Do you want to avoid identity theft and wish to stay anonymous? Here we're going to reveal the easiest methods to buy Bitcoin without ID verification.
The popularity of Bitcoin is now without question. Since its release, Bitcoin has brought a breath of fresh air to the finance industry as it can be used as a new form of tradable asset, investment, and payment method. Lately, Bitcoin also plays a role in solving complex problems in our day-to-day lives, making things simpler and faster.
One of the notable features of Bitcoin and other cryptocurrencies is that they can provide safety for their users because of their decentralized nature. However, it is worth noting that despite its reputation, Bitcoin is not entirely anonymous.
Every Bitcoin transaction is written on a publicly shared global ledger called blockchain, and most transactions are linked with the investor's real identity, though indirectly. As long as you leave a trail such as your physical address, phone number, or email address, you lose anonymity. Hence, it's only a matter of enough dedicated time and resources to trace each transaction and de-anonymize your activities.
Also, if you buy Bitcoin via a centralized online exchange, they would require you to do the Know Your Customer (KYC) process, which involves submitting personal information and identity documents. This step is actually meant to prevent fraud and money laundering activities, but some crypto holders may prefer to skip it and stay anonymous.
If you are one of those people who wish to make anonymous transactions for further safety and comfort, today we're going to unfold all of the possible options along with their pros and cons.
- Why Stay Anonymous?
- 4 Ways to Buy Bitcoin Anonymously
- Places that Let You Buy Bitcoin without ID Verification
- Anonymizing and Recovering Your Bitcoins
- Final Thoughts
Why Stay Anonymous?
The main reason why staying anonymous is attractive for traders is safety. At this point, we already know that Bitcoin is not exactly anonymous in nature. Instead, the blockchain is often known as pseudonymous because it only shows public addresses, which can protect your privacy to some extent. But if your address is ever linked to your identity, every activity that you did with that address will be linked to you.
It means that anyone with enough time and resources will be able to see all of your transactions, including how many bitcoins you have, exactly when you received those coins, who you received those coins from, and who you sent those coins for. After all, Bitcoin is no cheap investment. Someone who owns a lot of crypto coins might be a target to some hackers, especially considering that a limitless amount of Bitcoin can be stolen at once. Therefore, it is most understandable that Bitcoin holders would want to protect their identity.
Some people may prefer keeping their financial information private for other reasons. People who are involved in espionage activities would be interested to stay anonymous, but other than that, there are many legitimate reasons to stay off-grid. For instance, verifying your identity in crypto exchanges would take some extra time because you would have to submit the documents and wait for the verification process. Therefore, staying anonymous can cut time and make transactions more effective. Also, customers may simply don't trust the exchange platform or are not able to provide identity proof due to their location.
4 Ways to Buy Bitcoin Anonymously
Before exploring the options, keep in mind that getting extra anonymity comes with a cost. The following methods are around 5-10% more costly than other conventional methods of buying Bitcoins.
1. Peer-to-Peer Transaction
Perhaps the easiest way to buy bitcoin anonymously is by doing it with cash and in person. As more and more people own Bitcoin, it becomes easier to exchange Bitcoin directly with another person these days. You'd be surprised to find that a lot of them might sell at the exchange price or even lower than the market price, as they will be saving money on the taxation.
Furthermore, you can also use peer-to-peer platforms like Paxful to find someone who is willing to sell Bitcoins for cash nearest to your physical location. To stay anonymous, use an alias email address to sign up to Paxful. You can choose to skip the verification id process as it is optional. When you buy via cash, it's easy to remain untraceable because there's no documentation or physical proof of the transaction.
Even so, keep in mind that most sellers on Paxful typically don't like to do business with anonymous buyers. But since you're paying in cash, it should be less of a problem.
2. Bitcoin ATM
Another way to obtain Bitcoin anonymously is through Bitcoin ATMs. You should just find and go to the nearest BTC ATM and buy the coins with cash. However, not everyone has a BTC ATM near them, so make sure that there's one in your area. To locate a nearby BTC ATM, you can use Coin ATM Radar for global users or use CoinFlip if you are in the US.
Some BTC ATMs don't require you to submit your identity and any facial or fingerprint identification. If it asks you to enter your Bitcoin address, you can choose to specify that you don't have one by selecting "don't have an address" option. The ATM will then generate a paper wallet for you. Once you're done, you can import the private key from that paper wallet and send the coin wherever you like.
