A bit of a confusing image above? I had to do a lot of reading myself to make sense of it, and I like to think of myself as a relatively technically inclined person.
Anyway, this is a graph of the potential Bitcoin protocol “Dandelion”. First brought to my attention by Coindesk, Dandelion is a protocol that attempts to hide origin of the node who submitted a Bitcoin transaction (don’t worry, I’ll explain that in a moment). I encourage you to go read the details on GitHub (or at least the abstract).
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.