Initially Bitcoin p2p transactions can be monitored by the government, ISP, hackers and anyone who have access to your network, they can monitor and see where transactions are coming from and going, the messages it carries, it is basically an open communication without any form of encryption, although, they can't tamper with anything cause it is tightly guarded.
Thanks to the introduction of BIP‑324, communication between nodes are now encrypted making it difficult for observers to see the gossips between peers. This have added one more layer of security and encryption to P2P, making it even more secure and a bit more private.
NOW WHAT IS BIP‑324, is a bitcoin improvement proposal (BIP) that was adopted from the first proposal BIP‑151 that was first proposed on March 2016, although it wasn't implemented but it contains a notion to encrypt connection between nodes by March 2019, BIP‑324 was proposed which had a better architecture than the previous proposal, from 2020 they started working on this proposal and implemented it fully around 2024.
See the official BIP‑324 specification:
BIP‑324: Version 2 P2P Encrypted Transport ProtocolWHY THIS IS IMPORTANTBefore the inception of BIP‑324, it was easy for network observers like the government, ISPs (internet service providers), etc., to monitor Bitcoin nodes because P2P traffic was unencrypted. This new proposal has made this process difficult and more expensive to carry out. Although truly, it doesn't solve all the issues, but it has more room for improvement and growth. BIP‑324’s encrypted transport raises the cost of passive eavesdropping and makes traffic harder to identify
HOW IS THIS BETTER THAN TOR, VPNs, AND THE OTHERSTor, VPNs and the others only hides your IPs, but doesn't encrypt Bitcoin protocol messages themselves — confusion observers where data is coming from, but the core information, the messages carried within the gossips are exposed, that's where BIP‑324 comes in, it directly encrypts the data itself, solving the core issue, that is how it is better compared to the others. Tools like Tor and VPNs mask your network location, whereas BIP‑324 encrypts the Bitcoin P2P transport payload itself, making message content and types invisible to passive traffic observers.
A BLOG POST ON THIS TOPICAnd don't forget to run a Node to help contribute and strengthen BTC network.
