Every once in a while privacy issues come to the forefront of the news cycle.

It happened again this week when news broke that senior government officials, including Vice President JD Vance, National Security Advisor Mike Waltz, and Secretary of Defense Pete Hegseth

Every once in a while privacy issues come to the forefront of the news cycle. It happened again this week when news broke that senior government officials, including Vice President JD Vance, National Security Advisor Mike Waltz, and Secretary of Defense Pete Hegseth, along with about a dozen others including one national journalist, were included in a private chat on the encrypted Signal messaging application that was used to share detailed attack plans against a terrorist group in Yemen.

Questions are swirling around Washington, D.C. trying to figure out why such sensitive data was shared on a free commercial application. After all, the government has secure rooms and tools to discuss and disseminate such information (Editor’s note: I served as a senior intelligence analyst for the Defense Intelligence Agency from 2008-2013 and held a Top Secret clearance for the duration of my employment).

The fallout from this scandal is far from over, but briefly stepping outside the palace intrigue, it has particular importance for crypto as well. After all, there is a lot of crossover between crypto enthusiasts and privacy advocates, but it never seems like privacy grows at a similar pace to crypto acceptance.

And unfortunately, the answer for why privacy in crypto shows limited adoption is the same reason why detailed military plans were shared over a commercial app. It was just easier. “People prefer convenience over security and privacy,” said Harry Halpin, CEO at Nym Technologies (NYSE:NYM), a privacy-focused blockchain company that just released a virtual private network (VPN), in an interview with Unchained. “This includes government officials and corporate executives, including people with access to the top level secrets.”

Vitalik Buterin, founder of the $227 billion Ethereum blockchain, put things more succinctly in a July 2024 interview with Forbes when talking about why privacy tech has struggled to take off in crypto. “The bulk of the financial value of many of these blockchains comes from average people that want to trade cats and dogs,” said Buterin. “Privacy, in general, is definitely the sort of thing that never really succeeds.”

Privacy Isn’t Paying

Perhaps the best representation of privacy tech’s struggle to take off in crypto comes back to Signal itself. It is a widely used application in government circles (clearly), but its funding relies on donations. The project itself was originally funded by government grants from groups like DARPA, the Defense Advanced Research Projects Agency, which helped first create the internet. It also received funding from the Open Technology Fund, which is affiliated with Voice of America and had its funding briefly cut off by the Trump administration before reversing course on Thursday after being sued by the group.

“The most absurd thing is that it seems like everyone in the Trump administration is using Signal, but they literally cut Signal’s primary historical funding sources,” said Halpin.

In crypto the problem is even more challenging because there are no platforms with usage commensurate with something like Signal, let alone achieving sustainable economics.

Take Nym for example. The company went against the grain by creating a tool that has nothing to do with financial transactions, a VPN. This is a potentially huge market, worth over $50 billion annually with more than a billion users across commercial and retail applications. However, right now Nym’s VPN, which was released just weeks ago, has about 6,000 users and only 1,000 paying customers forking out $6-$12 a month, which Halpin says is actually high for a VPN subscription. Nym’s token (NYM), which at $.05 is down 99% from its all-time high in April 2022, is languishing despite the launch of the first product.