There is a myth that Bitcoin is completely anonymous, like digital cash. The reality of bitcoin privacy is more nuanced.
Bitcoin is “pseudonymous.” This means your identity isn’t attached to your wallet, but your transactions are public.
If you hand someone a $20 bill, nobody knows where it came from.
If you send someone 1 BTC, the entire world can see that Wallet A sent money to Wallet B. They just don’t know who owns Wallet A.
However, if you connect your identity to that wallet (like buying on a KYC exchange), your privacy is gone.
Compared to a bank, though, Bitcoin offers more control. A bank tracks every coffee you buy and sells that data to advertisers. Bitcoin doesn’t care what you buy.
So while bitcoin privacy isn’t perfect out of the box, it offers a level of financial discretion that is disappearing in our surveillance economy.