Alloc Init Unveils Shielded Bitcoin Proposal for Private Transactions Without Soft Forks

Researchers at cryptography lab Alloc Init have proposed 'Shielded Bitcoin,' a metaprotocol introducing Zcash-style private transactions directly to the Bitcoin base layer without requiring soft forks or consensus changes. Unveiled by Clara Shikhelman, Mikhail Komarov, and Aleksei Moskvin, the protocol uses Bitcoin as an ordering layer while off-chain indexers verify zero-knowledge proofs and nullifier sets. Shielded transactions require roughly 700 vbytes—about four times standard miner fees—while experimental witness encryption ciphertexts have been compressed from around 300 terabytes to eight terabytes. Community reactions remain mixed, citing unresolved peg-in mechanisms, an initial cold-start anonymity set, and quantum resistance concerns.