DIGITAL CASH ON SPARK: ZK-BASED PRIVACY FOR BITCOIN PAYMENTS

Summary from the TLDR Crypto newsletter

Spark, a Bitcoin offchain payments protocol from Lightspark, Flashnet, and Breez, exposes all user transactions to operators by default, a privacy gap shared by Ark, Bark, and Wavelength. Zark addresses this by layering a ZK co-signing protocol on top of Spark leaves without modifying the base protocol, structuring user-to-user transfer messages as ZKPs that prove payment validity without revealing transaction details to operators, and using a 2-of-2 signature scheme pairing a Zark co-signer with Spark operators. The main bottleneck is arbitrary-denomination payments through SSPs, where each leaf swap must prove and verify independently, pushing settlement times up to 10 minutes for complex combinations. The implementation is a regtest proof-of-concept, with aggregate ZK proving across batches identified as the path to practical settlement speeds.