Key highlights:
- Researchers proposed Shielded Bitcoin, a system for private Bitcoin transactions
- The system uses encrypted notes, public nullifiers, and zero-knowledge proofs, techniques borrowed from Zcash
- Transaction amounts, senders, and recipients could become hidden
Researchers have put forward a method for adding privacy in transactions in
A major piece of the system is still unfinished. The researchers have not worked out exactly how regular, visible BTC would move into and out of the shielded system.
Developers react with praise and criticism
Reaction to the proposal from other developers has been mixed. Developer Vadim Zavodil pushed back on the plan, saying that Zcash has a definite edge over BTC thanks to its years of development.
He pointed out that a new privacy system like Shielded Bitcoin will start with a small number of users, which in turn reduces its initial ability to provide users with privacy.
The Shielded Bitcoin researchers had mentioned this problem in a different post. They argued that large amounts of money deposited into this system would not ensure privacy for all the users.
They added that external parties could guess who transacts with whom if only a small number of individuals conduct most transactions or some wallets have distinctive behaviors.
Pierre-Luc Dallaire-Demers, founder of the post-quantum cryptography company Pauli Group, raised a different concern. He called the proposal interesting but noted it is “not quantum resistant at all.” This means it could theoretically be vulnerable to future quantum computers.
In all of the criticism, there was a positive tone. Eli Ben-Sasson, co-author of the original Zerocash research paper and CEO of StarkWare, said he hadn’t yet read the full Shielded Bitcoin paper, but said he would like to see this kind of privacy and scalability.
Source:: Developers Propose Zcash-Style Privacy for Bitcoin Without Requiring a Fork