Prototype of Bitcoin Exchange with Private 'Dark Pools' Created

• The prototype's code has not yet been published or independently audited.
• Orders are matched directly between users using Nostr identities.

A developer identified as ian (@januszg_ on X) presented on July 21, 2026, a prototype of a Bitcoin (BTC) exchange designed to operate as a 'dark pool': a market where the amounts and addresses of participants remain hidden throughout the operation.

The goal is to move Bitcoin from one person to another without leaving a trace on the network and, at the same time, without either party (buyer and seller) having to blindly trust the other.

To achieve this, two components that operate in parallel are combined and connected via a hash. On the Bitcoin side, the prototype uses statechains—a technique that allows the reassignment of the spending key of a UTXO without the need for a transaction on the chain—and relies, according to the author, on the Latch protocol of Mercury Layer.

The seller locks their position within an order, and that order generates a unique hash, which serves as the thread connecting the entire exchange. That same hash is what comes into play on the other side of the system: the stablecoin network.

Meanwhile, the buyer deposits their stablecoins (or 'any other shitcoin,' in the author's own words) into a collateral contract within a zero-knowledge proof (zk) network, a cryptographic method that allows one party (the prover) to demonstrate to another (the verifier) that a statement is true without revealing any additional information about the statement itself.

This contract only releases the funds if someone reveals the key corresponding to the hash generated by the seller's order, or automatically returns them to the buyer if a specified time limit expires without that happening.

This is where the third element of the design comes in: a co-signer who does not participate in the negotiation or sign anything on their own initiative, but only acts when both parties indicate so.

Once the seller verifies that the stablecoins have been deposited in the contract, they authorize the co-signer to complete the transfer of Bitcoin; the buyer does the same from their side.

With both confirmations, the co-signer reassigns the spending key of the statechain to the buyer and deletes the copy they shared with the seller.

Only after this deletion is the key revealed that allows the seller to claim the stablecoins. That completes the swap.

This last step leaves a condition of trust that the author himself acknowledges: the buyer must trust that the co-signer indeed deleted their key once the operation is finished.

This entire exchange mechanism solves the problem of moving assets without a trace, but it still does not address how two people come to agree on a transaction. For that, the developer built on top a request for quotes (RFQ) protocol based on Nostr identities.

Each user creates an identity (npub) and publishes buy or sell orders showing only that identity and the order amount, without revealing their Bitcoin address or other personal data.

It is worth clarifying that, unlike the amounts and addresses, the user's npub is visible to the other participants in the order book: what the design hides is the Bitcoin address and personal information, not the pseudonymous identity on Nostr.

When someone finds an offer that suits them, they send an encrypted quote with the amount and exact price, which can only be read by the counterparty of that specific transaction.

The result, according to the author's description, is that on the Bitcoin side there is no transaction on the chain, while on the zk network side, the only thing visible are the hashes of the inputs and outputs, without even being able to determine which asset was exchanged.

Ian himself described the design, in his personal assessment, as extremely privacy-preserving and indicated that he will work on more optimized versions of the protocol and that he plans to publish the code in the future, without specifying a date.

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