Quote from: awesomey on October 22, 2012, 08:00:59 AM

I jumped on bitcoin because I've heard that it was anonymous. But after more reading I'm not so sure. Is it that all transactions can be monitored, traced, and/or viewed publicly? I mean ultimately if everything could be traced back to either you putting money in, or pulling money out... well that doesn't sound very anonymous to me at all!

So are bitcoins anonymous or not?

With some effort, bitcoin can be used in a rather anonymous way. However, without effort it becomes rather easy to reduce your anonymity.

If I obtain all my bitcoin through either mining, or exchange with individuals who don't know my identity, and I use a new address for every transaction, and I am careful to never associate my identity with any of my bitcoin addresses, then I can be pretty anonymous using bitcoin.

However, if I provide identifying information to an exchange like Mt.Gox and use them for currency exchange then they can potentially provide that identifying information to entities who can then track my use of bitcoin. If I use an address for a transaction with someone who can identify me, and then use that same address or other transactions in the future, then that person can provide my identity to entities who can then track my use of bitcoin.