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Updated

Pseudonymous

In short: Being pseudonymous means using a pseudonym, a consistent made-up name, instead of your real identity.

Being pseudonymous means using a pseudonym, a consistent made-up name, instead of your real identity. The best-known example in crypto is "Satoshi Nakamoto", the name used by whoever created Bitcoin.

Why it matters

Users of public blockchains such as Bitcoin are pseudonymous in a similar way. Addresses carry no names, but every transaction they make is recorded openly and permanently. So users are pseudonymous rather than anonymous. Once an address is linked to a person, for example through a post where they shared it or an exchange account that required identity checks, its whole history can be traced back to them.

Example

A freelancer shares one address on a public profile to receive payments. Anyone can paste that address into a block explorer and see every payment it has received and sent. The address shows no name, yet because the freelancer published it, its entire history now points to them. Using a fresh receiving address for each payment makes this kind of linking harder.