Blockchain has truly blessed us a lot of features. So many benefits to enjoy from the awesome tech you can't just help but love them all when you truly get to understand the capabilities of Blockchain. From taking away the middlemen and making it possible for us to truly interact and do business in real peer-to-peer manner, to other cool stuff it brings like staking and lending where you earn passive income for HODLING your assets, to being able to track food and medicine (like we see Blockchain being used in health and food delivery induatries), to Defi that is taking away the centrality and autonomy of a few and giving it back to the people. But my favourite Blockchain features undoubtedly remains the Pseudonymity, Anonymity and Privacy that Blockchain gives.
If you're anything like me, then you really really, really (just for emphasis hahaha) value your privacy. With the use of Blockchain that privacy centricity has risen to a whole new level it's just crazy. Many people think the trio of Pseudonymity, Anonymity and Privacy are the same thing, but they really are not, so let's look into them, understand them and touch on how Blockchain helps you to achieve all three.
Pseudonymity: This basically means using a fake name or identity, and not your real one. If Don Christov was not my real name, that would make it a Pseudonym for me. Blockchain uses the public and private key cryptography, and they enhance Pseudonymity. Here, the user’s public key basically serves as a pseudonym. Blockchain masks your real identity and every transaction you make goes through your public key (Pseudonym) and is then recorded on the distributed ledger for all to see. So though others can see the transactions you've made, they don't know who did it because your identity has been hidden. As long as no one can link you to your public keys they don't know who's making the transactions, they just see the records not who is behind them. In the banks and other traditional financial institutions, when you pull out a person's bank records you see everyone they sent money to and received money from, complete with the names of the people and their info. But with Blockchain, the account number is your public key and with the public keys, you can't tell who the assets were sent to and who they were received from, even though you can transparently see the assets and the quantities sent and received.
Anonymity: Anonymity in its most simplest terms means that you are a Ghost. Your digital footprints have been scrubbed and wiped clean. When you're anonymous, your Identity is untraceable and you can't be easily found. One reason many associate Crypto with being for scammers and hackers only is because of this feature. One of the quickest ways to track anyone down is through their IP Address, you tiniest detail can be gotten just by obtaining your IP address. But if you've been into Crypto and Blockchain for a while, then you should know what Tor is. Tor stands for The Onion Routing (TOR) and just like the name it makes use of onion routing to wrap up your IP address in so many layers of encryption that it becomes impossible to track you down. So many Blockchains and projects allow the use of Tor to enable and give their users more anonymity from probing public eyes. Some Blockchains even come with Tor by default, striving to make you as untraceable as can possibly be. Verge and Monero are two examples of privacy coins that make use of Tor to protect the transactions of their users.
Privacy: Now this is the crème of the crop for me. While Blockchain gives you a level of privacy and anonymity, you still can be tracked down with your public address though very hard it's possible. And that my friends is where Privacy Coins come into the picture lol. A Privacy coin is a coin that uses extra security to secure the transactions of their users. Remember that everyone can check your transactions on the Blockchain, but they just don't know its you. Well with privacy coins, the users can carry out totally anonymous transactions without anyone knowing how much was sent, from what address to what address, privacy coins also help the users keep their account balance private. Privacy coins carry out these features by obscuring the sender’s address, the receiver’s address, and the transaction amount when it is carried out.
There are a host of Privacy Coins today, we have Monero (XMR), Zcash (ZEC), DASH (DASH), PIVX (PIVX), Verge (XVG), Beam (BEAM) and my personal favourite the new Ghost by McAfee (GHOST) to mention just a few. Each Privacy coin has the specific way it carries out it's function. Monero uses Ring Signatures, Stealth Addresses, and Ring Confidential Transactions. ZCash uses Zk-snarks, Beam uses the MimbleWimble Protocol and Dash uses CoinJoin. Ghost my favourite currently uses RingCT and stealth addresses, but they're currently researching and looking into Triptych ring-signatures [Noe20], which improves the space complexity of ring-signatures from O(1) to O(log(N)). The protocols these coins use is a topic I might consider discussing another time, it can be complex.
While the Internet and centralised media have taken away our Anonymity, our privacy and made the use of a Pseudonym almost impossible. But Blockchain has restored that privacy and anonymity. That my friends is one of my best features of Blockchain.
