Shielded Bitcoin: Alloc Init Proposes Zcash-Style Privacy for Bitcoin Without Network Change
Alloc Init, a cryptography research shop, has published a paper proposing a way to add Zcash-style private transfers to Bitcoin without requiring a consensus-level change to the network. The proposal, called Shielded Bitcoin, uses encrypted notes instead of public UTXO graph to store recipient information and amounts.
The researchers behind the paper compare it to Zcash, but emphasize that it's designed for non-custodial use on Bitcoin's base layer. Scott Odell, COO at Alloc Init, said that Shielded Bitcoin 'is not a mixer' and is more similar to Zcash than Ethereum-based Tornado Cash.
The design of Shielded Bitcoin involves using vaults on Bitcoin's base layer, which are supposed to be enforced with witness-encryption construction. However, the authors have yet to finish this part of the proposal.
David Seroy of Alpen Labs noted that both Shielded Bitcoin and Glass Coins (previously known as Shielded CSV) still need reliable onramps and offramps, and that the witness encryption for those vaults is still unsolved. Robin Linus, co-author of Shielded CSV, said that the underlying cryptography 'is still highly experimental, and its security assumptions are far from established.'