Alloc Init Proposes Shielded Bitcoin Transactions Without Soft Fork

A group of researchers from Alloc Init have proposed a system for Shielded Bitcoin transactions without requiring a soft fork. The system uses encrypted notes and zero-knowledge proofs, allowing users to verify that a transaction is valid without revealing any sensitive information.

According to the proposal, external indexers would be responsible for verifying the zero-knowledge proofs and preventing double spending. Miners would not enforce the privacy protocol, leaving it up to the indexers to ensure the integrity of the transactions.

The authors note that adoption alone is not enough to guarantee a large anonymity set, highlighting the importance of widespread implementation and usage of the system.