This article is a continuation of the first part, where we discussed the private key as the foundation of digital ownership.
Now we come to a frequently asked question—especially for a non-technical audience:
How is it possible for someone to receive money… without giving a name, account number, or any identity?
Traditional Finance: Identity is Everything
In traditional financial systems, identity is at the center of everything.
To receive money, you must provide:
- name
- account number
- bank information
- sometimes even address and additional documents
Every transaction is always linked to an identity.
Without identity, the system cannot operate.
Blockchain: Identity is No Longer Required
Blockchain introduces a different approach.
You don’t need to give your name.
You don’t need to disclose your identity.
All you need is one thing:
an address
What is an Address?
An address is a representation of a public key.
It looks like a string of random characters, for example:
0x7A3F...9cD2
For humans, this looks meaningless.
But in the blockchain system, this is the destination for sending.
Anyone who knows your address can send assets there.
No need to know who you are.
The Relationship between Private Key, Public Key, and Address
From the previous part, we know that:
- the private key is secret
- the public key can be shared
From the public key, the system generates the address.
Simply put:
- private key → generates public key
- public key → generates address
All of this is done through a one-way mathematical process.
Meaning:
- from the private key, we can get the public key and address
- but from the address, it is impossible to get back to the private key
A Simple Analogy
Imagine the address as a shipping destination address.
Anyone can:
- see the address
- send something there
However, the address does not reveal who owns it.
It does not contain:
- name
- identity
- personal information
It is just a destination.
Is This Anonymous?
Not completely.
Blockchain is transparent.
All transactions:
- are recorded
- can be seen
- can be analyzed
But the identity behind the address is not immediately visible.
This concept is called pseudonymous.
Meaning:
- activity is visible
- identity is not directly known
Implications for Business and Modern Systems
This concept opens many new possibilities:
- Payment systems without revealing full identity
- Cross-border asset transfers without intermediaries
- Management of digital assets without dependence on institutions
But on the other hand, it also presents challenges:
- how regulations are applied
- how identity is verified if needed
- how to maintain a balance between privacy and transparency
Conclusion
In traditional systems, identity is the main requirement to transact.
In blockchain, transactions can occur without direct identity.
All that is needed is an address.
And behind that address, there is one thing that remains at the center of everything:
the private key
In the next part, we will discuss how all these transactions are recorded and protected against tampering.
Why blockchain is often called a “digital ledger”, and how this system can be trusted without a central party.
That’s where the concepts of ledger and block begin to play an important role.
About the Author
Nitza Alfinas Rahman is a technology practitioner with more than 18 years of experience in software engineering and 10 years in blockchain.
Keep following this series to understand how blockchain, Web3, and AI will change how we build and manage business in the future.
If you want to understand how this technology is actually used in Indonesia—for business, government, or startups— please read our complete guide about blockchain in Indonesia.