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If you only paid attention to the mainstream media, you’d likely think that buying and selling Bitcoin on the down-low was quite commonplace. The reality is that regardless of whether you are buying or selling Bitcoin, it’s not the most anonymous practice, but more on this later.
If you’re looking to buy Bitcoin with cash or without having to go through identity verification, you’re actually fairly restricted in your options. As we’ll see, even if you can buy it without anyone knowing it was you, moving it around and selling it can often give you away. In this guide we’ll discuss how you can buy BTC anonymously.
Evan Jones
Written by Evan Jones Arrow Right Cryptocurrency expert and consultant
Evan Jones was introduced to cryptocurrency by fellow CryptoVantage contributor Keegan Francis in 2017 and was immediately intrigued by the use cases of many Ethereum-based cryptos. He bought his first hardware wallet shortly thereafter. He has a keen and v...
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Jul 11, 2024
Is BTC Anonymous?
No. That’s the simplest answer here. Bitcoin is not anonymous. It is pseudonymous, meaning that your name isn’t necessarily a name, but rather a publicly visible address. Bitcoin is a publicly distributed ledger; anyone can download a copy of the blockchain and look at every transaction that has ever taken place on the Bitcoin network. Whenever any transaction is made, the sender and receiver are included in the block transaction record. While this doesn’t give anyone your identity directly, it can give them a start in figuring it out.
As soon as the address interacts with a centralized exchange or is converted into cash that hits a bank account, there becomes an easier avenue to figure out who is doing the transacting. If you never really sell your Bitcoin, it’s possible to be at least mostly anonymous, but the hard part is selling it without giving away your identity, especially if you are selling it for fiat that is going to a bank account. Buying it can be a slightly more anonymous process.
Can You Buy Bitcoin Anonymously?
Yes, sort of. There is a caveat here, and that is that to buy it anonymously you must pay in cash, and that you can’t send it to a wallet you already own.
The only real way to do this is at a Bitcoin ATM, as you can deposit cash and receive a paper wallet print out that holds your keys. This is essentially an anonymous Bitcoin wallet, as the only way to find out who bought it would be to check video recordings of the ATM and match an ID. After this anonymous purchase, the only real way to stay anonymous is to never move the Bitcoin, which somewhat defeats the purpose of having it at all. There is another catch here in that many Bitcoin ATMs only allow anonymous purchases up to a certain amount, meaning If you wanted to buy a large sum, you’d have to provide ID.
The reality of buying Bitcoin anonymously or wanting to stay anonymous when purchasing it is that it requires a lot of effort. You have to really want to stay anonymous and take a lot of extra steps to do so. This includes using a VPN, TOR, or even encrypting your computer disk and using a secure operating system such as Tails. Tails is a portable operating system that protects against surveillance and censorship. Regardless of how you are going to keep your Bitcoin anonymous, it requires technical knowledge and a real desire to stay anonymous, as it isn’t exactly easy.
What About Buying Bitcoin Without Verification?
While buying Bitcoin completely anonymously is quite, there are potentially some ways to purchase it without providing verification.
Paxful
Paxful is a leading digital currency broker, with a focus on BTC. The platform has optional KYC, but as soon as your account reaches $1500 USD in activity, there will be verification required. This makes it a good option to buy Bitcoin with cash, but only up to a certain amount.
Bitcoin ATMs
Already mentioned in the previous section, Bitcoin ATMs are a good method to buy Bitcoin without verification and for cash. The key here is finding a reputable ATM service that allows you to purchase a large amount without ID requirements. More and more Bitcoin ATMs require ID, either right away or once you hit a certain threshold. This is due to regulations. If you can find a Bitcoin ATM that doesn’t require ID, make sure to not enter a receiving address and instead let it print you out a paper wallet if you want to stay as anonymous as possible.
Peer-to-Peer Platforms
There are a variety of peer to peer (P2P) platforms where you can buy Bitcoin or other crypto assets anonymously. Sites like LocalBitcoins, HodlHodl, and Bisq are all P2P platforms where you can buy BTC and other digital currencies without having to provide ID. Most of these services use an escrow system to ensure transactions are completed, usually multi-sig wallets. You could theoretically buy a larger amount of BTC using peer-to-peer but that obviously features a considerable amount of risk.
Prepaid Cards
If you buy a prepaid credit card you can use it on sites like Paxful and the P2P platforms mentioned above. The prepaid credit card isn’t linked to your identity and so any purchases made with it are anonymous.
Risks of Buying Bitcoin Without Verification
There are some risks to buying Bitcoin without verification, mostly due to the fact that the only real way to buy Bitcoin without ID nowadays is either with cash or through P2P interactions. Both of these methods present a similar risk. With cash purchases, either directly to a person or to an ATM, there is a risk of being scammed or robbed.
P2P interactions, whether online or in-person, present the same sort of risk. Online P2P transactions are likely safer because there are platforms that use escrow to help ensure deals are completed, but this doesn’t mean there aren’t bad actors looking to take advantage of unaware buyers on these platforms.
Conclusion: Anonymous BTC is a Challenge
Overall, if you are looking to buy Bitcoin anonymously, you need to take the work required into account, as it isn’t easy.
If you are trying to stay anonymous online, with crypto, you should perhaps be looking into crypto assets that are actually private in some way, such as Monero (XMR). Bitcoin, despite general conceptions of anonymity, is not the best or easiest crypto to own anonymously, and that’s by design.
About the Author
EvanJones
Evan Jones was introduced to cryptocurrency by fellow CryptoVantage contributor Keegan Francis in 2017 and was immediately intrigued by the use cases of many Ethereum-based cryptos. He bought his first hardware wallet shortly thereafter. He has a keen and vested interest in cryptos involving decentralized backend exchanges, payment processing, and power-sharing.
Learn more aboutEvan Jones
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Written by Simon Chandler Arrow Right Contributing writer
Simon Chandler is a journalist based in London. He writes about technology, markets and politics, and has bylines for Forbes, Digital Trends, CCN, Wired, TechCrunch, the Verge, the Sun, the New Internationalist, and TruthOut, among many others.
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Written by Evan Jones Arrow Right Cryptocurrency expert and consultant
Evan Jones was introduced to cryptocurrency by fellow CryptoVantage contributor Keegan Francis in 2017 and was immediately intrigued by the use cases of many Ethereum-based cryptos. He bought his first hardware wallet shortly thereafter. He has a keen and v...
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Written by Evan Jones Arrow Right Cryptocurrency expert and consultant
Evan Jones was introduced to cryptocurrency by fellow CryptoVantage contributor Keegan Francis in 2017 and was immediately intrigued by the use cases of many Ethereum-based cryptos. He bought his first hardware wallet shortly thereafter. He has a keen and v...
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April 21, 2024
Written by Evan Jones Arrow Right Cryptocurrency expert and consultant
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Written by Evan Jones Arrow Right Cryptocurrency expert and consultant
Evan Jones was introduced to cryptocurrency by fellow CryptoVantage contributor Keegan Francis in 2017 and was immediately intrigued by the use cases of many Ethereum-based cryptos. He bought his first hardware wallet shortly thereafter. He has a keen and v...
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March 15, 2024
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