For years, Ethereum co-founder Vitalik Buterin has emphasized the importance of privacy within the cryptocurrency landscape. Buterin believes that simply onboarding users isn’t sufficient, warning that the proliferation of “walled gardens” could compromise the fundamental purpose of decentralized systems.
“The aim is not merely to bring people onto Ethereum. The aim is to introduce people to openness and self-sovereignty,” he recently stated in a X post.
Buterin is recognized as one of crypto’s foremost champions of privacy as a core principle, advocating for individual protection against state and corporate surveillance and asserting that decentralization disperses power away from a select few.
This year, decentralized identity has emerged as a prominent response to digital surveillance in the industry. Instead of standardizing on a singular global identifier, new initiatives increasingly focus on selective disclosure through innovative technologies, enabling users to demonstrate specific attributes—like uniqueness, eligibility, or compliance—without exposing their complete identity.
This transition highlights a wider challenge confronting blockchains, applications, and regulators: verifying users while ensuring networks don’t devolve into surveillance systems.
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Ethereum rises as the primary testing ground
Unsurprisingly, Ethereum has surfaced as a leading testing ground for decentralized identity and privacy-enhancing infrastructures.
In an Oct. 29 thread, Ethereum’s X account noted the development of over 750 privacy-centric projects on the network, many focusing on identity, credentials, and selective disclosure instead of merely anonymous transactions.
The thread was positively received by the community, with the Book of Ethereum, a community-driven account focusing on Ethereum’s culture and ethos, responding with a post that described privacy, zero-knowledge tools, and human-centric identity as an “unfolding reality” on Ethereum rather than a far-off ideal.
Buterin has also expressed his views directly on decentralized identity in writing this year.
In a June 28 essay, he cautioned that initial efforts to replace centralized logins with a single, persistent on-chain ID could still pose significant risks, arguing that even privacy-focused identity systems may allow for long-term tracking, coercion, or loss of anonymity when too much activity is linked to one identifier.
Instead, Buterin promotes attribute-based verification, where users only prove what is necessary for a specific application rather than presenting a singular global identity. Zero-knowledge proofs enable this by allowing an individual to validate a statement without disclosing their underlying personal information.
In Buterin’s paradigm, this method safeguards privacy while circumventing the pitfalls of consolidating identity into a single, enduring digital ID. In December, Buterin suggested that Elon Musk ought to adopt zero-knowledge proofs and blockchain systems on X to illustrate that its content-ranking algorithms function fairly.
Related: Buterin says X’s new location feature ‘risky’ as crypto users flag privacy concerns
From enterprises to proof-of-personhood systems
Beyond Ethereum, enterprise-oriented identity platforms have progressed in 2025. In August, the Hashgraph Group introduced IDTrust, a self-sovereign identity platform built on the Hedera network, presenting it as a decentralized alternative for governments and institutions exploring digital credentials.
Proof-of-personhood systems, which strive to verify that an account is linked to a real, unique human rather than a bot or duplicate, have also progressed in 2025, with Sam Altman’s World being the most notable example.
World’s identity protocol, World ID, is designed to enable users to confirm they are unique human beings online without disclosing personal data. According to the project’s documentation, after biometric verification via an iris scan, the data is encrypted, sent to the user’s device, and deleted from the verification hardware, ensuring that only the user has control over their World ID, with no personal information shared with third parties.
While its biometric approach aims at establishing human uniqueness at scale, critics have raised ongoing privacy and coercion concerns.
The resurgence of decentralized identity in 2025 has also gained traction among leading crypto figures. In June, Coinbase CEO Brian Armstrong framed decentralized identity as a crucial element of the internet’s next phase, writing that it is “gaining momentum” alongside decentralized social media and prediction markets.
Digital identity meets state surveillance concerns
As governments shift towards digital identity systems, issues related to data control and privacy are increasingly pressing.
In Switzerland, frequently cited for its robust privacy tradition, proposed surveillance reforms have sparked renewed scrutiny. In January, the Swiss Federal Council suggested revising the OSCPT (Ordinance on the Surveillance of Postal and Telecommunication Correspondence) to extend monitoring obligations for telecom providers and expand these requirements to encompass social networks, messaging apps, and VPNs.
As it stands, the changes would compel service providers with at least 5,000 users to verify identities and decrypt communications that aren’t protected by end-to-end encryption.
The proposal has faced significant backlash. Decentralized VPN provider Nym encouraged Swiss citizens to reach out to their elected representatives and oppose the initiative. The company stated:
At a time when the Swiss are celebrating the success of leading privacy-preserving companies such as Proton and Threema, when the army itself has chosen to use Threema, and when other promising players, such as Nym, are emerging in the field of privacy-friendly technologies and the protection of people’s digital integrity, this ordinance by the Federal Council is destroying an entire sector.
In July, the privacy-oriented tech company Proton announced it had halted investments in Switzerland amid uncertainty surrounding the proposal, redirecting $100 million towards data centers in Germany and Norway.
On Dec. 10, Switzerland’s Council of States acted to limit the proposed expansion of telecommunications surveillance, tacitly supporting a motion that urges the Federal Council to re-evaluate the reform.
In the United Kingdom, the Concordium blockchain launched a mobile application in August allowing users to verify they are over 18 using zero-knowledge proofs, without disclosing their identity. The release coincided with the UK implementing mandatory online age verification rules for adult content.
In the United States, Google announced it would expand government-issued digital IDs in Google Wallet across several US states in April, facilitating mobile ID usage at DMVs and TSA checkpoints.
The update also incorporated zero-knowledge proofs for age verification, underscoring that the technology has transcended crypto-native projects, gaining traction among Big Tech platforms as part of mainstream digital identity systems.
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