One of the commin misconception about Bitcoin is its supposed anonymity. In reality, it is not so. Though all users of Bitcoin take up a pseudonym which is their public key and this public key does not reveal the name or identity of the user. By using pseudonym, users tend to think that Bitcoin is anonymous - but it is not so. Let me explain below:
The pseudonym is now used for all transactions and all the transactions are recorded in a shared distributed ledger - i.e., everyone can see all transactions. This implies that all transaction data is available for any big data analytics.
By using transaction data with data from person's mobile: Locational data, Social network data, internet access data etc, it is possible to triangulate the pseudonym to the identity of a real person. With rapid advances in realtime bigdata analytics, it is now possible to link a bitcoin address to a real-world identity.
If one interacts with a bitcoin business: Online wallet service, Exchange, or a merchant - who usually want your real-world identity for tansactions with them. For example details like credit card information or shipping address; Coffee shop or resturants that accept bitcoins - then the buyer must be physically present in the store. The store clerk/attender know about the buyer - thus the pseudonym now gets associated with the real-world identity. The same information can be gleamed from digital trail in form of data from cell phone, CCTV grabs etc,. Information like geographic location, time of the day, social network postings (Twitter, Facebook etc) can all be collected remotely, analyzed and soon a pseudonym can be associated with a real-world identity.
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