Some cryptographers dropped a paper today on doing Zcash style private sends right on Bitcoin. Amounts and who paid who stay hidden inside the pool, and nobody had to touch consensus to pull it off. T...
https://www.allocinit.xyz/uploads/shielded-bitcoin.pdf
The paper does not specify the *peg-in / peg-out* process. That's pretty important since we saw what happened with liquid.
"The peg-in and peg-out constructions are not specified here. As discussed in Section 20.4, the expected direction for Shielded Bitcoin is to use PIPE-based boundary transitions: ordinary Bitcoin liquidity is committed on L1, while entry, exit, and unlock rules are represented as Bitcoin-anchored metaprotocol transitions rather than as changes to Bitcoin consensus. Federated or multisignature custody, BitVM-style bridges, and future covenant- or vault-based constructions remain useful comparison points, but the intended architecture is PIPE-based. The trust, liveness, censorship-resistance, and privacy properties of entry and exit therefore belong to the boundary protocol, not to the transfer proof."
And then... the money shot :
"*Opt-in KYC* and Certified-Recipient Lineage
A future deployment could let wallets attach an encrypted lineage attestation to an output created for
a Trust-Authority-certified payment address. Without revealing earlier addresses or the transfer graph,
the proof would show that each lineage root came from an authenticated peg-in whose actual Bitcoin
inputs were approved, that every later preserving transfer consumed only notes carrying the same claim, and that each claim-preserving transfer output used the certified PaymentAddress. An institution could verify this evidence locally and bind it to a fresh operation challenge. Bitcoin consensus and base replay would not interpret it, and notes without the evidence would remain valid. This direction is discussed further in Appendix D."
I love when cryptographers and cypherpunks talk about "opt-in" KYC. That makes me all fuzzy inside. /sarc
They have to work really hard to recycle that zcash stuff. https://kosher.cash/
The paper does not specify the *peg-in / peg-out* process. That's pretty important since we saw what happened with liquid.
"The peg-in and peg-out constructions are not specified here. As discussed in Section 20.4, the expected direction for Shielded Bitcoin is to use PIPE-based boundary transitions: ordinary Bitcoin liquidity is committed on L1, while entry, exit, and unlock rules are represented as Bitcoin-anchored metaprotocol transitions rather than as changes to Bitcoin consensus. Federated or multisignature custody, BitVM-style bridges, and future covenant- or vault-based constructions remain useful comparison points, but the intended architecture is PIPE-based. The trust, liveness, censorship-resistance, and privacy properties of entry and exit therefore belong to the boundary protocol, not to the transfer proof."
And then... the money shot :
"*Opt-in KYC* and Certified-Recipient Lineage
A future deployment could let wallets attach an encrypted lineage attestation to an output created for
a Trust-Authority-certified payment address. Without revealing earlier addresses or the transfer graph,
the proof would show that each lineage root came from an authenticated peg-in whose actual Bitcoin
inputs were approved, that every later preserving transfer consumed only notes carrying the same claim, and that each claim-preserving transfer output used the certified PaymentAddress. An institution could verify this evidence locally and bind it to a fresh operation challenge. Bitcoin consensus and base replay would not interpret it, and notes without the evidence would remain valid. This direction is discussed further in Appendix D."
I love when cryptographers and cypherpunks talk about "opt-in" KYC. That makes me all fuzzy inside. /sarc
They have to work really hard to recycle that zcash stuff. https://kosher.cash/
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