DeutschCoinbase founder Brian Armstrong surprises the crypto scene. The Base blockchain will in the future allow confidential money transfers. The network is thus following a current trend. However, because authorities receive special rights, Armstrong is receiving a lot of criticism.
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Coinbase Founder Surprises: Base Enables Confidential Transactions
Coinbase founder Brian Armstrong recently announced that Base would be equipped with confidential transactions. Base is a crypto network that was released by Coinbase in August 2023.
Since then, the network has risen – measured by TVL – to become the second most popular project of its kind. It is a scaling solution for Ethereum. As of the editorial deadline, there are 15.5 billion US dollars in the network. Only Arbitrum is larger in this sector.
Back in March, Coinbase announced: In order to allow more work on Base in the future, they acquired the developer of the blockchain Iron Fish. The decision to acquire was made because these developers have in-depth expertise in the area of privacy and encryption.
Now, Coinbase founder Brian Armstrong has announced new details. Base will in the future offer the option of confidential transactions. So far, money transfers have been publicly traceable. Through encryption, the aim is to establish privacy for the benefit of users.
“Base is working on confidential transactions. We already acquired the Iron Fish team in March 2025 to start working on it. More information will follow shortly,” says Armstrong.
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Apparently, the encryption is to take place natively on Base. Iron Fish is a blockchain that can offer an encrypted structure for all cryptocurrencies through a token bridge. It should continue to remain independent.
Blockchain Encryption is Growing into a Trend in 2025
The encryption of the blockchain is now growing into a trend. Only in September had Ethereum announced significant improvements. The central part of this is that the previously transparent blockchain will then allow confidential transactions.
Most large blockchains are transparent in 2025. This creates many dangers for users. A blockchain address can, for example, be assigned to a real identity and thereby enable conclusions to be drawn about a person’s activities, purchases and assets.
Furthermore, transparent blockchains are susceptible to sandwich attacks. Prices on decentralized marketplaces can be manipulated. While attackers earn money from it, the unsuspecting users suffer damage.
The Ethereum Foundation fears that ETH could become an instrument of state surveillance without privacy.
This concern apparently does not exist with Base. Although Iron Fish is supposed to implement encryption using zero-knowledge proofs, authorities should be able to eliminate these. Via a separate access, authorities receive insight into all transactions in order to trace the movements of the money despite encryption.
Armstrong’s announcement therefore caused enormous criticism on X. Many users criticize that Base makes special rights available to authorities.
“Let’s be honest: If your ‘privacy’ comes with a backdoor, then it’s not privacy, but just permission,” wrote the developers of the Edge Wallet on X.
“History shows that Base has nothing truly private or censorship-resistant about it,” wrote another critic, earning much approval for it.
The recent price development of Zcash (ZEC) shows that the market is definitely interested in privacy coins. The second-largest privacy coin was able to increase its market value by 500 percent in the last four weeks.
