What is the Dandelion Anonymization Proposal?

Bitcoin is not an anonymous cryptocurrency, despite some “financial experts” claiming otherwise. It is evident a lot of people would like to see more anonymity when using cryptocurrency, though. As a result, they flock to alternatives, such as Monero and ZCash. A new BIP may finally grant Bitcoin the anonymity so many people are looking for. Dandelion is an intriguing concept which deserves a closer look.

Dandelion Is Now A Bitcoin improvement Proposal

It is important to note the Dandelion network is not something which has developed out of the blue. The concept was initially proposed in February of this year in the form of a whitepaper. At that time, the feedback was overall positive, as it seems to check a lot of the right boxes for Bitcoin users looking to improve their anonymity. Fast forward to today, and the implementation of Dandelion may be a lot closer than most people would anticipate.

Under the hood, the Dandelion protocol packs some interesting features. It is designed by a ZCash advisor and a team of university researchers. By introducing a whole new type of transaction broadcasting, the Bitcoin network can effectively be anonymized. More specifically, it would prevent blockchain analysis teams from linking addresses to IP addresses.

As one would expect, the Dandelion protocol requires a new type of network node to relay these transactions. Said transfers take a few “hops” around the network to obfuscate where the money is going to and who originally sent the funds. However, there are two different phases associated with anonymizing Bitcoin transfers through Dandelion, both of which are quite intriguing.

First Dandelion uses a “stem” phase. At that time, every node on the network is capable of relaying Dandelion-type transactions to one single peer. This transfer then takes its aforementioned number of “hops” around the “stem”, which will evolve the transaction into reaching the fluff phase. This part of the anonymization process is the actual obfuscation part. At this time, it becomes – in theory – impossible to determine the source of the stem transaction.

It is well worth mentioning Dandelion is currently being tested on the Bitcoin network. It is good to see the creators take this course of action, as there may always be some unforeseen issues. This is why things such as the Bitcoin testnet exist in the first place. Some new design features have also been introduced, all of which are documented in the official BIP associated with this network upgrade.

Bitcoin users all over the world may soon be able enjoy more anonymity and privacy. Dandelion is just one potential solution to achieve this goal. There is also the Breeze Wallet to take into account, which is currently in the latter stages of development. It is good to see some alternatives to Bitcoin mixers arise though, as on-protocol solutions are far more accessible to the everyday user.

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