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[Note to moderators: there is nothing in here offensive, linking to anything, or even untrue.]
Hackers have always traditionally had handles, or aliases by which they went. They did this for many reasons. Many of them were kids or interesting types and liked an assumed identity. Many liked their privacy. Other reasons exist.
Regardless, handles soon became practical. As phreaking became popular (amongst some), it created a subculture language (which eventually trickled into hacker language and finally to the term 3l337[elite] or l337 [lite, pronounced "leet"]). This language spawned all sorts of twisted expressions and conventional terms, some obscene, which found its way into handles.
Soon phreaking was known by the powers-that-be (the telco monopoly in the United States and other authorities) and handles became one way to hide identity when talking to strangers over the phone network.
Eventually hackers came onto the scene and had BBS's which one could dial into. A lot of phreakers had grown into hackers or even crackers/software pirates, and populated boards frequently. Hackers had (and still do) their own jargon, mostly from programming , system administration, and machine implementation details. But hackers soon used handles too - partly to cover their identity on the boards. The boards, you must understand, could be like exclusive clubs where anything from trivial rants to illegal dealings could be made. Or the boards could simply be gathering places for communities. Either way, handles linked one to the community and established a virtual identity in an emerging virtual space.
Then somewhere along the line a few kids got into trouble. In isolated incidents, young hackers/phreakers started playing games on serious systems (rudimentary stock quoting services, email, university computers, the national phone network, etc.). These hackers sometimes got caught and sometimes were stupid enough to admit they knew intimate details and had the ability to bring down software infrastructure. So having a handle become a necessity. One could give up virtual meetings with suspicious users and leave behind exploring complex systems (as many did), or assume another identity, largely for personal reasons.
Some hackers used USENET. For a long time it was a professional forum and used real names, along with real email addresses. But some of these members were so popular that hackers in other, less public places started terming them by nicknames, as was their habit with everything. So many real hacker names were shortened (possibly into three characters) or entirely new names were created. The nicknames sometimes were handy and well known, so they were generally adopted.
Today the reasons for a handle are more conformity for most (i.e. it is the "thing to do") and AOL once popularized it with screennames. The lure to assume another identity is strong for some. For others privacy still matters most.
My particular handle comes from the Java Anonymous Proxy Project (JAP). It is one attempt to create an anonymous intermediate server through which the actual clients are not detected. Of course, there is a bit of irony in this whole concept - because for networking and communication to occur, there must be unique indentities. So really there can never be a completely anonymous proxy and some indentity has to be used. Hence anonproxy is an identity named after the concept of hiding identity. Similarly, dev/null is a location which represents no location.

You think people on forums have weird and wonderful names...check out IRC!=o)
anonproxy:
Hmmm....I always wondered where your name came from.Balram:
Let us know what you change it to!Regards,
3Dave (aka thr33dave aka tequila dave aka dubbs)

And I thought it was just for fun,
dang,
someone always makes it serious,
and by proxy takes out the fun.
,,"sometimes a cigar is just a cigar",,,, freud

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