I saw the paper, and I only read the Abstract and Introduction before I gave up. It is a 56 page long paper, so I would have to be extremely less busy and highly motivated to read the whole thing.
There is no point when I already disagree with the core of what it's about.
They're proposing that everything about Bitcoin stays the same, but transactions are private. That goes against what Bitcoin is about. One of the genius of Bitcoin is that it promotes privacy, but the transactions are public. That is why I have never fallen for the narrative that criminals like drug cartels, terrorists, arms dealers, and human traffickers use Bitcoin a lot. I'm not saying they don't use it, but not at the rate that critics suggest. Criminals don't like their transactions being in the open for anyone to see and trace.

Making Bitcoin's transactions private would mean governments of various countries would have a reason to ban it and make it illegal. Bitcoin wouldn't have been this big if it were a private coin from the beginning.
Doing this would be playing right into the hands of Bitcoin critics.
Satoshi had the chance to make it a privacy coin if he wanted, but he didn't for a reason, and that reason is why Bitcoin is growing today.
Governments and regulatory bodies are still not on board with mixers, having shielded Bitcoin would only make their scepticism of Bitcoin bigger.

Mixers have been here, and has evolved, yes they could be hated by the government, but still we have mixers in crypto space so we can say that as much as they hated it, mixers are here to stay.

And there have been a lot of process too, now we have Mixers + Exchanges role into one. So you will get premium Bitcoin when you used them. So at least, you can remain private and you can protect your online presence from the prying eyes of the public.

I would only say that's true if bitcoin ever becomes "private by default" as you said. If optional, it would probably get the same treatment as it currently has (and the same treatement Zcash seem to have compared to XMR).

If anyone is wondering about is OP talking about, here is the full paper[1].

[1] https://x.com/allocinitxyz/status/2103124026214568209

I believe that the transparent ledger is one big reason bitcoin was able to survive the fierce early days attack. Bitcoin is not a privacy coin but we have developed means of managing it for close to 2 decades, I don't buy the idea of forking bitcoin now because of privacy concern. Mixers and instant exchanges have been doing their best here.

Bitcoin cannot be everything to us; we are in an ecosystem, where bitcoin falls short, xmr and others will cover up. Maybe developers should channel their energy towards quantum attack and not turning bitcoin to a privacy coin.

Depending on how much volume actually exist for privacy transactions I guess. If it's demanding and push the queue a lot, I'm not sure how the average joe will feel about it. Though I doubt the volume will be huge enough to push the average fee to $50 or more for next block confirmation. Other than that, I doubt existing coins will suddenly disappear since people are accustomed to it anyway (especially if they have faster block confirmations relative to Bitcoin). CMIIW.

I remember reading Satoshi Nakamoto's forum posts and getting the impression that he considered the issue of maintaining anonymity and privacy of Bitcoin transactions to be extremely important. However, at that time, this issue wasn't as pressing as it is now.🧖

Therefore, I strongly welcome the Shielded Bitcoin proposal. Yes, I know regulators won't like it... But who cares about regulators! The main thing is that Bitcoin remains as close to its original concept as possible, and for that, maintaining anonymity and privacy of transactions is crucial.

There's another important point... Transactions encrypted in this way imply high miner fees. Miners, as we know, ensure the security of the Bitcoin network. Therefore, it's crucial that they maintain a vested interest in maintaining the network. The Shielded Bitcoin proposal provides miners with significant revenue from fees for such transactions. This, in turn, means that fees could become a significant source of income for miners.  This is in line with Bitcoin's original development concept. We know that the block reward is constantly decreasing, and miners shouldn't be left without income. 🪙

The proposal it's experimental
It looks like its more like having a shitcoin on bitcoin with the belief that it grants more privacy
Yeah it has it's own validation.
And to be honest one of the reasons the government don't outrightly consider bitcoin evil
If that's the word
It's because it's a public ledger
Pseudonymous but a slip and data could link one to an account.

I could imagine a wallet type where the indexer runs only from the moment Shielded Transactions were introduced, and then updates the state of the notes downloading all blocks, like Feather on Monero. This would still be heavier than a regular SPV wallet but much shorter to sync to compared to a full node, and could solve the centralization issue.

The anonymity set is indeed potentially a problem, but it is likely from my understanding that the level of privacy could be higher than with CoinJoins and thus a potentially interesting alternative.

I have not understood the proposal completely, I admit, but I think it is definitely interesting -- I see some similarities to RGB tokens, where rules and transactions are separated. It would not replace Monero/Grin/Zcash but simply introduce a new option for Bitcoiners, and do no harm to those not wanting to participate. Chain analysis probably still would be able to assign a higher risk score to Bitcoins coming from Shielded Transactions, running indexers and detecting patterns just like they did with CoinJoins. While this of course can harm the fungibility of the Shielded bitcoins, the fungibility of other BTC would not be touched and it thus would not change the regulation landscape.

As much as I would like Bitcoin to have its own Privacy 'layer'.  I believe the way we have a public Bitcoin and a private Monero is the most healthy way right now.  It offers you two very distinct Cryptocurrencies that excel at their own features rather than a Zcash kind of 'hybrid' Cryptocurrency that excels at nothing.

Further more.  By having these two, I believe we can use them as a way to read the level of dystopia we are currently in.  A free Monero and a free Bitcoin means things are still looking good.  A banned Monero and a free Bitcoin means we are half way there.  A banned Monero and a free Bitcoin only for people who link their Addresses or Seeds to their own ID would be pretty much full dystopia.  This was always a 'health check' for me and I believe it does do a great job at telling you how bad things are for us.

Not to even mention that having both Bitcoin and Monero as either partially or fully private Blockchains would make things a lot easier for any leader who would want to strike both of them at the same time.  You can argue Monero is 'for people who have some thing to hide' but you can not argue Bitcoin is the same, considering any body can inspect its ledger in any detail they want for as long as they want to.  You would need better arguments, and for a Cryptocurrency that is fully transparent you can not have many.  Now put Bitcoin and Monero under the same 'for people who have some thing to hide' shadow and they are now both a lot easier to campaign against.

I personally do want more Bitcoin privacy but I believe we are doing better with the tools we currently have, such as Coin Joins.  I would rather switch from Bitcoin to Monero and back depending on what I need than having a hybrid Bitcoin that can be more easily attacked.  We are doing great, can we not mess all this progress up?

Another fork? Good luck with that. For privacy, it's best to create a separate coin. We already have Monero, as the ultimate privacy coin. There's no need to integrate privacy into Bitcoin. If developers go this route, it's best if they make it optional, instead of mandatory. Otherwise, regulators will be after Bitcoin's "tail", like they're doing with Monero right now.

I assume the concept of a "Shielded Bitcoin" is none other than using Zero-Knowledge proofs for privacy, right? If that's the case, then there's no need to make Bitcoin "shielded". Zcash has the same economic aspects of Bitcoin (supply, deflationary model), but with Zero-Knowledge proofs for privacy. What more can we ask? Let's just leave the privacy thing to true privacy coins, and keep focusing on Bitcoin as digital Gold or a store of value.