PSEUDONYM

Bitcoin is Pseudonymous. In the crypto community, many people use a pseudonym to hide and protect their identity as part of a move toward self-sovereignty, and because of concerns about their personal privacy or security. Many find Bitcoin appealing because pseudonymity is built into the protocol. Compared to bank accounts where you are required to show identification that links your financial transactions to your identity, it is neither anonymous nor pseudonymous data. Wherein in bitcoin, you generate an alphanumeric address that provides you with pseudonymity, rather than anonymity, because financial forensics on your public address can be traced back to your real-world identity. It also allow you to send or receive bitcoin and is visible to the whole world on the blockchain.

It is also Anonymous in a way that it protects the freedom of people and their privacy. For example, anonymous transactions would allow a person in a non-LGBTQ+-friendly country to donate to an LGBTQ+ rights organization without revealing their real-world identity and risk facing persecution. This will protect them from revealing their identity. Although transactions with many cryptocurrencies are more traceable than cash transactions, some cryptocurrencies were designed with anonymity and privacy in mind, including Zcash, Monero, Grin, and Beam. It was recommended in the original whitepaper that in every transaction, Bitcoin users should use a new address, this is to avoid the transactions being linked to a common owner. Although this remains a best practice, it is not enough to guarantee full anonymity due to multi-input transactions.