Blockchain technology has emerged as a revolutionary paradigm for secure, transparent, and tamper-resistant data management. It offers a decentralized ledger where transactions are validated and recorded across a distributed network of nodes, eliminating the need for centralized authorities. Despite its widespread adoption across diverse domains—such as finance, supply chain, healthcare, and digital identity—blockchain still faces significant challenges in ensuring complete security and privacy. This paper addresses these challenges by proposing a novel security and privacy algorithm designed specifically to enhance blockchain resilience against evolving threats. The proposed approach integrates hybrid cryptography, pseudonymous identifiers, and an optimized consensus mechanism to achieve a balanced trade-off between security, privacy, and computational efficiency. The hybrid cryptographic model combines symmetric and asymmetric encryption techniques to safeguard transaction data at multiple layers. Symmetric encryption ensures fast and secure data exchange, while asymmetric keys are used for identity verification and secure key distribution. To further strengthen user anonymity, the algorithm incorporates pseudonymous identity management, which replaces permanent public keys with dynamically generated pseudonyms. These pseudonyms are refreshed periodically to prevent link ability between consecutive transactions, ensuring that individual identities remain hidden even if certain nodes or data patterns are compromised. Additionally, the optimized consensus protocol enhances transaction validation efficiency by reducing redundant computations and improving synchronization among nodes. This approach minimizes latency and energy consumption while maintaining strong resistance against consensus-based attacks such as 51% or Sybil attacks. Extensive simulations and experimental evaluations were conducted to measure the algorithm’s performance under various network conditions and adversarial scenarios. The results demonstrate that the proposed model significantly improves transaction validation speed and reduces cryptographic overhead compared to traditional Proof-of-Work and Proof-of-Stake systems.