Hello my cryptocurrency-lovin' friends. I just want to have a casual chat, but not that casual, because I'm worried about some of you. Some of you who may be operating under the assumption that Bitcoin is anonymous. It is not.

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This is not a secret. I know a lot of you will be all, duh. Bitcoin.org very plainly states "Bitcoin is not anonymous" in its "Things You Need to Know" section. That's there because this is a very common misconception! Poop-chugging Bill Gates has it. It appears Ross Ulbricht had it, since FBI agents were able to trace $13.4 million in Bitcoin from the Silk Road to Ulbricht's laptop by tracing public transactions on the blockchain.

While the agents used Ulbricht's computer to figure out what appeared to be his personal Bitcoin wallets, the fact that he made no effort to hide that information may speak to a misplaced trust in the anonymity of his Bitcoin-fueled drug empire, especially since he didn't use tools like Dark Wallet to further obscure his identity.

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Ulbricht appears to have been pretty crappy at the whole anonymity thing in a number of different ways, but if he assumed that his Bitcoin transactions were anonymous, it wouldn't have been his dumbest mistake. After all, when you make a payment with Bitcoin, you're only identified with a cryptographic pseudonym. This is one of the selling points of the cryptocurrency for some people: It's harder to trace.

This pseudonymity does help people keep their transactions relatively private. It does not, however, make it impossible or even particularly difficult to find out who is doing what with the digital currency. Wired's Andy Greenberg explained how tracing Bitcoin transactions often comes down to simply knowing someone a snippet of information:

Although using bitcoins doesn't necessarily require revealing any identifying information, all bitcoin transactions are traced on the blockchain, the same widely distributed list of transactions designed to make counterfeiting bitcoins impossible. If someone can identify a user's bitcoin addresses—in Ulbricht's case, by seizing the laptop he was actively using at the moment of his arrest—then they can often be used to trace his or her transactions.

Researchers at the University of Luxembourg have highlighted methods to de-anonymize Bitcoin transactions. Bitcoin pseudonymity can be broken in a number of ways, from tracking payments to monitoring IP address nodes. And while tumblers and programs like Dark Wallet help, there is no bulletproof solution that makes Bitcoin impenetrable.