Researchers at the firm [[alloc] init] have introduced a technical design for private Bitcoin transactions. The 56-page paper, published on September 24, 2026, by Clara Shikhelman, Mikhail Komarov, and Aleksei Moskvin, outlines a protocol enabling Zcash-style privacy directly on the Bitcoin layer one network.
The proposed system, termed Shielded Bitcoin, utilizes encrypted notes and zero-knowledge proofs to obscure sender, recipient, and transaction amounts. While the Bitcoin blockchain records the data, separate indexer software verifies the proofs and reconstructs the state. The design relies on the Groth16 proof system and the OP_RETURN capacity introduced in Bitcoin Core v30.
The authors note that transaction timing, fees, and input-output counts remain public. The current design focuses on internal transfers, while mechanisms for moving BTC in and out of the system are addressed in separate research regarding Bitcoin PIPEs v2. An optional compliance layer is also proposed, allowing a trust authority to certify deposits for institutional verification.
The paper distinguishes this approach from the 2025 Shielded CSV proposal, which required users to manage their own transaction data. The researchers emphasize that their solution aims to enhance privacy without requiring fundamental changes to the Bitcoin protocol, though it depends on node operators maintaining support for larger OP_RETURN outputs.
