You see every time a node (a node being a computer running traditional Bitcoin software) makes a Bitcoin transaction it “announces” it to other nodes. While it’s necessary for nodes to do so (how else would the spread they word), it also means that another node could make note of who spread the word of the transaction and then use that information in whatever way they see fit.
This is where Dandelion comes in. To oversimplify everything, it basically shuffles the transactions between nodes, making it very hard to find out what node really submitted that transaction (now does the image make sense? It’s a bunch of transactions being shuffled between nodes). This is by no means anonymity, but it does strengthen your pseudonymity a bit; creating a hurdle for dragnet style surveillance. Best of all, this would not require a hard fork to implement, so implementation is foreseeable.
Although Dandelion would not have a noticeable difference for most users, it would passively provide them a bit more privacy and create a fairly large barrier for somebody to perform mass surveillance.
Therefore I do hope that the development is successful and that we see Dandelion implemented at some point in the future.
Go ahead and read it, this article is the basis of mine. Long story short the author claims that Bank of America closed his account, his wife’s account, and the account he was using to hold his daughter’s college funds in because he started a firm that traded cryptocurrencies.
Based the responses of many financial institutions towards Bitcoin in the last year or so you would think that they are afraid of Bitcoin and/or there is a conspiracy against Bitcoin.
But aren’t a bunch of banks researching the blockchain?
You probably keep hearing that “x institution is researching how to use the blockchain”. Keep in mind that “Bitcoin” <> “Blockchain” are not synonymous: Bitcoin is a decentralized P2P currency, where a blockchain is simply a ledger. So a bank could adopt a blockchain style ledger but still remain hostile to Bitcoin.
So, what do I think?
Bitcoin is yet to even develop much of a niche, so I do not see Bitcoin “killing fiat” (or similar chatter you’ll find on Reddit) any time soon (and probably not ever). Because of this I wonder why so many banks have taken a hard line stance as if it were cutting into their business.
Still though, if you read the articles that I have linked to it will really sound like there is a conspiracy against Bitcoin (or cryptocurrencies in general).
However, to be honest, I have absolutely no idea if there is one or not. Reading about events like these is creating the same questions in my mind that they probably created for you, and one could make a logic argument both for and against a conspiracy against Bitcoin.
What I can say though, is that it’s is very important we keep a close eye on events like these. I think that they are a good example of our ever decreasing financial freedom if a large bank can tell use we can or can’t buy something with our own money.
What is this bill?
In short, this Arizona state bill (SB1091) will allow you to pay your state taxes in Bitcoin (and potentially other cryptocurrencies as well). Supposedly other states are also considering this, but Arizona is the only one to have made any progress towards it.
What’s the news?
If you have followed Bitcoin related news you would know that this is not the first time this story has broke, in fact it’s been in the news on and off for nearly 4 months. Just like the previous times, however, it’s in the news because of the progress it is making.
According to Legiscan, after passing the Arizona State Senate it is now going to be voted on in the Arizona House of Representatives; meaning that it is getting close to either being signed by or vetoed by Arizona’s governor Doug Ducey (assuming it passes the house).
What does this mean for Bitcoin?
If this bill passes, it will be a great source of publicity for Bitcoin; as well as a much needed source of adoption that will help give Bitcoin a better sense of “legitimacy”. Still though, it shouldn’t be to overblown, as this is kind of news will probably be shrugged off after some time by most everyone (as with most news it seems – everything has a flashy title and politically charged content that is forgotten by the time the next story breaks).
Do I think it will pass?
Judging by the rate of success it has had getting to the point that it has gotten, as well as the fact that most politicians are probably looking to get their names in the headlines (for a good reason of course); makes me pretty sure that this will pass. Of course I’m no political analyst, so take my predictions with a grain of salt.
Like I said above, I think this is a badly needed source of legitimacy and good publicity for Bitcoin. I’m expecting this bill to pass, although to be honest I think it’s more for show and publicity; and that it really will not remain in the news for all that long (or become all that utilized).