Going forward with the 1.7.6 update, players will now be identified and tracked by a Unique User ID (UUID) instead of by the player name. This is needed so that when Mojang implements the ability to change names after 1.8 is released, player's can't avoid being blacklisted simply by changing their name.
According to Mojang developer Nathan "Dinnerbone" Adams, player names will still be unique so that the same name cannot be used by two different players. A unique player name can only be made available when the player that owns the name changes to a different name.
The 1.7.6 release also comes with the new skin system that includes the ability to edit the left and right arms of characters independently, a new "Skin Customization" button in the options menu and uses a new default Steve skin with a 64x64 layout.
Note that 1.7.6 is not compatible with previous versions of Minecraft due to the changes in the naming system. The 1.8 update is still in the works though and will make updates to the Survival mode and add numerous new blocks and items.
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