Is Bitcoin Anonymous?

Many people are convinced that bitcoin is completely anonymous and no transaction can be traced. However, that is not the case since the currency is ‘pseudo anonymous’ at best.
The term pseudo anonymous means that either buying and selling bitcoins or conducting any transactions, is roughly analogous to allowing a person to effectively write under a pseudonym, in lieu of his real name.
And just like the literary world, once the author’s pseudonym becomes linked to his actual real world identity, then just about anything and everything that he ever wrote under that specific pseudonym will consequently be linked to him alone.
In the world of digital currencies and specifically Bitcoin, the user’s pseudonym is the address through which he can conduct bitcoin transactions. As a matter of fact, just about all transactions that involve the specific address are permanently in the blockchain that governs bitcoin transactions.
In a nutshell, once your digital currency or bitcoin address is successfully linked to your actual identity, then every transaction that you have ever made will automatically be linked directly to you.
The reason behind this is that Bitcoin digital currency is able to (and actually does) maintain an up to date and entirely transparent ledger that contains a comprehensive log of all the transactions that have occurred under your alias (address).
Here, it is pertinent to note that the actual coin owners are not always identified during or immediately after they have successfully completed a transaction courtesy an entirely identifiable ID, but nevertheless any payments that are made with the help of Bitcoins are not entirely anonymous.
Yes, the fact remains that as a general rule, most bitcoin transactions are more or less reasonably private. This is due to the fact that there is no actual central database in existence as such, that can be called upon to divulge the database. Nor is there any individual or corporate entity that is directly responsible for reporting transactions or even triggering alarms in case of illegal transactions.
However, should there be law enforcement related investigation, any crook will find out quickly enough that is anonymity does not confer on him a cloak of complete invisibility. In other words, it is possible for him to remain hidden but only if there is no detailed scrutiny of his account.
However, the overall degree of anonymity will vary reference to the different types of transactions. For example, in case of an online credit card purchase, your identity may have to be given to the vendor before you are granted approval for your transaction. In this case, bitcoin is inherently more anonymous since it takes considerably more effort to find out precisely who owns which wallet. Similarly, the same applies for check based payments since they can easily be traced as well. In both of the above cases, bitcoin is considerably superior to these methods of payment, at least with regard to its anonymity.

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