BitPriv: A Privacy-Preserving Protocol for DeFi Applications on Bitcoin

Ioannis Alexopoulos; Zeta Avarikioti; Paul Gerhart; Matteo Maffei; Dominique Schröder

Paper 2025/1575 Original: eprint.iacr.org/2025/1575 ↗

BitPriv: A Privacy-Preserving Protocol for DeFi Applications on Bitcoin

Ioannis Alexopoulos

Zeta Avarikioti

Paul Gerhart

Matteo Maffei

Dominique Schröder

Abstract

Bitcoin secures over a trillion dollars in assets, yet its scripting language limits expressive decentralized-finance applications. BitVM enables arbitrary off-chain computation to be enforced through Bitcoin fraud proofs, but it does not provide privacy for inputs such as bids, quotes, and reserve prices. We present BitPriv, to our knowledge the first protocol that conditions payments on the outcome of an arbitrary secure two-party computation over private inputs on unmodified Bitcoin. Its core primitive, the Garbled Hashed Timelock Contract (GHTLC), binds Bitcoin payments to garbled-circuit output labels. Parties evaluate the circuit off-chain, while cut-and-choose detects malformed garbling and BitVM punishes detected violations. Under application-specific bounds, collateral can make deviations unprofitable for rational adversaries. We instantiate BitPriv in BitMarket, a Bitcoin-native sealed-bid auction, and BitBridge, an intent-based cross-chain bridge. Inputs remain private until the protocol execution fixes the outcome. Optimistic settlement costs less than \$3 in both applications. Depending on the backend, BitMarket disputes cost \$47–\$312 and BitBridge disputes cost \$47–\$657. BitPriv provides a blueprint for enforceable, privacy-preserving DeFi primitives on Bitcoin without trusted hardware, sidechains, or consensus changes.

Metadata

Available format(s): PDF
Category: Applications
Publication info: Preprint.
History: 2026-09-24: last updated; 2025-09-02: published
Short URL: https://ia.cr/2025/1575
License: https://creativecommons.org/licenses/by/4.0/

BibTeX

@misc{cryptoeprint:2025/1575,
      author = {Ioannis Alexopoulos and Zeta Avarikioti and Paul Gerhart and Matteo Maffei and Dominique Schröder},
      title = {BitPriv: A Privacy-Preserving Protocol for DeFi Applications on Bitcoin},
      howpublished = {Cryptology {ePrint} Archive, Paper 2025/1575},
      year = {2025},
      url = {https://eprint.iacr.org/2025/1575}
}