The anonymity of Bitcoin and other cryptocurrencies has been one of the hot topics when it comes to cryptocurrencies, it has raised concerns relating to security. If you can really own cryptocurrency anonymously then you can do whatever you want, legal or illegal without being traced. This is a major concern for security agencies around the globe.
Cryptocurrency and Its Anonymity
Cryptocurrency is essentially a digital currency that is not created or regulated by any centralized government in the world. Its popularity skyrocketed in 2009 when Bitcoin was created by Satoshi Nakamoto, since then several other Cryptocurrencies like Ethereum, Litecoin, and Dogecoin have been created. The value of cryptocurrencies usually appreciates as time passes. Because Cryptocurrencies are not regulated by any government in the world you can say they are decentralized digital currency and this adds to their anonymity.
It can be said that cryptocurrencies are anonymous because they can be owned by people using a pseudonym, the use of your actual identity to acquire and use Cryptocurrencies is not necessary. However, Cryptocurrencies are not completely anonymous because through rigorous network analysis and research the true identity behind cryptocurrency accounts can be discovered. To do this one would have to trace the IP address of said user through their public address on the blockchain.
In reality, every transaction that takes place on a blockchain is transparently recorded and remains there forever because it cannot be erased.
Cryptocurrencies are Anonymous to a point but not entirely and as technology advances the pendulum could swing to either direction of the spectrum of anonymity.