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Dandelion is a proposed transaction relay protocol which would improve Bitcoin’s current method for relaying transactions across the peer-to-peer network. The goal of Dandelion is to eliminate certain deanonymization attacks which are currently possible against the network.

Bitcoin’s peer-to-peer network is composed of nodes that broadcast and relay transactions to one another. It is assumed that if a node is the first node to broadcast a transaction, it is the originator of that transaction. For a node which does not use the Tor Network, this could allow anyone to tie that transaction to an IP address and a physical location, putting that node’s owner at risk.

Currently, Bitcoin’s peer-to-peer network uses diffusion to inform the entire network of a transaction. This design allows an attacker to effectively deanonymize which nodes broadcast which transactions across the entire network. By replacing diffusion with a “stem-and-fluff” method, Dandelion attempts to prevent transactions from being linked to specific nodes and thus protect the entire network from deanonymization attacks.

Learn more about the Dandelion proposal.