![Eyeball replacing head of laptop user](https://vault12.com/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yOTgzOTUyMC9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTczODY4MTM2Nn0.Z1YFbx5loz-pxPkQ5T-zmPCYwAOxno0Z-BmgHUd7obc/image.png?width=1200&height=400&quality=85&coordinates=0%2C146%2C0%2C147)
Gemini Cryptopedia
Learn the difference between anonymity and pseudonymity and their implications for crypto.
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.
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.
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.
Cryptopedia does not guarantee the reliability of the Site content and shall not be held liable for any errors, omissions, or inaccuracies. The opinions and views expressed in any Cryptopedia article are solely those of the author(s) and do not reflect the opinions of Gemini or its management. The information provided on the Site is for informational purposes only, and it does not constitute an endorsement of any of the products and services discussed or investment, financial, or trading advice. A qualified professional should be consulted prior to making financial decisions. Please visit our Cryptopedia Site Policy to learn more.
Learn the difference between anonymity and pseudonymity and their implications for crypto.
Gemini is a next generation cryptocurrency exchange and custodian that allows customers to buy, sell, and store digital assets.
...Unless you set up Crypto Inheritance Management today.
It's simple—if you don't worry about it, nobody else will—not your software or hardware wallets, not your exchanges, not your wealth managers. So you have to think through what's needed 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?
Vault12 is the pioneer in Crypto Inheritance Management that delivering an easy-to-use and secure method for assigning a legacy contact to your crypto wallets. This enables you to pass on your wallet seed phrases and private keys — including Bitcoin (BTC), Ethereum (ETH) — to future generations. Designed for everyday people, and strong enough for Crypto OGs.
This innovative, decentralized system enables users to appoint a person or mobile device as Guardian. The designated guardian is entrusted to protect the user's comprehensive collection of wallet seed phrases and private keys, safely stored within a decentralized digital Vault. No information is stored on cloud servers, or Vault12 servers and nothing is stored on local devices making it 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, often leading to privacy breaches. It is the best way to preserve crypto generational wealth.
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.