Researchers Propose Zcash-Style Private Bitcoin Transfers Without Consensus Changes

Bitcoin could have Zcash-style private transfers without making any changes to the network’s consensus layer.

According to researchers led by Clara Shikheman, the private transfers can be achieved by leveraging the mixer logic used by Tornado Cash.

In other words, the proposal could allow one to plug BTC into a private encrypted note. It can then be transferred around using ZK (zero-knowledge) proofs, which shield the sender, receiver, and the amount being moved. At the exit point, you’re assigned a new address.

Commenting on the update, Clara Shikheman, head of Bitcoin-focused research firm Alloc Init, said,

No soft forks, no bridges, no operators, just Bitcoin. We’ve put a lot of work into thinking carefully about the security of Shielded Bitcoin and about what information the protocol reveals. And this is just the beginning!

For his part, Eli Ben-Sasson, founder of Starknet and one of the pioneers of ZK proofs, hailed the move. He noted,

I love this direction; our original intent with Zerocash paper (the whitepaper preceding Zcash) was to bring privacy to Bitcoin. I would love to see our vision of privacy and scalability via ZK materialize on Bitcoin L1.

Will it resolve Bitcoin’s privacy problem?