Researchers Unveil ZCash-Style Private Transfers for Bitcoin
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The design uses encrypted 'notes' to hold value, zero-knowledge proofs to verify transactions, and a public marker called a nullifier to prevent double spending. Unlike Shielded CSV, which requires coin owners to keep their own transaction data, Shielded Bitcoin publishes transfers as data on the Bitcoin blockchain.
Timing, fees, and input/output numbers remain public, but the protocol preserves the privacy of who paid whom and how much. The current implementation uses the Groth16 proof system, whose security depends on a trusted setup ceremony.