Online privacy is a concerning issue affecting the modern world. If you’ve ever Googled ‘how to trade Bitcoin privately in 2020’, this article is absolutely for you.
Why do you need to trade Bitcoin privately?
Bitcoin has been one of the most profitable investments over the last decade, garnering a solid reputation in the financial sphere. By design, it is one of the most transparent currencies in the world and while this is positive from some perspectives, it also means it’s highly traceable.
You can’t hide anything on the Bitcoin blockchain – not your balance, transaction history, your address nor the addresses of any recipients.
The traceability of Bitcoin is not positive for those who are keen on privacy – they feel that you should not take the risks that come from your financial status being publically available. The reason for this is that there is a high probability that you will be targeted by hackers, as it’s not hard for them to trace the information back and discover your real identity, which can obviously have serious real-life consequences.
If you want to trade Bitcoin safely, it’s better to start looking at how to trade Bitcoin privately and make sure that your funds are properly protected.
How to trade Bitcoin privately in 2020 – The Ultimate Guide
How to trade cryptocurrency anonymously: No-KYC exchanges
The first thing you learn about how to trade Bitcoin is pretty simple – it’s that you do it on a crypto exchange.
There are many types of exchanges but you can break them down into two categories, ones that require KYC (know your customer) information and ones that don’t. KYC is the policy that asks users to show evidence of their identity. This might come in the form of an identity card or passport, you may have to provide a picture of yourself, Resident Evidence and/or Financial Evidence. Financial institutions conduct the KYC process to keep a record of those using their services and thus discourage fraudsters or money launderers. As a consequence, users’ information is collected and stored on-site and is therefore vulnerable to cyberattacks.
Crypto exchanges without KYC requirements, also known as no-KYC exchanges, do not ask for that evidence. You just need an email to sign-up an account, then you can deposit some funds and start trading assets. As a result, you do not need to trust the exchange with your true identity as it won’t be stored anywhere.
Best no-KYC exchanges
Changelly.com, Shapeshift.io, and Changenow.io are all worth considering.
Pros
No KYC required: It’s easy to trade, deposit and withdraw on these exchanges.
Cons
Fewer payment methods: You can only buy Bitcoin via Altcoins or Visa/Mastercard; other payment methods are not accepted. Due to this inconvenience, many users want to know how to sell Bitcoin for cash.
How to sell Bitcoin for USD: Peer-to-peer (P2P) platforms
Peer-to-peer (P2P) platforms are a marketplace where the buyers meet the sellers and make deals.
This way, the platform plays the role of a third party for buyers and sellers and it makes its revenue from charging fees.
Some popular P2P platforms have a wide range of users from all over the world, so you can easily find a partner from your country who may accept a cash payment. This method will enable you to sell Bitcoin in exchange for fiat currency, which makes the transaction untraceable.
Best P2P platforms
LocalBitcoins.com and LocalCryptos.com are the most popular platforms.
LocalBitcoins is a Finnish company that was established in 2012. LocalCryptos (formerly LocalEthereums) started its business in 2017. These platforms have stood the test of time and have accrued many loyal customers.
Pros
- Diversified payment methods: Wire transfers, credit cards, cash, and coins are accepted on P2P platforms. You can choose any of them and easily make a payment.
- Safety: There is a rating system to grade buyers and sellers, so you can rate your experience and help fellow users with your reviews.
- Competitive prices. Sellers come from many countries and there are a variety of prices for you to choose from. It’s easy to find an affordable price with conditions that suit.
Cons
- The platform is only a third party – you must deal with the partner yourself.
- Although there is a rating system, users can still be scammed.
- High fees: Sellers need to pay extra fees for the P2P platform, meaning that the overall price is sometimes higher than the going market rate.
How to trade Bitcoin privately: Anonymous cryptocurrency wallets
The purpose of anonymous cryptocurrency wallets is to send and buy crypto anonymously. Unlike regular crypto wallets, anonymous ones break the link between Bitcoin addresses. Hence, you can obscure your transaction details and protect your personal data.
An anonymous crypto wallet is best suited for trading Bitcoin person-to-person. The process is simple: you buy Bitcoin with cash and the seller sends you coins through a private wallet. As a result, the transaction is obscured and no one can see there was a trade between the two addresses.
Best cryptocurrency wallet
If you are looking for the best cryptocurrency wallet right now, the Incognito Wallet is definitely worth considering.
The Incognito wallet turns your coins into privacy versions of your assets that can be stored or sent without anyone knowing. It only takes one tap to switch Bitcoin (BTC) into privacy Bitcoin (pBTC) at a conversion rate of 1:1, and another tap will switch it back to being regular BTC.
Another benefit is that the Incognito Wallet is totally free and optimized for mobile, so you can trade crypto on your phone wherever you have an internet connection.
Download the wallet: iOS | Android
Learn more at https://incognito.org/
Pros
- Complete anonymity: This kind of crypto wallet guarantees your privacy and takes care of your data. You won’t become the target of hackers when transacting money on the Internet.
- No extra fees: As previously mentioned, you don’t need to pay anything for using the Incognito Wallet. Therefore, you can buy Bitcoin at an affordable price.
- Convenience: You can carry your crypto wallet everywhere and make transactions at any time.
Cons
- The truth is that anonymous crypto wallets are relatively new to the game and aren’t as popular yet as normal wallets, so your usual trading partners might not have one yet.
How to sell Bitcoin for cash: Bitcoin ATMs
It would be wrong to talk about how to trade Bitcoin for cash without mentioning Bitcoin ATMs. These machines allow you to purchase Bitcoin using fiat currency and there are also two-way Bitcoin ATMs, where you can sell your Bitcoin for cash.
In addition, some of these machines don’t require the KYC process – which means you can trade for BTC or cash without ever revealing your identity.
Best Bitcoin ATMs near you
If you want to find your closest Bitcoin ATM, just check out CoinATMradar for all nearby available options.
Pros
Cash payments: Bitcoin ATMs accept cash, making it the easiest way to buy and sell Bitcoin.
Cons
- High fees: These machines charge between 7-10% for each purchase. In short, the more you trade, the more you’ll have to pay.
- In order to follow financial regulations, Bitcoin ATMs in many countries now require KYC identification. As a consequence, you will need to risk your privacy if you use one.
- Uneven distribution: You can find many Bitcoin ATMs in the US, but in the rest of the world it can be a bit of lottery.
How to trade Bitcoin privately: Useful tips
Always use privacy browsers
Privacy browsers such as Tor or Brave (which is also a blockchain project) not only block ads but also protect your web browsing history. As they don’t store your data, they are a useful tool for obscuring your identity online.
Keep your information to yourself
There are many methods and tools you can use to defend your privacy, but they are useless if you publicize any of your financial information yourself. Never broadcast your wallet address or financial status on social networks without a very good reason to do so.
Do your homework
The technology field is constantly growing, so while there are new ways of preserving privacy coming up all the time, older tricks might become redundant. Always keep up to date with the crypto sphere and find out how to trade bitcoin privately to protect yourself at any time.
Our final thoughts regarding how to trade Bitcoin privately in 2020
As we have detailed throughout this article, privacy is an important part of keeping safe online and removing yourself from the line of fire when it comes to cyberattacks.
Trading Bitcoin in any sort of quantity on a public exchange will result in your details being publicly and immutably recorded, and that’s a danger. We highly recommend using at least one of the methods listed to stay safe if you’re wondering how to trade bitcoin and other cryptocurrencies privately. Good luck out there.