A good article was published on hackrenoon addressing the state of privacy and anonymity in Bitcoin. The author gives an in-depth introduction to the upcoming Dandelion++ protocol currently specified under BIP 156.

In a nutshell the protocol increases the anonymity of Bitcoin transactions by delaying broadcasts to the network and allowing the sender to only send to a number of nodes at a time, then let other nodes decide the next node to send the information to. This delay in broadcasting transactions makes it more difficult to trace transactions back to the original sender.

Resources

• BIP 156