Pseudonymity is a concept that is unique to the cryptocurrency world. It is the idea of using an alias or a pseudonym as a part of a monetary transaction. Pseudonymity comes into play when people do not want to reveal either their identity or the destination wallet that their cryptocurrency is going to.
The most popular form of pseudonymity in crypto is what is known as a public key. As the name suggests, a public key can be accessed by anyone and is often used as a wallet address. A public key can be thought of as your cryptocurrency identity, since it is the address people use to send coins to you.
However, since it is not linked to your real world identity, it does offer some degree of anonymity. It is also worth noting that pseudonymity is not the same as complete anonymity. That is, while your identity may be obscured, all of your transactions will still be visible on the blockchain.
This means that your activities may still be tracked and determined. Therefore, if absolute anonymity is necessary, one should look into other methods such as coin mixing. In summary, pseudonymity is an important part of crypto and blockchain technology.
It allows people to use imaginary aliases or pseudonyms as part of their transactions, thus providing some level of privacy and anonymity. While it is not perfect, it is still a valuable tool in terms of ensuring some level of privacy while using cryptocurrencies.