There are several misconceptions about Blockchain, Bitcoin and anonymity. To debunk this myth, we need to first look at the difference between Blockchain and Bitcoin.

Many think that Blockchain and Bitcoin are the same thing. Blockchain is the underlying technology – the algorithm that enables peer-to-peer transactions to be recoded on a distributed ledger throughout the network. Bitcoin was one of the first implementations using Blockchain as its underlying technology. Bitcoin is a cryptocurrency that can be exchanged directly between two people without passing through a third party like a bank.

Blockchain is also an open-source system. Anyone with the right equipment can download the code and set up their computer to become a node in the system, referred to as miners. Once a node is set up, it copies and maintains all the transaction history in the whole blockchain. In the case of the cryptocurrency Bitcoin, public websites also provide a feed of transactions happening live. Which means that the data is publicly available for all to see.

Particularly for Bitcoin transactions, these are always associated with an address – an identifier that represents a wallet. This means that Bitcoin offers pseudonymity. However, anyone is able to see the transactions and balance associated to a particular wallet. So once an address is traced to an actual person, the anonymity is lost.

Since Blockchain is open-source and therefore extendable, there are other implementations that might offer more anonymity than Bitcoin. As with any technology, it is important to carefully understand the implications of the underlying technology that are available. New protocols and improvements are being devised to ensure that Blockchain as a technology evolves and matures to a technology that reflects the users’ needs.

For more myths about Blockchain: https://datafloq.com/read/12-myths-about-blockchain-technology/3522

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