The next step after masks is Pseudonymity. The concept of Pseudonymity is to decentralize one’s identity on the internet. Pseudonymity distinguishes from anonymity through the concept of maintaining a sense of accountability and reputation associated with the entity.

A lot of people nowadays use VPNs to achieve online anonymity. A VPN service plays a major role in masking the digital footprint of anyone seeking privacy. To know more about setting up a VPN to ensure your security and anonymity online, check out VPNRanks.


The Concept of Pseudonymity

Pseudo-anonymity enables an open society. One of the fundamental human rights and a requirement for self-expression is privacy. Separation of identities across our social selves, real selves, and our earning self, can provide us the required privacy as well as the right to access.

Outlined below are the three forms of identity:

  • Real Identity – Uses your real name. Inherently proves the right to access. They are used on Passports, birth certificates, and government-issued documents. Also common on Facebook.
  • Anonymity – Unlike your real name. Impossible to prove the right to access. They are used on forums such as 4chan.
  • Pseudo-anonymity – Linkable to a real identity. Possibility to prove the right to access specific things. They are used on Social platforms such as Twitter.

Pseudonyms are interesting to use because they’re not your real name, but they are persistent, and you can build up a reputation for them. Like you can build up Twitter followers or Reddit reputation.


The Concept of 33 Bits

The concept of 33 Bits can help measure Pseudonymity. The Degree of Pseudonymity can be described with the idea of 33 bits of Entropy. With an estimated 7.5 billion people in the world, you only need 33 bits of information about a person to find out who they are.

With 33 bits of unique information, you can de-anonymize anybody. If they have 0 bits of anonymity left, you can determine who the person is. With 10 bits of anonymity left, they are 1 out of 2^10 or 1 out of 1,024. So Pseudonymity is in a continuum within that 33 Bit range.


Why have a Pseudonymous Economy?

Autonomy, according to the United Nations Universal Declaration of Human Rights, is clearly defined as:

“No one shall be subjected to arbitrary interference with his privacy, family, home, or correspondence, nor to attacks upon his honor and reputation. Everyone has the right to the protection of the law against such interference or attacks.”

Everybody has freedom of speech, and Pseudonymity allows freedom after speech. But in today’s world, there can be serious consequences if you make a mistake. The negative press could have serious backlash for your business. Even sharing an article with controversial political views can have repercussions. But if things are done under a pseudonym, the stakes are different, and there is practically no action. They’re practically immune.

Pseudonymity allows people their free right to access. Just as privacy is crucial to an open society, the right to access is required for a functioning society. It is the ability to prove one’s ownership of value, credentials, or even clearance to specific digital and physical spaces.


How Would Pseudonymous Economy Work?

Just like you are in control of your finances, the same is not the case with your reputation. One strategy to safeguard your reputation online is to diversify it. This means to work and earn under one name, speak under another name, and use your real name only on official forums. As of today, every problem in computer science can be solved with another level of indirection. Like HD wallets or AWS bastions.

One of the most commonly used pseudonymous platforms we use today is Twitter. One can create a Twitter account with an email id and create a pseudonym to start broadcasting their thoughts to the world.

When you first create an account, with zero followers, without following anyone else, and with no active tweets, one could maintain some bits of anonymity. Now, if you create another account and migrate your information from your primary account to the pseudonym, you can bootstrap the new account. With some simple clicks, you can set up a new account, move over some reputation, and you can start speaking. So this drastically increases the utility of a pseudonym.

Let’s take another example of Bitcoin. Satoshi Nakamoto is the pseudonym of the person who developed bitcoin. This strategy protected the true identity of the person behind the work. And If their identities had been revealed, they could have been attacked, prosecuted, and the work could have been shut down. This is a very strong move that has had many long-term impacts on Bitcoin today.


Pseudonymity plays a big role in where society is heading today. An application like this would basically allow you to move along a reputation-anonymity continuum, trading off a small amount of anonymity for a higher reputation.