Private Bitcoin Transfers Proposed Without Altering Consensus Rules

Researchers at init have proposed a design for private Bitcoin transfers that would hide amounts, senders, and receivers without altering Bitcoin's consensus rules.

Their 56-page paper, titled 'Shielded Bitcoin', was released on September 24. It borrows from Zcash, holding value in encrypted records called notes, which are spent using public markers called nullifiers.

Each spend also carries a zero-knowledge proof that the transfer is valid without revealing its contents. The design relies on separate indexer software to verify these proofs and rebuild the private ledger.