Questions about how identity is tied to Bitcoin and its use are understandable. It can be more than a little confusing to parse what aspects of your name and personal information will be tied to the platform. While it carries a reputation for allowing users to operate in the shadows, you may also know that Bitcoin is tied to distributed ledger technology, which records every transaction and traces them back to their origin. So, is Bitcoin anonymous?
The short answer is no, not entirely. While anonymity indicates that the identity of an actor is unknown, Bitcoin transactions are linked to a specific address and, thus, an “identity.” However, that address does not necessarily have to be tied to a real-life identity. That is why Bitcoin is often described as “pseudonymous.” If a user’s Bitcoin address is tied to their real identity, then it is possible to trace activity back to them. If not, it is possible only to trace activity back to their Bitcoin pseudonym.
Bitcoin’s blockchain-based ledger stores every transaction conducted on the platform forever. The original white paper that launched Bitcoin, “Bitcoin: A Peer-to-Peer Electronic Cash System,” encouraged users to change addresses for every transaction to keep them from
Read more ... source: Bitcoin Magazine
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