I want to send ADA to a new, unused address from an exchange. However, I discovered that the exchange can see how much ADA I have by searching the address on cexplorer.io. Isn’t this a privacy issue?
Yes, with basically all Cardano wallets, everyone who has an address of your wallet can learn the whole history of it (due to the included stake part).
You can use separate accounts/wallets to interact with exchanges or dApps if you don’t want them to know an address of your main wallet. But then the interactions with your main wallet still probably give away a lot if people are really looking for it.
(That is similar to transaction analyses on Bitcoin which doesn’t have staking, so the addresses themselves don’t give away that much information, but it was still shown that addresses belonging to the same wallet/person could be correlated pretty easily. https://www.schneier.com/blog/archives/2022/04/de-anonymizing-bitcoin.html)
Mainstream crypto currencies just aren’t very private. Period.
You’d have to go for ones that specifically try to target privacy, do your own research if they really achieve what they promise, and weigh that against their value stability, acceptance, maybe even persecution in certain jurisdictions.
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Brilliant response.