The drive to incorporate privacy into public blockchains has reached Bitcoin, thanks to VerifiedX’s new layer that secures transactions while ensuring they remain auditable.
Named Prism, this system allows for encrypted balances and addresses, as well as selective disclosure, enabling private transactions with the option to prove compliance when necessary. This information was shared via email with CoinDesk on Thursday.
This development aligns with a wider industry trend. Earlier in the week, the XRP Ledger introduced zero-knowledge proof (ZKP) capabilities targeting institutional users who wish to transact without revealing sensitive data on public ledgers.
This effort underscores a significant barrier to institutional adoption: transparency. Although public blockchains offer trust through openness, they also reveal balances, counterparties, and transaction flows—elements typically avoided in traditional finance (TradFi).
In the context of Bitcoin, this advancement is particularly impactful. As the largest digital asset—sometimes valued above the entire crypto market combined—Bitcoin serves as a primary entry point for institutional capital. Thus, enhancements to its privacy and usability could significantly influence the broader sector more than similar improvements on smaller networks.
Instead of creating an independent privacy chain, VerifiedX applies this model directly to Bitcoin-linked activities. Assets can transition between transparent and shielded states, with ‘viewing keys’ allowing selective access for auditors or regulators.
In addition to payments, the system supports various programmable use cases like private lending, trading, and automated transactions, including agent-driven finance, all without revealing positions or intentions on-chain.