So, in plain english what is the stealth bip and why should the average non-techie noob like me care? Is is a modification to make bitcoins more anonymous? That is what it sounds like to me but I am not sure.
As I understand it in a basic way, the Stealth Address will help mitigate the problem of address reuse, though this may be an oversimplification of what it does.
(One socially meaningful function that people could really appreciate right away is that stealth addresses would likely make a straightforward and guilt-free way for a organization (non-profit for example) to post such an address to receive donations, as they would not then be revealing a bunch of information about the donors [and others in the network] every time someone donates to the organization.)
Why should you care? Essentially it's from a privacy angle, as that address reuse is done then this conveys information about you and others in the network. One could measure the extent to which you may be compromising privacy of others in the network based on your actions but without getting into that here, suffice it to say, address reuse isn't that great for the privacy of the network, and if wallets had support for stealth addresses, and if people had the ability to choose to use stealth or not to use it, depending upon their preferences of course, then that would be a good thing.
It's actually not what I would call "anonymity" because the use of Stealth as described wouldn't result in anonymity per se (IMHO). I believe it would actually result in enhanced privacy. From the original paper by Peter Todd, "The txin's owned by the payor are not revealed to the payee. In fact, they could be held by a third-party who simply makes a transaction with the appropriate txouts on behalf of the payee. (...) Less information about the txouts is leaked." I don't consider such developments anonymous actually, but it's a pretty good privacy scheme. Here's what I believe to be the first ever successful stealth transaction:
https://blockchain.info/tx/63e75e43de21b73d7eb0220ce44dcfa5fc7717a8decebb254b31ef13047fa518
Notice that there are things you can see about it. It's certainly not fully anonymous, from my perspective.
OK, the final part of your question was, BIP. What is the stealth BIP? That's the Bitcoin Improvement Proposal. Stealth has been suggested to be made as a Bitcoin Improvement Proposal so that this would have support in bitcoin / core. The process lays out ideas that would help improvements happen and the developers vet them. There's a 'readme' that covers that here:
https://github.com/bitcoin/bips/blob/master/README.mediawiki
Respect,
ABISprotocol