Note that it's not as convenient as buying digital coins online, since you must go to the ATM to make transactions. Another downside is that Bitcoin ATMs tend to charge relatively high fees. Each transaction may cost around 7-10% of the transaction.
3. Using Prepaid Card
You can also stay anonymous by using a prepaid credit card, which you can easily get at any supermarket or convenience store. These cards already have a certain amount of balance that isn't linked to any of your personal accounts. Therefore, you can use the money loaded on them to buy Bitcoin without having to give away any vital card information to your seller.
4. Decentralized Exchanges
Due to popular demand, many exchanges now offer anonymous buying or selling of Bitcoins. Most of them are decentralized exchanges, which mean it connects buyers and sellers directly; there's no intermediary to facilitate the trade. Decentralized exchanges have several security options such as escrow services, security deposits, and arbitration to ensure no one gets scammed.
In decentralized exchanges, both buyers and sellers can create offers and make transactions once they agree on a certain price. As a buyer, you can create an offer with the amount that you're willing to spend and choose your payment method. Or you can browse seller offers, including the price, the amount they have, and the payment methods they accept. Once both parties agree, you send the money to the seller and the crypto coin will be sent to your wallet.
Where to Buy Bitcoin without ID Verification?
From decentralized exchange to peer-to-peer platforms, here are some recommendations to stay anonymous when purchasing or selling Bitcoin:
Founded in 2014, CoinCorner is a Bitcoin exchange that is located in the Isle of Man and one of the first places that allow users to buy Bitcoin with a credit card. CoinCorner claims itself as both a virtual crypto shop and bank all-in-one. In CoinCorner, you can buy and sell, send and receive, as well as transfer and store cryptocurrency. Additionally, the company offers a mobile app that allows users to make Bitcoin transactions from their mobile phones. One of the advantages of CoinCorner is the quick and simple transaction. CoinCorner provides services for several countries all around the world, not including the US.
There are two kinds of fees offered, namely deposit fees and trading fees. However, the total cost for each transaction depends on which payment method you use and how much Bitcoin that you will buy and sell in the long term. One thing to note in terms of anonymity is that CoinCorner is a regulated exchange, so you must go through the KYC process to buy digital currencies like Bitcoin. However, you can purchase up to €1,000 without any photo or ID verification.
Bitquick is an exchange to buy and sell Bitcoins that was established in 2013. Bitquick essentially acts as an escrow for Bitcoin transactions via cash deposits at thousands of banks across the US.
In Bitquick, there is no verification needed to buy or sell Bitcoins. A mobile number is needed to make transactions, but no ID verification is required. The concept is actually pretty simple. Users must agree on a certain price, then the seller would deposit the coins at the exchange. Once the buyer sends the cash into the seller's account and the seller confirms it, the coins are immediately released and sent to the buyer's address. This process usually takes about 3 hours or less.
HodlHodl is another well-known P2P Bitcoin exchange that acts as an escrow service. The company basically lets users trade directly with each other without holding the funds. Instead, HodlHodl uses a multi-sig escrow which aims to minimize issues and possibilities of asset theft. It can also reduce trading time. Since the company does not hold any users' funds, they are not liable to any procedure such as KYC and ID verification. They simply act as a completely decentralized platform for exchange.
Bisq, or previously known as Bitsquare, is an open-source, peer-to-peer marketplace that allows you to purchase and sell virtual currencies in exchange for fiat money. The exchange currently supports no less than 126 cryptocurrencies including Bitcoin, and is available across many devices such as Windows, Mac, and Linux.
Bisq is a fully decentralized exchange, so it requires no name, ID photo, or verification to use. The company doesn't hold any Bitcoin on their server, so similar to HodlHodl, all of the users' coins are held in multi-signature addresses rather than a Bisq-controlled wallet. Bisq also doesn't hold any fiat currency because the money is transferred directly from one user to another.
Another popular method of buying Bitcoin anonymously is through Changelly, a crypto exchange platform where you can purchase, sell, swap, or exchange more than 196 cryptocurrencies. As a non-custodial exchange, Changelly never stores users' funds on its servers, which means you have to use your own wallet to make a transaction. There are two different account types you can choose: one for beginners and one for expert traders. The company is widely known for its quick transactions, variable payment methods, and good customer service.
