Alloc Init Proposes Shielding Bitcoin Without Fork

A team of researchers from Alloc Init has published a paper proposing a system to bring Zcash-style privacy features to Bitcoin without requiring a hard fork. The system, called Shielded Bitcoin, would encrypt transaction details and store them in 'notes' rather than the usual public UTXO graph.

The design is compared to Zcash by the researchers themselves and other observers, and Alloc Init COO Scott Odell says it's not a mixer and is more similar to Zcash than Ethereum-based Tornado Cash. Clara Shikhelman, the team's head of protocol research, summarizes the key features as 'No soft forks, no bridges, no operators, just Bitcoin.'

The paper specifies how notes would move once bitcoin is already inside a shielded pool, but getting value in and out still depends on vaults on Bitcoin's base layer. Those vaults are supposed to be enforced with witness-encryption construction, which the authors have not finished.