International Association
for Cryptologic Research

Bitcoin secures over a trillion dollars in assets but remains largely absent from decentralized finance (DeFi) due to its restrictive scripting language. The emergence of BitVM, which enables verification of arbitrary off-chain computations via on-chain fraud proofs, opens the door to expressive Bitcoin-native applications without altering consensus rules. A key challenge for smart contracts executed on a public blockchain, however, is the privacy of data: for instance, bid privacy is crucial in auctions and transaction privacy is leveraged in MEV-mitigation techniques such as proposer-builder separation. While different solutions have been recently proposed for Ethereum, these are not applicable to Bitcoin. In this work, we present BitPriv, the first Bitcoin-compatible protocol to condition payments based on the outcome of a secure two-party computation (2PC). The key idea is to let parties lock collateral on-chain and to evaluate a garbled circuit off-chain: a cut-and-choose mechanism deters misbehavior and any violation can be proven and punished on-chain via BitVM. This design achieves security against rational adversaries, ensuring that deviation is irrational under financial penalties. We showcase the new class of applications enabled by BitPriv as well as evaluate its performance through a privacy-preserving double-blind marketplace in Bitcoin. In the optimistic case, settlement requires only two transactions and under \$3 in fees; disputes are more expensive (≈\$507) with their cost tied to the specific BitVM implementation, but their mere feasibility acts as a strong deterrent. BitPriv provides a blueprint for building enforceable, privacy-preserving DeFi primitives on Bitcoin without trusted hardware, sidechains, or protocol changes.