Wire flash
Alloc Init unveils Shielded Bitcoin proposal to add Zcash-like privacy to BTC
Editorial responsibility
- No named human review is recorded for this page.
- Source reporting is collected, normalized, translated or condensed automatically when needed.
- Automatically published source-backed update
Encryption research team Alloc Init has officially launched the 'Shielded Bitcoin' proposal, aiming to provide Zcash-like privacy transfer functionality for the Bitcoin network without triggering a soft fork. The scheme, released Thursday by Clara Shikhelman, Mikhail Komarov, and Alexei Moskvin, uses Bitcoin as a neutral publishing and ordering layer, with specialized indexer software verifying zero-knowledge proofs and preventing double-spending. It draws heavily on Zcash's logic, employing encrypted notes, public nullification mechanisms, and zero-knowledge proofs. However, the proposal faces significant criticism. Developer Vadim Zavodyr noted on X that privacy effectiveness depends on user base size, warning that a new system may initially have an anonymity set of one. The researchers themselves acknowledged that large deposits do not automatically ensure anonymity. Pauli Group founder Pierre-Luc Dalair-Demers sharply criticized the scheme's lack of quantum attack resistance. In contrast, Zerocash co-founder and StarkWare CEO Eli Ben-Sasson expressed support, stating he looks forward to the vision of privacy and scalability via zero-knowledge proofs becoming reality.
Source report
According to Woofun AI, the crypto research team Alloc Init has officially launched a "Shielded Bitcoin" proposal designed to enable privacy-preserving transactions similar to Zcash on the Bitcoin network—without triggering a soft fork. The initiative seeks to restructure the transaction privacy layer through technical means while preserving the underlying consensus mechanism of the base protocol. It offers Bitcoin users, long constrained by the blockchain's transparent ledger, a new path toward balancing compliance and privacy. The proposal marks the latest attempt to apply zero-knowledge proof technology in a sidechain-like context on a major public blockchain.
Technical Blueprint Released
Clara Shikhelman, Mikhail Komarov, and Alexei Moskvin jointly released the technical blueprint on Thursday. The core architecture departs from the traditional approach of having miners execute privacy protocols. Instead, it treats Bitcoin as a neutral publication and ordering layer. Under this framework, specialized indexer software assumes key responsibilities: verifying zero-knowledge proofs, confirming that funds have not been double-spent, and reconstructing the privacy system's state.
Design Inspired by Zcash
Data compiled by Woofun AI shows that the design draws heavily from Zcash's logic, employing encrypted notes, a public nullification mechanism to mark note consumption, and zero-knowledge proofs to ensure transaction validity. Notably, "Shielded Bitcoin" does not create an independent blockchain or consensus mechanism but relies entirely on existing infrastructure for state synchronization and verification.
Privacy Concerns Over User Base Size
However, the effectiveness of privacy protection is closely tied to user base size—a structural weakness that has drawn sharp scrutiny from industry experts. Developer Vadim Zavodir noted on X that privacy depends on the size of the user group. Zcash took years to build an effective anonymity set, while a new system starting from scratch could initially face a "one-person anonymity set" dilemma. The researchers also acknowledged in their accompanying paper that large deposits do not automatically translate into high anonymity. If a small number of users dominate encrypted note creation, or if certain wallets exhibit unusual behavioral patterns, observers could still trace transaction links through on-chain analysis.
Security Criticism and Support
On the security front, Pierre-Luc Dalais-Demers, founder of Pauli Group, offered sharp criticism, arguing that the proposal is entirely vulnerable to quantum attacks. While he is exploring an alternative version based on post-quantum signature schemes, the current architecture remains highly fragile in the face of quantum computing threats.
In contrast, Eli Ben-Sasson, co-founder of Zerocash and CEO of StarkWare, expressed support. He noted that the original Zerocash paper was intended to bring privacy to Bitcoin. Although he has not yet read the new paper in detail, he looks forward to seeing the vision of achieving privacy and scalability through zero-knowledge proofs become a reality.
Source
智通财经网Neutral / independent