# New Proposal Aims to Bring Zcash-Style Privacy to Bitcoin Without Forking Researchers propose encrypted notes for private Bitcoin transactions - **Source:** [Gizmodo](https://brifing.si/source/63382431-cef0-4c41-883e-2f88dc21351e) - **Published:** 2026-09-27 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/e5667471-ff95-4bb1-9f38-e1f568459052 ## Privacy proposal for Bitcoin Alloc Init researchers published a paper proposing Shielded Bitcoin, which would enable Zcash-style private transfers on Bitcoin without requiring a network fork. The system would encrypt transaction details like recipients and amounts in private notes rather than storing them publicly in the UTXO graph. This approach differs from mixers like Tornado Cash, with the team emphasizing its architectural similarity to Zcash but designed specifically for Bitcoin's base layer. ## Technical implementation The proposal uses witness encryption for vaults that manage value movement in and out of shielded pools, though this construction remains unfinished. Unlike Zcash's implementation, Shielded Bitcoin aims for non-custodial use on Bitcoin's base layer without requiring soft forks, bridges, or operators. The design faces challenges with bridging to Bitcoin's main chain, a persistent issue since the original sidechains paper in 2014. ## Historical context Privacy enhancements for Bitcoin have been proposed since 2013's Zerocoin and 2014's Zerocash, but Bitcoin never adopted these methods. Zcash launched independently in 2016 and has seen significant price volatility, currently trading around $1,540. While some view Zcash as 'private bitcoin,' critics argue its privacy features aren't widely used as intended, with many treating it as a speculative asset rather than a privacy tool. ## Market alternatives Monero remains the dominant privacy coin, accepted by 48% of 2025's darknet markets according to TRM Labs. Recent incidents like the Revolut data leak saw hackers demanding payment in Monero rather than Bitcoin or Zcash. Bitcoin's resistance to privacy features stems partly from auditability concerns - shielded pools make verifying the money supply impossible in the way transparent UTXOs allow. ## Security concerns Recent vulnerabilities in Zcash's Orchard pool and Blockstream's Liquid sidechain highlight risks in private transaction systems. The Zcash bug could have created untraceable ZEC, while Liquid's consensus bug allowed minting unbacked L-BTC worth $320 million. Shielded Bitcoin would face similar risks around potential inflation and bridge reliability, compounded by its required trusted setup ceremony. ## Competing approaches Other privacy solutions like Glass Coins (formerly Shielded CSV) take different technical approaches, keeping proof work off-chain. Both designs still require reliable bridges, with witness encryption for Shielded Bitcoin's vaults remaining unsolved. BitVM inventor Robin Linus called the underlying cryptography 'highly experimental' with unproven security assumptions requiring years of scrutiny. ## Regulatory landscape The legal environment around privacy tools remains uncertain, highlighted by recent convictions of Samourai Wallet founders and Tornado Cash developer Roman Storm. The stalled CLARITY Act leaves developers without clear legal protections. Meanwhile, projects like Citrea are developing Ethereum-compatible Bitcoin layer-two solutions with built-in privacy features. ## Future developments Alloc Init acknowledges the experimental nature of their witness encryption approach, with an updated paper expected later this year. The proposal joins a growing ecosystem of Bitcoin privacy solutions including Lightning Network and Chaumian ecash systems. However, widespread adoption faces technical, security, and regulatory hurdles that may take years to resolve. ## Sources covering this story - https://gizmodo.com/a-new-paper-claims-zcash-style-privacy-for-bitcoin-no-fork-required-2000817803 — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._