when ever people talk about Bitcoin, one of the things that comes to mind is that, this is a technology that is untraceable when used in sending funds. These are one of the reasons that, people give when discussing Bitcoin and it's true nature.
most times many newbies confuse these these two terms pseudonymous and Anonymous to be the same thing. The truth is that Bitcoin is truly traceable because Bitcoin was built to be pseudonymous. These two words may be close in meaning but not exactly the same thing .Pseudonymous means that someone is hiding under an identity such as a name, Address or even a username. while Ananemous is someone is trying to send a message without an hidden identifier such as Address or username so there can be no trace or trail on the person but that, is not the case when we talk about pseudonymous because here identity is only replaced by an identifier.
just like on the forum here were you use an identifier such olotu20 in replacing your real name, so people don't know olotu20 in the real Sense. so in Bitcoin your Bitcoin wallet address act's like pseudonymous. It Should be noted that your Bitcoin transaction is traceable and is made public in the Bitcoin blockchain.Bitcoin is a financial ledger that is public which can be identified via the wall address.
Bitcoin ----------> Pseudonymous + Public + Traceable.
Every Bitcoin transaction that is ever made on the Bitcoin blockchain is recorded permanently and block analyst can can Link multiple address to an individual especially on regulated exchanges which requires KYC. when ever Bitcoin transaction is made very important identifiers such as transaction I.D, Time of the transaction, which wall address the Bitcoin was sent from and the receiving wall address is recorded.
HOW YOUR IDENTITY CAN BE UNCOVERED.
Let say that, you buy Bitcoin or even sent Bitcoin from a known exchange which requires KYC, which I mentioned earlier. The exchange knows your real identity Olotu20 and the wall address that is linked to that identity, so as far as investigators can establish the connection between these they can, potentially follow the trends and movement of transactions these addresses.
EXAMPLE
Let say Olotu20 buy's Bitcoin from an exchange and Address X received the Bitcoin and was sent to another Address Y which was finally sent to another Address X.
Address X = 0.60 BTC.
Address Y= 0.58 BTC.
Address Z= 0.56 BTC.
LOOK OUT FOR A KNOWN ADDRESS.
When once investors can Link a known address to an exchange ( A ) that, requires KYC the investigators can link the connection between these address. Exchanges takes records of customers wall address, Transactions involved which has to do with withdrawals and deposit. with this investigators with the right legal backup can establish a connection.
EXAMPLE
Exchange ( A ) which is a customer's account, and is associated with address Y. And is associated with different address X,Z.
This is were a pseudonymous can be link with a real person because the investigators may know that among the three address one may be link with an exchange ( A )
Identity----------> Exchange ( A )---------> Wall addresses X, Y, Z.
You can add corrections to the thread because it's ment, for the purpose of learning.
Bitcoin transactions are very traceable just as you have said, because every Bitcoin transactions done are usually been recorded in a public blockchain and can be accessed.
But beginners will think otherwise as I was also thinking of same when I heard about Bitcoin for the first time, but get to know it's traceable when I got the opportunity of joing this forum.
This post will surely help alot in clearing many doubts and sharing more light on such amongst the forum members especially the beginners, although some members also that might have been here for sometime now still might just be seeing and hearing of how traceable Bitcoin is for the first time.
The explanation done on how the identity of the people that transacted can be traced is simple and understandable, but just wondering if the traceability of Bitcoin transactions that is possible will not endanger the people that transacted?
Also the meaning and differences of pseudonymous and anonymous that was explained by the OP is very good, because many will think they are the same as I also thought so when I first saw the words.
