Has anyone built a fully private L2/sidechain on top of BTC ? Would anyone here be interested in building this with me using Python ?
This could be done with multi-party computing(MOC) and Shamir secret sharing .
Shamir secret sharing could be used to store Bitcoin private keys and MPC can be used to sign transactions in a fully decentralized private way.
A protocol like this would:
- Keep all balances and transactions completely private and encrypted.
- Support fully private smart contracts where no party knows the variables inside of smart contract
I am able to build this but wonder if there is any appetite for this from the community. MPC has been around for a few years now and nobody really seems to be interested in this.
You'll probably want to look into something with a standardized DKG mechanism instead of plain Shamir's (or rolling your own), like FROST.
I will check out DKG . I am not super invested in Shamir . I just like the mathematical simplicity of it.
I also know there is a lot of discussion on quantum safety of various cryptography algorithms. Will have to check out how susceptible to quantum attack Shamir secret sharing is.
Since deletion is hard, the DKG fixes the problem of plain Shamir's needing the whole key before partition, making key composition secure. There are some stackers that have experience with how it's solved for FROST (which is based on Shamir's) - @Rsync25 / @BlueSlime, perhaps @dr_orlovsky (?) come to mind.
Reinventing that wheel is costly
This library has all the required MPC primitives for this potential project
https://github.com/lschoe/mpyc
I’d be interested in contributing in order to get some development experience. I only started working my way through backend development courses (mainly python but also some Bitcoin-specific courses) last year but come from a quantitative field where I wrote ugly but reproducible code for academic papers. Any suggestions how to transition into Bitcoin development?
Hi.
My telegram is @snow88488 . Please DM me. I would love to work with anyone who is interested. I would like the project to be public .
We may even be able to find some VC money.
In terms to transitioning to Bitcoin development - I think the best way to learn is to come up with an idea for a project and build it.
Ugly or nice code does not matter what matters is the willingness to learn
Bitcoin is not hard but mainstream media like to make it look like a rocket science.
I am very interested in this, most especially if it could somehow be integrated or developed into the existing Lightning Network but am unable to fund it for the time being. Hopefully by end of this year. I have not taken the time yet to study ecash or fedimint but Im curious as to how your ambitions would improve the solutions posed by those protocols already.
Feel free to DM me on telegram @snow88488 or share your username
Thanks for your reply. Yes I would love to integrate this with LND .
Integrating with onchain is definitely easier though. As secp256k1 elliptic curve signature can be accomplished using MPC primitives operating on top of Shamir shares
How would this compare to client side validation solutions like rgb?
I like both RGB and taproot assets- in fact I run a web wallet for RGB https://mainnet.tiramisuwallet.con
RGB does not support smart contracts as of now. In other words right now it supports Altcoins and NFTs.
This would be a full-on decentralized private Multi-Party computing based side chain with smart contracts.
Python code running as MPC operating on Shamir secret shares.
This could be used to run crypto mixers or other smart contracts
To my best knowledge nothing like this exists right now.
Oh i was under impression that rgb had smart contract support but i guess reality vs docs/presentations differ
It is an interesting idea and certainly one that taps into a real gap in the current Bitcoin ecosystem. While there have been attempts at privacy solutions for Bitcoin most focus on transaction-level obfuscation such as CoinJoin or privacy-focused overlay networks. What you are proposing with a fully private L2 or sidechain using MPC and Shamir secret sharing is more ambitious because it would create an environment where every layer of asset management and smart contract execution is encrypted and inaccessible to outside observation. That is fundamentally different from what exists now.
If implemented correctly the technical challenge here is not just in getting MPC to work for decentralized signing but ensuring that consensus and state verification can occur without leaking any critical information. That means designing a system where validators can confirm a transaction or a contract outcome without learning the underlying inputs. Achieving this requires strong cryptographic rigor and a careful consideration of how private state interacts with public consensus.
One potential point of friction is that Bitcoin’s base layer was not designed for this level of abstraction and privacy. You would likely need a specialized sidechain architecture that has its own consensus rules while anchoring to Bitcoin for final settlement. That way BTC is the ultimate source of truth but the sidechain handles the private computation and contract logic.
This is technically feasible and there are enough cryptographic tools available today to make it happen. The real question is whether there will be enough developer and community interest to sustain the project. The market tends to reward privacy innovations in spurts and only when they are user-friendly and integrated into existing workflows. If you can make this work in a way that feels seamless to users it could be a powerful addition to Bitcoin’s utility and resilience.
Yes it would definitely be a heavier lift in terms of ensuring all MPC primitives are applied correctly. In some cases checks for hostile / dishonest actors would have to be added.
Also yea this would definitely require a sidechain / L2.
My experience with crypto is that the community rewards new coins that are easy to invest into. Not too many people even understand the fundamentals of Bitcoin.