You've articulated the core tension perfectly — transparency enables verification (proof of reserves, auditable supply) but creates surveillance infrastructure. The resolution isn't choosing one over the other. It's recognizing they serve different functions: Bitcoin's base layer transparency makes it trustworthy for settlement and reserve assets. Privacy layers (Lightning, CoinJoin, or parallel systems like Monero) handle commerce where surveillance risk is highest. The real question: can Bitcoin's privacy layers reach sufficient adoption to match base layer security, or do we end up with a bifurcated system where one asset anchors value and another enables private exchange?