Centralized crypto exchanges (CEXs) mandate that users undergo a verification process, including ID checks, to comply with anti-money laundering policies, thereby making anonymous Bitcoin purchases on these platforms impossible. However, storing personal information on vulnerable centralized servers raises significant privacy concerns and contradicts the decentralization ethos fundamental to cryptocurrency.
This guide provides those looking to profit from Bitcoin and buy it anonymously with methods to acquire crypto, including Bitcoin and other digital assets, without ID verification.
Editors’ picks: most popular platforms to buy BTC anonymously
BYDFi
Kraken
Margex
Find out more no KYC platforms to buy BTC here
Is anonymity and privacy the same?
Anonymity and privacy are not the same. Bitcoin is built on a publicly auditable, open-source database of transactions. Anyone with an internet connection can audit every transaction recorded on this database.
This Bitcoin blockchain is a database, also known as a public ledger. It contains all the transactions ever made and records the sender’s and receiver’s addresses, as well as the amount of Bitcoin.
This means that anyone can see how much Bitcoin is in each address. Addresses are not necessarily linked to other information, such as a name, phone number, or physical address. Therefore, blockchain addresses and Bitcoin are pseudonymous rather than anonymous.
Pseudonymity refers to an individual who uses a fake name or identity to conceal their actions. In the case of Bitcoin, pseudonymity is akin to privacy. It allows Bitcoin users to keep their identities private while still being able to track the total supply of the cryptocurrency. It would only be possible to verify that no additional Bitcoin is being created if it was fully anonymous.
Privacy allows us to decide who we are and how we interact with the world around us. It enables us to think freely and without discrimination. Bitcoin was created with such ideals in mind and has much about it that makes it suitable for privacy. However, it is more complex, as we shall see.
Why is buying Bitcoin anonymously important?
One of Bitcoin’s most prominent arguments against privacy and anonymity is that only criminals and terrorists want it. Put another way, “If you have nothing to hide, why do you need privacy?”
“They want to know what people are doing, they want to know what people are spending their money on and that is an invasion of privacy. Privacy is the basis of democracy in that you know you have the ability to privately hold views and privately discuss ideas. But the government wants to know all your ideas. They want to know what you’re thinking, what you’re saying, and what you’re spending your money on.”
Peter McCormack, What Bitcoin Did podcast host: YouTube
Privacy is a fundamental human right. It isn’t necessarily meant to hide bad actors from the government, but it is meant to protect good actors from bad ones.
This is why Bitcoin users need a safe way to traverse financial activities. In an increasingly cyber world, those who do not have the means or knowledge to protect themselves will be taken advantage of. In this sense, buying Bitcoin anonymously is the great equalizer of the financial sector.
Is Bitcoin anonymous?
Bitcoin is anonymous because the wallet address is not tied to one individual’s identity. For instance, paying with a credit card is not anonymous, as all card transactions are linked to your identity. But paying with cash is completely anonymous because nobody can trace that cash back to you.
Although Bitcoin is more private than credit cards, it is still less anonymous than cash. Bitcoin transactions are stored on the blockchain. Each transaction contains data such as the payment amount sender and recipient addresses.
Every transaction uses Bitcoin from a previous transaction. This means that every Bitcoin payment can be traced back from crypto wallet to a crypto wallet. Although addresses can be traced 100%, they cannot be linked to any person or entity. That’s why we call Bitcoin pseudo-anonymous.
An individual’s identity may not necessarily be linked to a Bitcoin address, but some people may publicly share their wallet address, connecting them to that address.
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After the association, anyone with enough time and determination could examine the ledger. They can determine how many BTC someone has, how they received them, and how they spent them. To be able to say that Bitcoin is anonymous, one must take the necessary precautions to ensure that their identity is not associated with transactions or addresses.
How to buy Bitcoin anonymously (without ID)
As we’ve mentioned, your Bitcoin address isn’t necessarily tied to your identity unless you want to tell others about your crypto wallet’s address. But if you’re starting and want to buy cryptocurrency, you will soon find that buying Bitcoin without an ID isn’t easy. You cannot just purchase crypto without ID, especially if you have a thing for CEXs.
But then again, can you buy crypto anonymously if you look past the CEXs? Short answer: Yes!
When we think about why cryptocurrency was invented in the first place, it makes sense that people with this old-school mentality want to preserve their anonymity and privacy when acting online because privacy is a right we all have.
Luckily, there are still ways to buy Bitcoin anonymously. These methods are slightly more complicated than buying it directly with your credit card from a major centralized exchange. But your effort will be rewarded by being able to preserve your privacy.
So, if you are looking for the best way to buy crypto anonymously (without ID), consider these:
How to buy Bitcoin anonymously on a P2P platform
Since centralized exchanges will ask you to verify your identity before buying crypto with fiat, your best chance to perverse your privacy is to use a P2P (peer-to-peer) platform. Regarding ease, it might be the best way to buy Bitcoin anonymously.
Here’s a step-by-step guide on how you can buy Bitcoin anonymously using a P2P platform.
Step 1. Use a VPN
A VPN (virtual private network) service is worth the extra cost if you want an additional layer to protect your privacy.
Your connection will not be direct to the internet; instead, it will be routed through the VPN’s servers. A VPN service will hide your IP address, which is one effective way to protect your privacy, especially when accessing specific internet services. Moreover, VPNs protect your computer from malware through firewalls and proxy servers; in many cases, you can pay your subscription in crypto.
It is important to remember that there is still some risk associated with using VPN services. Ensure these services use the latest encryption standards and do not log your IP address or other information.