To use the service, you just have to enter your email address and choose the crypto coin that you want to buy. You will then be required to input your wallet address. After the transaction is confirmed, the coins will be sent to the address. You will receive the coins in the next 5 to 30 minutes.
LocalCryptos is one of the top P2P exchanges in the market, which facilitates Bitcoin, Ethereum, and Litecoin transactions in more than 130 countries worldwide. The company was formerly known as the LocalEthereum marketplace but has rebranded to LocalCryptos in late 2019. It was initially known for buying and selling only Ethereum, but later it added support for Bitcoin and Litecoin as well.
Similar to the previous exchanges, LocalCryptos is also a non-custodial platform and only works as an escrow manager for its users. Hence, there won't be any ID verification necessary to make a transaction on the platform. You can search Bitcoin sellers rather easily and make a trade either online or offline.
There are at least 40 payment methods to choose from, including pay in cash or send money via wire transfer, PayPal, SEPA, or direct bank deposit. The fees are also relatively low, which are 0.25% for the market maker (the person posting the offer) and 0.75% for the taker (the person responding to the offer).
7. Mycelium Local Trader
Mycelium Local Trader is a part of MyCelium, which is a popular Bitcoin wallet. This is a feature that is available on the MyCelium mobile app and is available globally.
Simply put, Mycelium Local Trader is a Bitcoin marketplace that allows users to publish their ads of Bitcoin being offered for sale at their desired prices. The app will use your phone's location to find you nearby sellers and adjust the available price in your local currency. Once you find the right price, you can meet the seller to exchange the Bitcoin. Since this feature only connects the buyer and seller and doesn't hold any of the users' funds, there is no requirement for IDs or verifications.
8. Wall of Coins
Wall of Coins is another marketplace that offers peer-to-peer cryptocurrency exchange and allows you to buy Bitcoins without giving away your identity. Wall of Coins operates in several countries including the US, Canada, Brazil, Germany, Latvia, Poland, and the Philippines. The company mostly uses a cash-based system where the buyer has to go and deposit cash in a bank. Once you agree on a certain offer, the seller would give you their bank account details. Some of the benefits of using Wall of Coins are zero transaction fees, web API, and cold storage reserves to store funds.
Anonymizing and Recovering Your Bitcoins
If you own Bitcoins that have already been identified as yours or linked to your personal identity, you shouldn't panic because there are ways to break that link and make the coins anonymous again. If done correctly, any future transaction related to that specific Bitcoin won't be connected to you anymore.
Tumbling Coins through Mixers
In order to anonymize your coins, you can use mixers or tumblers. Basically, what you do is send the coins that you wish to anonymize to the mixer and it will send the same amount of coins minus a fee to a new address you choose. The major drawback of this feature is perhaps its centralized nature. You need to trust the mixing company to give back your coins and not keeping any records of the performed mixing transactions. The latter is a bit tricky because you never know for sure what they are doing with the data. For further safety, it's best only to use darknet mixers such as BitMixer.io or Grams' Helix.
Mixing with Altcoins
Instead of mixing your Bitcoin with another Bitcoin, you can actually add another layer of obscurity by mixing it with altcoins. This method would require less trust than using a centralized mixing service. The most recommended altcoin to use for this purpose is perhaps Monero (XMR).
The way to do it is pretty simple. First, you have to convert BTC to XMR, then forward them to a new Monero address under your control. After that, convert them back to new and anonymous BTC.
Bitcoin is not entirely anonymous in nature, but it's possible to buy or sell Bitcoin anonymously. There are a number of methods to choose from; each is followed with certain benefits as well as risks and different levels of anonymity that you need to be aware of. Many investors fall into the hands of frauds and scammers when they try to find a way to make their activities anonymous. As the crypto market is mostly unregulated, there won't be any official authority that could protect you if such things happen. Therefore, you must be really careful when selecting the method and make sure to pick a reliable platform to facilitate the transaction. Remember that above all, the most important thing is your safety.
When it comes to scams and frauds, a good way to avoid them is by learning from past incidents. Here are some notable stories of top Bitcoin scams you should watch out for.