Buying Bitcoin Anonymously

Buying Bitcoin Anonymously

The post Buying Bitcoin Anonymously appeared first on Coinpedia – Fintech & Cryptocurreny News Media| Crypto Guide

With today’s regulated world, to buy and send bitcoin privately is nearly impossible. If you need to buy bitcoin without ID verification, there are only a few options available. Bitcoin ATM, Person-to-person purchase, or Peer-to-peer marketplace. Let’s take a look at each option in more detail.

Bitcoin and anonymity

Bitcoin is no longer a tool for geeks. It has become a fully-fledged currency used by masses, with the trading volume of the entire cryptocurrency market exceeding trillions. No wonder that the governments want to control it.

Lawmakers around the world are introducing tighter regulations on crypto trading, making it practically impossible to buy cryptocurrency without providing proof of ID. 

While only a few years ago you could buy bitcoin without an ID easily, nowadays, it is no longer true. Even though crypto is still reasonably unregulated in the US, US-based exchanges require ID verification. The same applies to crypto exchanges worldwide. To comply with regulations, most of them require proof of ID. 

Even though bitcoin is referred to as being an anonymous currency, it is more accurate to characterize it as pseudo-anonymous. Your bitcoin address is a pseudonym. Every bitcoin transaction you make is permanently stored in a public ledger known as the blockchain. If your bitcoin address, or pseudonym, is ever linked to your real identity, thanks to the blockchain, all your past transactions could be traced back to you. 

There is a handful of blockchain intelligence tools that give insight into how people spend their crypto holdings. These tools are commonly used by banks, government institutions, and intelligence agencies around the world to facilitate Anti-Money Laundering (AML) and Know Your Customer (KYC) initiatives.

If you want to buy bitcoin anonymously without ID verification, there are only a few options left:

Bitcoin ATMs

Bitcoin ATMs are still one of the most convenient ways of buying bitcoins anonymously. At the time of writing this article, there’s thousands of Bitcoin ATMs in 75 countries around the world. There’s likely at least one Bitcoin ATM in your country.

To buy bitcoin anonymously via ATM, all you need is cash. Unless you exceed a specific threshold, Bitcoin ATMs do not require ID verification. The limits for verification requirements vary from country to country and from ATM to ATM. For example, in Austria, you can buy up to 10,000 EUR in bitcoin anonymously, without ID verification.

Using Bitcoin ATMs is relatively simple. First, Bitcoin ATM asks you to scan your receiving address. In the next step, you deposit cash, and the ATM transfers an equivalent amount of bitcoins to your address. If you don’t have a receiving address, some ATMs can even generate a paper wallet for you. 

If there are Bitcoin ATMs in your area, we strongly recommend them for buying bitcoins anonymously. Bitcoin ATMs are fast and convenient. To find one in your area, go to Coinatmradar.com.

Person-to-person

Person-to-person purchase is convenient, yet one of the most underused ways to buy bitcoin anonymously, without an ID. As more and more people own cryptocurrency nowadays, you likely know someone, directly or among your friends on social media, who holds bitcoin.

If you do, you can ask him to sell you bitcoins directly. Since the seller might save money on taxation, you can try to negotiate a better selling price. If the hodler does not want to sell, you might need to offer him a special deal for a higher-than-trading price—yet, it might be worth for the anonymity you get. In the end, even Bitcoin ATMs charge around a 6% fee for their service.

Caution: When buying bitcoin from another person, make sure to give him the money only after receiving at least one confirmation. Since the validation should not take longer than 30 minutes, it’s an excellent opportunity to talk bitcoin over a cup of coffee.

Peer-to-peer marketplace

Peer-to-peer (P2P) marketplaces, such as LocalBitcoins or Paxful let you buy bitcoin anonymously from other users directly, without the middleman. The fees are set by the sellers, while the marketplace acts as an escrow service.

Depending on the individual seller, you can pay in cash or send money via wire transfer, PayPal, SEPA, or direct bank deposit. Online payment methods are also available. If you don’t want to link trades to your identity, however, we don’t recommend to use these.

The advantage of P2P marketplaces is that they are local, letting you negotiate the deal with the sellers online while executing the actual trade offline. Many sellers don’t require you to provide an ID upfront, so you can arrange to meet up in person and pay cash during the trade. This way, you can buy bitcoin anonymously without an ID.

Peer-to-peer marketplaces have different thresholds for verification requirements. LocalBitcoins, lets you buy bitcoin anonymously, without an ID only up to 1,000 euros. Paxful requires verification for accounts that reach the equivalent of 1,500 USD in trade volume. However, this should be not an issue if you execute the trade offline.

Buying bitcoins anonymously

Buying bitcoin without an ID is not only for the bad guys who want to pay for illicit goods and services in the hidden corners of the dark web. While there’s some truth to this idea, there are plenty of legitimate reasons why someone might want to buy bitcoin without an ID.

Buying bitcoin anonymously is for anyone who wants to keep his personal and financial information private. The increasing amount of crypto exchanges targeted by hackers and stolen user data is a strong reason for going private.

Additionally, buying bitcoin without an ID is convenient for the time savvy person who doesn’t want to go through the time-consuming ID verification process.

Finally, buying bitcoin without an ID is the only option for over 1 billion individuals from developing countries who do not possess proof of ID.

Protecting your privacy

If privacy is crucial for you, you can take these five steps to protect yourself when buying bitcoin:

  1. Create and use multiple bitcoin wallets. 
  2. To prevent individual transactions from being linked back to you, use a new receiving address for each transaction.
  3. To make it more difficult to track the payments back to you, send bitcoin or have bitcoin sent to you privately using Whir.
  4. Hide your IP address by using a VPN service or routing your traffic through the Tor network. 
  5. Skip Bitcoin entirely and use a dedicated privacy coin, such as Monero or Zcash.

Conclusion

Whatever is your reason for buying bitcoin anonymously, there are few options available. Make sure to research them thoroughly and initially, make a “test” purchase of a limited amount of bitcoin. 

Please keep in mind that even with the techniques explained above, you can still be tracked by your IP address, phone number, through the private wifi or ATM’s built-in camera.

Disclaimer: This is a guest post. Coinpedia does not endorse or is responsible for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to the company.

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