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Gemini Cryptopedia
Cryptopedia
Anonymity vs. Pseudonymity In Crypto
Learn the difference between anonymity and pseudonymity and their implications for crypto.
August 31 2024
Summary
Many in the crypto community employ some level of anonymity or pseudonymity for security and privacy purposes or as a means of working toward self-sovereignty. Anonymity and pseudonymity provide different, but equally important, protections.
Someone who is anonymous is able to operate or speak in a way that makes them unidentifiable. Someone who is pseudonymous operates or speaks in a way in which they can be identified, but their identification shields who they actually are.
Take, for example, the comments section of a website where a login is not required and users can comment without identifying themselves. This is anonymity. An example of pseudonymity is The Rock, whose real name is Dwyane Johnson, or any other professional who performs under a stage name.
What Does Anonymous Mean in Crypto?
Although transactions with many cryptocurrencies, like bitcoin (BTC), are more traceable than cash transactions, some cryptocurrencies were designed with anonymity and privacy in mind, including Zcash (ZEC), Monero (XMR), and Grin (GRIN) and Beam (BEAM).
Although some transactions are anonymous to further criminal behavior, privacy is a basic human right, afforded to citizens by governments, and is an essential component of greater freedom. For example, anonymous transactions would allow a person in a non-LGBTQ+-friendly country to donate to an LGBTQ+ rights organization without revealing their real-world identity and risk facing persecution.
What Does a Pseudonym Mean in Crypto?
Many in the crypto community use pseudonyms for privacy, either to shield their identity as part of a move toward self-sovereignty, or because of concerns about their personal privacy or security. Many find Bitcoin appealing because pseudonymity is built into the protocol.
When you open a bank account, you are required to show identification that links your financial transactions to your identity, which is neither anonymous data nor pseudonymous data. When you create a Bitcoin wallet, you generate an alphanumeric address that allows you to send or receive bitcoin and is visible to the whole world on the blockchain. However, this address provides you with pseudonymity, rather than anonymity, because financial forensics on your public address can be traced back to your real-world identity.
The debate between privacy advocates and lawmakers about the pros and cons of pseudonymous and anonymous cryptocurrencies is ongoing, but hopefully the speed of technological innovation and mainstream adoption of crypto will lead to a compromise soon.
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Cryptopedia
Anonymity vs. Pseudonymity In Crypto
Learn the difference between anonymity and pseudonymity and their implications for crypto.
August 31 2024
Gemini Cryptopedia
Gemini is a next generation cryptocurrency exchange and custodian that allows customers to buy, sell, and store digital assets.
You will lose your Bitcoin and other crypto when you die...
...unless you set up Crypto Inheritance Management today.
It's simple — if you don't worry about crypto inheritance, nobody else will — not your software or hardware wallet vendors, not your exchanges, and not your wealth managers. So it's up to you to think about how to protect the generational wealth you have created, and reduce the risks around passing that wealth on to your family and heirs. What are the challenges with crypto inheritance?
- Crypto Wallets are difficult to use and do not offer crypto inheritance management. In fact, most of them tell you to write down your seed phrase on a piece of paper, which is practically useless.
- Some people back up their wallet seed phrases or private keys on paper, local devices like hardware wallets or USBs, or in the cloud. All of these options have severe drawbacks that range from hacking to accidental loss to disrupted cloud services.
- Software wallets operate onspecific blockchains, yet your crypto assets span multiple blockchains. For inheritance to work, you must be able to manage inheritance across every blockchain — now and forever.
Vault12 is the pioneer in crypto inheritance management. Watch our explainer video above, or our inheritance demo today.
Crypto Inheritance Management: Get ready today
Vault12 is the pioneer in Crypto Inheritance Management, and offers an easy-to-use and secure method for assigning a legacy contact to your crypto wallets. Vault12 Guard enables you to pass on your wallet seed phrases and private keys for any cryptos including Bitcoin (BTC) and Ethereum (ETH) to future generations. It's designed for everyday people, yet strong enough for Crypto OGs.
This innovative, decentralized system uses a hybrid approach of software fused with the Secure Element of phone devices (the Secure Enclave for iOS devices, and Strongbox for Google devices).
Vault12 Guard enables users to appoint one or more people or mobile devices as Guardians. The designated Guardians are entrusted to collectively protect the user's comprehensive collection of wallet seed phrases and private keys, which are safely stored within a decentralized digital Vault. Nothing is stored on cloud servers or Vault12 servers, and no assets are stored on local devices, making them less of a target.
The decentralized approach reduces points of failure and removes the necessity for regularly revising wallet inventories or modifying instructions for your lawyers (which could lead to privacy breaches). Simply put, Vault12 Guard is the best way to preserve crypto generational wealth.
Take the first step and back up your crypto wallets.
Designed to be used alongside traditional hardware and software crypto wallets, Vault12 Guard helps cryptocurrency owners back up their wallet seed phrases and private keys (assets) without storing anything in the cloud or any single location. This increases protection and decreases the risks of loss. Making sure you have an up to date back up is the first step in crypto inheritance management.
The Vault12 Guard app enables secure decentralized backups and provides inheritance for all your seed phrases and private keys across any blockchain, including Bitcoin, Ethereum, ERC-20, and other crypto wallets.
Note: For anyone unfamiliar with cryptocurrencies, Vault12 refers to wallet seed phrases and private keys as assets, crypto assets, and digital assets. The Vault12 Guard app includes a software wallet that works alongside your digital Vault. The primary purpose of this is to guard your Bitcoin (BTC) or Ethereum (ETH) wallet seed phrases, private keys, and other essential data, now and for future generations.