is destroying the entire sector.
In July, privacy-focused technology company Proton he said froze investment in Switzerland amid uncertainty over the proposal, redirecting $100 million to data centers in Germany and Norway.
December 10 Swiss Council of State moved stop the proposed expansion of telecommunications supervision by tacitly supporting a motion calling on the Federal Council to reconsider the reform.
In the UK, blockchain Concordium launched a mobile app in August that allows users to prove they are over 18 using zero-knowledge proofs, without revealing their identity. The publication comes after the UK introduced mandatory online age verification rules for adult content.
In the United States, Google announced in April, the expansion of government-issued digital IDs in Google Wallet in many U.S. states, allowing the utilize of mobile IDs at DMV and TSA checkpoints.
The update also introduced zero-knowledge proofs for age verification, highlighting that the technology is no longer confined to crypto-native projects but is increasingly being adopted by Massive Tech platforms as part of mainstream digital identity systems.
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