What is Pseudonymity and Anonymity?

This article defines pseudonymity and anonymity in blockchain contexts, contrasts pseudonymous systems used by major cryptocurrencies with privacy coins that aim for stronger anonymity, and discusses the resulting regulatory tensions over KYC/AML—especially concerning centralized exchanges and decentralized exchanges (DEXs). It also examines how decentralization supports privacy, the ideological and technical challenges of enforcing identity verification on DEXs, and notes industry responses such as CertiK's KYC verification and security auditing services.