If you are concerned about privacy when trading Bitcoin and look for a way to protect your identity, this article is a must-read as it’ll show you how to buy Bitcoin anonymously.
Why you might want to know how to buy Bitcoin anonymously
Reason #1: Bitcoin isn’t completely private
You might be surprised but it is true that Bitcoin is neither completely private or anonymous. As an application of Blockchain, a technology that supports transparency, Bitcoin plays by the rule of keeping everything clear within the network.
As a result, all Bitcoin transactions are recorded on a public ledger and can be viewed by anyone. The data stored includes the amount of transaction and Bitcoin addresses of the sender and the recipient. However, this information doesn’t contain any specific identity.
Reason #2: Bitcoin transactions are traceable
Even though Bitcoin transactions don’t reveal your personal details such as email or physical address, they are possible to be tracked. That’s why Bitcoin is considered pseudo-anonymous.
When you provide information for KYC authentication on licensed exchanges, your identity can be linked with Bitcoin addresses. Therefore, this data may be at risk of hacker attacks. If someone has enough time, determination and resources, they could find out the amount of bitcoin and transaction history of an individual.
For these above reasons, Bitcoin users should take precautions and learn how to buy Bitcoin anonymously to prevent your identity from being associated with your transactions and addresses.
How to buy Bitcoin without anyone knowing
1. Buy Bitcoin with cash
The easiest and most private way to buy Bitcoin so far is purchasing with cash and in person. Apparently, when you use cash, there is no documentation for the transaction so it’s easy to stay anonymous. There are a couple of methods for in-person cash trades.
Paxful – Buy Bitcoin from a local individual
To find a Bitcoin seller nearby, you can visit Paxful, a peer-to-peer marketplace to sell and buy Bitcoin with various payment options. If you want to remain untraceable, you can use an alias email to register to Paxful and search cash offers available.
The platform has the optional verification ID process so you don’t have to worry about your identity being obtained. Just keep in mind that most sellers on Paxful may want to know who you are.
Another way to purchase Bitcoin with cash is by using Bitcoin ATMs. Although not everyone has an ATM next to them, this is one of the best ways to buy Bitcoin anonymously.
Bitcoin ATMs don’t require identification but they will ask for your Bitcoin address. In such cases, just determine that you don’t have one. The ATMs will then generate a new paper wallet for you. Later on, you can import the private key from that wallet and send those bitcoins to your storage.
However, this method has some downsides. Most Bitcoin ATMs charge a relatively high fee (around 7% – 10%). In addition, these machines also limit the amount of bitcoin one can buy.
2. Buy Bitcoin online without verification
If you wonder how to buy bitcoin anonymously but prefer not leaving home, you can definitely try out online options. The methods below allow you to trade fiat currency for bitcoin without ID verification. However, it is highly recommended that users use disposable prepaid cards to make transactions.
If you’re new to the crypto sphere and want to learn how to buy bitcoin anonymously, this site is a must-try. CoinMama lets users purchase their first $150 worth of bitcoin using a debit or credit card without a verified ID.
This is obviously a great deal for beginners to make their way into the crypto space as the limit required is so low.
LocalBitcoin is perhaps the largest and most popular P2P crypto exchange. If you’ve been in this field for a while, you definitely have heard about it.
The site links you up with a seller on an individual basis. Similar to Paxful, there are different payment methods for you to choose, from bank transfers to PayPal. LocalBitcoin used to have cash payment but from June 2019, this method was officially removed. The transaction fee will be set by each seller.
LocalBitcoin plays a role as a marketplace rather than an escrow platform. Thus, it is non-custodial and doesn’t own your wallet. You just need to check the reputation of the seller to avoid scams.
Bisq is a fully decentralized marketplace for cryptocurrencies like Bitcoin. It requires no name, email address or ID verification so you can absolutely stay anonymous. For an extra security layer, Bisq also uses Tor and doesn’t hold fiat or bitcoins on their server or in their accounts.
Bisq is a desktop application that is available for Windows, iOS and Linux. All you need to do is to download and install it on your computer. Currently, Bisq supports 126 cryptocurrencies, including Bitcoin.
3. Trade other cryptocurrencies for bitcoins on anonymous exchanges
Don’t prefer fiat currency? There are several exchanges that enable you to trade cryptocurrencies for bitcoins.
Shapeshift or Changelly Exchange
If you have altcoins like ETH, DASH or LTC, you can buy bitcoins on these exchanges in seconds without any ID verification.
You may need to register with an alias email address on Changelly, while Shapeshift doesn’t ask for one. If you are experienced crypto users, this method is absolutely more convenient than using fiat currency as it doesn’t require going out in person or a prepaid card. Moreover, buying bitcoins from exchanges like these is useful for large trade volume.
4. Use a privacy wallet, why not?
Do you think a crypto wallet is just for storing coins? Well, the answer is not really.
There are many types of wallet that allow you to send and buy crypto anonymously. Of course, you need to know where to buy from first because these wallets don’t do the task of connecting buyers and sellers. This is merely a method to keep your transactions untraceable.
One of the best privacy wallets that helps you remain anonymous when buying bitcoin is Incognito Wallet.
Incognito is a sidechain for privacy coins, which connects to the Bitcoin (and other cryptocurrencies) blockchain via a trustless portal. Using smart contracts and trustless custodians, the platform issues a privacy version of Bitcoin (pBTC) at a rate of 1:1. These privacy coins can be switched back to normal BTC later on without involving any third party.
When you turn on “Incognito mode” for your crypto assets, no one can see your balance or the details of any transaction. Therefore, you have full control of your personal data and assets, making it possible to send, receive and store bitcoins in anonymity.
How to buy bitcoin anonymously with Incognito
As Incognito converts any cryptocurrency to its privacy version and vice versa, buyers can obtain bitcoins privately by receiving pBTC from sellers then switching those coins back to BTC themselves.
In case the seller doesn’t have pBTC in their wallet, they can deposit BTC directly to the buyer’s address. These coins will automatically turn into pBTC so no one can view your account balance.
Closing thoughts on “how to buy Bitcoin anonymously”
Hope this article has provided you with an ultimate guide to how to buy Bitcoin anonymously. Whatever method you choose for your future transactions, make sure it fits your purpose and trade volume.