Bitcoin is not anonymous, it's pseudonymous. What's the difference?

[Quick edit to add that I’m not saying this is a problem, I just wanted to point out the common misconception.]

I see the word "anonymous" thrown around a lot to describe Bitcoin, when in fact Bitcoin is not anonymous but pseudonymous. But what does that mean?

Well, all transactions on the Bitcoin blockchain are publicly available to view, so anyone can see all the transactions associated to an address. The only thing that stops someone from knowing how many bitcoins a person has is that they don't know what address belongs to what person: the address is a pseudonym. But once they are able to make the connection between a person and their address, that pseudonymity is lost. There are ways to get around this, for instance by using a new address for every transaction (not the same as a new wallet.)

For a truly anonymous blockchain, check out Monero or ZCash, which don't show addresses or transaction details in their public ledgers, making it impossible to figure out the "balance" of a given address, or who that address belongs to.