When you're blogging about your life, there's a whole cast of characters who are not you but may feature prominently in your stories; however, since they haven't started their own online ramblings, they might be less than thrilled about their identities being revealed on your page. To protect the innocent (and the guilty), code names are frequently used on personal blogs to help designate recurring guest stars in a more anonymous fashion.
To date, I haven't employed this practice; mostly I try to avoid using names altogether, but occasionally I slip up and one or two get in. It's tough, because it makes it hard to find a concise way to write about the other people in my world; much like the guy I'm dating nomenclature, descriptive phrases get clunky and irritating. But I also find it kind of hard to figure out what to name people – do you choose something random? a play on their real name? an inside joke? a short descriptive phrase? something serious? something silly? And how do you get past the fact that you feel kind of doofus using code names, like we're all in MI5 or something?
I may test it out on a case by case basis, for some of the key folks. Although it's worth noting that no code will be completely anonymous; anyone who knows me well also either knows or knows of many of the folks I refer to, and will recognize them by behaviors, relationships and situations. But then, if they know me that well, I've probably already told them all these stories with names and relevant details involved … so it's mostly just to make sure that strangers don't start stalking my friends and family using my musings.