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

Cryptography research firm [alloc] init has published a 56-page proposal for Shielded Bitcoin, a Layer 1 metaprotocol introducing Zcash-style private transactions to Bitcoin without consensus changes or soft forks. The system utilizes zero-knowledge proofs, encrypted notes, and nullifiers, using Bitcoin as an ordering layer while off-chain indexers verify state. A standard two-input, two-output shielded transaction weighs roughly 625 to 700 virtual bytes, incurring about four times standard miner fees. Operational entry and exit mechanisms relying on PIPEs v2 witness encryption remain unfinalized, alongside challenges including cold-start anonymity sets and storage requirements.