For years, mainstream media has falsely claimed that bitcoin is an anonymous digital currency that cannot be traced. However, that is not correct. All bitcoin transactions can be publicly viewed on the Bitcoin blockchain and wallet addresses can be linked – through various newly developed methods – to the real-world owners of these addresses. Fortunately, for bitcoin users who prefer to keep their financial transactions private, there are several ways you can buy bitcoin anonymously without I.D. verification.
In this guide, you will discover four ways how you can buy bitcoin anonymously so that you can retain your financial privacy while purchasing bitcoin.
Buy Bitcoin via an ATM
The easiest and most convenient way to purchase bitcoin anonymously is using a Bitcoin ATM. A bitcoin ATM functions in a similar way as a traditional cash machine with the difference being that you can buy bitcoin with fiat currency (and at some ATMs also sell bitcoin for fiat currency).
The majority of Bitcoin ATMs allow purchases without I.D. verification under a specific amount. The amount varies from country to country but is usually under around $500 per transaction. Bitcoin ATMs, therefore, enable anyone with cash-in-hand and a bitcoin wallet to buy bitcoin anonymously provided their purchase remains under the verification limit.
Moreover, to keep your bitcoin purchase as private as possible, it is recommended to use an anonymous mobile bitcoin wallet that does not require any identity verification either.
The main issue with buying bitcoin anonymously using a Bitcoin ATM is that purchasing a large amount of cryptocurrency anonymously is effectively impossible as each transaction needs to be under the verification limit and it is not feasible to spend hours at an ATM doing dozens of small transactions after another. Moreover, doing that could attract the wrong kind attention if the ATM is located in a cafe or a bar.
Bitcoin ATMs are, therefore, more suited for smaller anonymous bitcoin purchases than large transactions.
Buy Bitcoin with Cash via Peer-to-Peer Exchanges
Alternatively to buying bitcoin anonymously using a Bitcoin ATM, you could also buy bitcoin anonymously with cash using a peer-to-peer exchange.
The leading peer-to-peer exchange, LocalBitcoins, for example, offers in-person cash transactions that allow users to directly buy bitcoin using cash upon meeting their trading counterparty in person.
To buy bitcoin on LocalBitcoins, all that is required is to sign up using an email address, a username, and a password, and then find a reputable seller that offers in-person cash purchases at a price level and at a location you feel comfortable with.
When trading in-person using a peer-to-peer exchange, it is important to take basic safety precautions, such as meeting at a public place such as a busy café or a shopping centre. Once, the bitcoin transaction details are agreed upon on the LocalBitcoins platform, you can meet and buy bitcoin in-person.
While buying bitcoin using cash via LocalBitcoin traders is an easy and convenient way to buy bitcoin offline, there is the risk of theft or that you could end up transacting with undercover law enforcement officers should you be located in a jurisdiction where bitcoin trading is prohibited. Hence, cash in-person bitcoin transactions carry a certain level of risk.
Use a Prepaid Card to Purchase Bitcoin Online
If there is no Bitcoin ATM in your city and there are no viable in-person cash offers on LocalBitcoins or other peer-to-peer exchanges in your area, you will need to resort to buying bitcoin online. When logging onto the Internet, however, we tend to leave traces in the form of cookies and our IP address, for example. Moreover, most digital payment methods such as bank transfers or PayPal leave paper trails that can identify you as a bitcoin buyer.
However, in countries where you can buy prepaid cards and load them up with cash, you can use these cards to make bitcoin purchases online without ever revealing your identity. Exchanges that allow you to buy bitcoin with bank cards without verification (up to a certain amount) include Changelly and CoinMama.
When visiting these exchanges, it is recommended to use a VPN or the Tor browser to hide your IP location during your online bitcoin purchase.
Buy Bitcoin on Bisq Using Cash Deposits
Finally, you can also purchase bitcoin anonymously on the decentralised bitcoin exchange Bisq using cash deposits as a payment method.
Bisq is an open-source, peer-to-peer cryptocurrency exchange that does not require I.D. verification. The Bisq application comes with Tor integration to ensure users’ IP locations remain hidden and does not require users to store funds on the exchange’s platform. Instead, all transactions occur on a private peer-to-peer basis. Additionally, Bisq provides an escrow service to increase transactional security and has an in-built mediation service in case issues arise.
To buy bitcoin on Bisq while remaining anonymous, you can make a cash deposit in local currency for the amount of bitcoin you want to purchase and then show the deposit confirmation to the seller to finalise the transaction so you can receive the bitcoin you have purchased.