The beauty of the blockchain lies in its decentralized, open nature, but because of those very characteristics, specific actions need be taken to protect bitcoin transactions and balances from being exposed in undesirable ways. Users can inadvertently reveal sensitive information about themselves and their transaction history if they use a single address for all of their bitcoin activity, which is the default behavior of many wallets today.
When bitcoin addresses are used multiple times, transactions can be linked to one another, and if it becomes known who the participants were in any one such transaction, a large amount of that address’ transaction history can be exposed. For instance, say you work at a company that pays its employees in bitcoin. You would of course know the address that is generating the transaction that pays you, and because the blockchain is public, you could also see the other transactions that were broadcast to the network by that same address. This could allow you, or anyone else who knows the source address, to infer private information around colleagues’ compensation, company ledgers, etc.