Bitcoin privacy is back in focus after researchers published a proposal designed to bring Zcash-style shielded transfers to Bitcoin without changing Bitcoin’s consensus rules.
The proposal, called Shielded Bitcoin, was published on September 24 by researchers Clara Shikhelman, Mikhail Komarov and Aleksei Moskvin of [alloc] init. It describes a metaprotocol that would use encrypted notes, public nullifiers and zero-knowledge proofs to hide the sender, recipient and amount of shielded transfers. Bitcoin would mainly act as a layer for publishing and ordering the encrypted data, while separate indexers would verify the Shielded Bitcoin rules.
Eli Ben-Sasson Welcomes the Direction
Zcash co-founder and StarkWare co-founder Eli Ben-Sasson responded positively to the broader idea.
Ben-Sasson said the original Zerocash vision was to bring privacy and scalability to Bitcoin through zero-knowledge technology. However, there is an important qualification: he also stated that he had not yet read the new Shielded Bitcoin paper.
That means his comments should not be interpreted as a technical endorsement of every part of the proposal. Instead, his support is for the broader goal of bringing ZK-based privacy to Bitcoin's base layer.
How Shielded Bitcoin Would Work
The proposal takes several concepts associated with Zcash and adapts them to Bitcoin.
Users would hold value in encrypted “notes.” When a transfer occurs, the transaction would include encrypted information together with a zero-knowledge proof demonstrating that the transaction follows the protocol's rules.
A nullifier would reveal that a note has been spent without revealing which private note was used. This allows the system to prevent double spending while keeping transaction details private.
Bitcoin itself would not validate these Shielded Bitcoin rules. Instead, independent indexers would read the published data, verify the proofs and reconstruct the shielded state.
There is also an important limitation at this stage: the current paper focuses on transfers within the shielded system. The researchers say the mechanism for moving Bitcoin into and out of the system will be detailed separately. The proposal is therefore research and protocol design, not a live Bitcoin privacy feature.
ZEC Has Already Passed Ben-Sasson's Earlier Target
The development comes as Zcash continues to trade at elevated levels.
Ben-Sasson previously said he expected ZEC to trade above $1,200 by September 25, 2026. On September 25, ZEC was trading around $1,549 in Investing.com's historical data, meaning that earlier price target has been exceeded.
Ben-Sasson has also continued to stand behind his $5,000 year-end ZEC target, according to today's reporting. Reaching $5,000 from roughly $1,550 would require an additional gain of more than 220%, so the target remains a personal price prediction rather than an established outcome.
Why the Story Matters
The significance of Shielded Bitcoin goes beyond ZEC's price.
Bitcoin's public transaction history can expose payment amounts, transaction links and counterparties. Shielded Bitcoin is attempting to address that limitation while leaving Bitcoin's existing consensus rules unchanged.
For Zcash, the development also highlights how ideas originally developed around privacy-focused cryptocurrency could influence the wider Bitcoin ecosystem.
But the proposal still needs to be evaluated technically, and important components such as the BTC entry and exit mechanism remain under development. For now, Shielded Bitcoin should be viewed as an ambitious research proposal rather than an upgrade already operating on Bitcoin.
The key takeaway: Ben-Sasson has welcomed the direction of Shielded Bitcoin, but he has not claimed to have technically reviewed the paper. Meanwhile, ZEC has already moved beyond his earlier $1,200 September target, while his $5,000 year-end prediction remains a personal forecast not a guarantee.#BitcoinSpotETFsNetInflow$191M $ZEC