Step 2. Get a new email
After you’ve secured your internet connection, it’s time to work on the anonymity side of this Bitcoin transaction. Even if you plan on using a peer-to-peer platform to buy Bitcoin, you will need an email to sign up for any of these services. Your email is probably already compromised, as you’ve been using it for various services.
You may consider getting a brand-new email while using a VPN to ensure that nobody can tie your Bitcoin to your identity. Most email services will ask for SMS verification to verify that you’re human and not a bot using their service.
Consider using a disposable SIM card since you don’t want to tie your phone number to that email. Some privacy-oriented email services are ProtonMail and Tutanota, but there are others.
Step 3. Create an account on a peer-to-peer platform
Now that you have your VPN and email ready, you can start browsing the P2P platforms that allow you to buy Bitcoin anonymously (without an ID). Some of the most popular P2P platforms are:
You can use these platforms to sign up with your brand-new email and use the disposable SIM card for any SMS verification. Note that financial platforms tend to change policies often, and by the time you read this article, these, too, may change their requirements.
Other popular P2P platforms used to be more suitable for anyone looking to buy Bitcoin anonymously, but now, most of them require ID verification. These include Paxful, LocalBitcoins, and CoinCorner.
By using these P2P platforms, you will be able to buy Bitcoin anonymously, post offers, or choose an offer from the list of offers posted by others. You can sort the desired type of transaction, choosing between the different types of payment methods and BTC prices.
P2P platforms don’t hold any funds but use a multisig escrow to reduce the possibility of theft. The buyer selects the offer, sends the required funds (fiat funds are sent directly to the seller), and then the seller releases the Bitcoin in escrow. Since the platforms do not hold any fiat, they don’t require users to go through a KYC process.
Step 4. Use a Bitcoin tumbler
It’s all pseudonymous till now. But the question is: Can you buy crypto anonymously — where can the transaction details be hidden? Yes, there is a way:
If you’re concerned about where the Bitcoin comes from or want to preserve privacy, you may use a Bitcoin tumbler. This service will mix your new Bitcoin and add more privacy protection.
The coins you get back are taken from a large pool maintained by the mixer or tumbler and should not be related to your original coins. However, you should know that Bitcoin tumblers are centralized services. That’s why you should use a trusted mixing service to ensure you will receive your Bitcoin back. Make sure to use a service that keeps no records of any mixing transactions.
Buy Bitcoin anonymously using a Bitcoin ATM
One of the easiest and most convenient ways to buy Bitcoin anonymously is to use a Bitcoin ATM. Buying BTC via an ATM is probably the best way to go if you want to purchase crypto and bypass any verification process. They sometimes don’t require an ID and can pay in cash — you don’t even need a Bitcoin wallet. The machine will generate a new paper wallet. Later, you can import the private key from that paper wallet and send those BTC wherever you like.
Can you buy crypto anonymously using these ATMs anywhere?
What’s important to note is that Bitcoin ATMs are limited in the amount of bitcoins you can buy. Furthermore, most ATMs charge a fee (up to 10%). If the fee isn’t stated explicitly, then it’s “hidden” in the exchange rate.
Buy Bitcoin anonymously using DEXs
Another way to buy Bitcoin without compromising identity is to use a DEX (decentralized exchange). These are decentralized apps that operate on top of programmable blockchains. Unlike centralized exchanges — such as Binance, Kraken, or Crypto.com — which require KYC to process transactions of all types, decentralized ones do not. They only need a wallet address. So, if you already have an anonymous Bitcoin wallet like a Ledger or a Trezor, going through a DEX is the best way to buy Bitcoin anonymously.
However, DEXs don’t use fiat. To use them to buy crypto without KYC, you will need a crypto wallet already funded with some crypto. Say an anonymous crypto wallet with some USDT — a stablecoin. If you don’t have any crypto, you should buy some using a peer-to-peer (P2P) platform or a Bitcoin ATM. Therefore, you might need to visit the earlier methods to buy crypto without ID to operate within a DEX.
Unfortunately, the Bitcoin network has little programmability. Therefore, there are few options for purchasing Bitcoin on DEXs. You can, however, purchase wrapped Bitcoin or use other options like Thorchain.
Thorchain allows traders to purchase assets between Bitcoin, Ethereum, BNB Chain, and other networks. These transactions are non-custodial and anonymous and enable users to buy Bitcoin in a decentralized way. Thorchain settles billions of dollars worth of transactions between networks. So, users are taking full advantage of its anonymity.
The hidden costs of buying Bitcoin anonymously
When buying Bitcoin online, anonymity often decreases, especially on centralized exchanges that mandate ID verification due to their user-friendly interfaces. However, you can still disconnect your identity from your wallet address using alternatives like peer-to-peer platforms, though this often comes at a higher cost.
Selling BTC from an anonymous wallet for cash presents another lesser-known method, similar to using a Bitcoin ATM but without the hefty fees. In this direct trading method, individuals set their prices for Bitcoin, providing another way to maintain anonymity. Ultimately, using cash for transactions remains the most untraceable method for anonymously purchasing Bitcoin.
Frequently asked questions
Yes, you can buy Bitcoin anonymously, by using a peer-to-peer platform that doesn’t ask for ID verification. Depending on the offers, you can buy bitcoin using an online wallet, gift cards, fiat via bank transfers, or even other cryptocurrencies.
If you consider privacy an important aspect, then you will appreciate the different ways in which you can buy Bitcoin anonymously. While, oftentimes, ID verification is supposably meant to eliminate criminal activity from the platform, it’s also depriving users of their legal right to privacy.
You can sell Bitcoin without ID on one of the peer-to-peer platforms (Bisq or Hodl Hodl).
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