Bitcoin could soon get Zcash-style 'shielded' privacy without changing its rules
Researchers have mapped out private bitcoin-denominated transfers that run alongside Bitcoin, but the system still lacks a finished way to lock up real BTC and release it again.
A group of researchers floated a way to make bitcoin payments more private without changing the network’s rules, as privacy-focused cryptocurrencies led by Zcash attract renewed investor interest.
The Shielded Bitcoin paper, published on Thursday by Clara Shikhelman, Mikhail Komarov and Aleksei Moskvin of cryptography firm [alloc] init, borrows the encrypted payment design used by Zcash.
Inside the proposed system, bitcoin-denominated value would be held in encrypted records called notes. Spending one would publish a marker showing it had been used, along with a mathematical proof that the sender owned the funds and had not created new ones. The amount, sender and recipient would remain hidden.
The connection to Zcash goes back further than Thursday’s paper. Zerocoin was proposed as a privacy extension to Bitcoin in 2013, the subsequent Zerocash research developed into Zcash, which launched as a separate cryptocurrency in 2016.