Why are bitcoins considered pseudonymous?

Bitcoins are considered pseudonymous because holders of bitcoins are not easily identifiable. While transactions made using bitcoins are recorded on a public ledger known as the blockchain, the identities of the individuals behind the bitcoin addresses are not inherently known. Each bitcoin address is a randomly generated string of alphanumeric characters, which does not contain any personally identifiable information.

This means that while the transaction history can be traced on the blockchain, it does not directly reveal the identity of the users unless they voluntarily disclose it or unless there is a specific investigation that links an address to an identity. The pseudonymous nature is a key feature that contributes to privacy in cryptocurrency transactions, allowing users some degree of confidentiality while still maintaining a transparent record of all transactions.