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Anonymity is the quality of a person whose identity is unknown. An anonymous person uses a pseudonym to operate in public without revealing their identity. In the age of the Internet, anonymity is extremely hard to establish and maintain. Bank accounts, employers, social media, and telephone companies almost all require personal identification.
The Bitcoin blockchain is inherently pseudonymous, not anonymous. Instead of a name, address, or phone number being linked to each transaction, only addresses, public keys, and signatures appear on the blockchain. These addresses do not themselves reveal who owns which bitcoin. However, using various heuristics and surveillance tools, governments and corporations can perform chain analysis to connect a users’s pseudonymous address to their real-world identity.