The anonymity of the blockchain depends on the specific blockchain and how it is being used. Some blockchains, such as Bitcoin, were designed to provide a high level of anonymity to users by default. Transactions on these blockchains are recorded on a public ledger, but the identities of the parties involved in the transaction are not directly disclosed. Instead, users are identified by their unique cryptographic keys (i.e., wallet addresses), which are long strings of numbers and letters that are used to sign and verify transactions.

Other blockchains, such as Ethereum, are not designed to provide anonymity by default, and transactions on these blockchains are publicly visible on the blockchain. However, it is possible to use Ethereum and other non-anonymous blockchains in a way that provides some degree of anonymity by using techniques such as mixing, which can help to obscure the identity of the parties involved in a transaction.

It is also worth noting that blockchains are often used for applications other than cryptocurrency transactions, and the level of anonymity provided by a blockchain can vary depending on the specific use case. In some cases, a blockchain may be designed to be completely transparent and open, with all transactions and interactions visible to all users, while in other cases, the blockchain may be designed to provide a higher degree of privacy and anonymity.

What does it mean when crypto users say ‘pseudonymity’?

In the context of cryptocurrencies, pseudonymity refers to the use of a pseudonym, or a unique identifying code, to represent the identity of the parties involved in a transaction. This means that while the transaction itself is recorded on the blockchain and is publicly visible, the identities of the parties involved are not necessarily revealed. User’s unique identifying code is typically a list of numbers and letters that corresponds to a person’s digital wallet aka a wallet address. 

This can provide some level of privacy for users of cryptocurrencies, as it allows them to conduct transactions without revealing their real identities. However, if users are looking to trade their cryptocurrencies for fiat currency and ‘cash out’ through an exchange, then they will typically be required to provide identifying information like their name and address due to Know-Your-Customer laws that the exchange must adhere to in the United States.