In network services involving sensitive data transmission, the leakage of identity privacy has become a serious security risk. Attackers may exploit identity forgery to conduct unauthorized access, initiate phishing attacks, and engage in other malicious activities, which severely undermines the foundation of digital trust systems. Current mainstream anonymous communication solutions often suffer from an imbalance between privacy protection and identity traceability. For example, excessive anonymization can enable wrongdoers to commit crimes under concealed identities. To address this, we propose HIDE, an anonymous Hop-by-hop Identity authentication scheme based on Dynamic address label Embedding that conceals the sender’s identity while enabling identity auditing. Our scheme introduces address labels, which bind encrypted private identity information to the address. By dynamically generating different source addresses at each hop, it effectively hides the sender’s real identity while maintaining authentication capability. This method not only safeguards identity privacy but also enhances the security and reliability of transmission services. Experimental results demonstrate that the proposed method maintains network service quality with minimal impact while enabling incremental deployment, which substantiates its practical utility and operational effectiveness in practical applications.