There is nothing that beats anonymity especially when it comes to matters that could potentially expose your financial position or net worth to hostile parties. Personal privacy is a big concern in the digital age and it is not entirely rocket science to see why Bitcoin and other cryptocurrencies that promise to address these kinds of concerns continue to gain traction.
The concept behind Bitcoin was to create a cross-border payment system that could bypass the middleman, a role traditionally played by banks. Apart from the payment system, Bitcoin also offers increased privacy as users who transact in Bitcoin are only identified by their Bitcoin addresses, which are a random series of letters and numbers which more or less looks like gibberish (e.g. 1BoatSLRHtKNngkdXEeobR76b53LETtpyT).
Bitcoin and cryptocurrency proponents, in general, believe that the privacy aspect of Bitcoin should be guided and protected at all costs.
However, while Bitcoin transactions are indeed more private than traditional types of financial transactions, such as purchases with credit cards, Bitcoin addresses (where you store your Bitcoin) are in essence just pseudonyms with no transaction mixers or other advanced privacy features offered by other cryptocurrencies, such as Monero or Zcash which solely focus on privacy features. If your Bitcoin address can be tied to your identity, then your privacy and anonymity go out the window.
Despite this flaw, Bitcoin remains the pioneer and dominant cryptocurrency as of February 2018. It is the go-to platform for many where people decide to either store value in the form of Bitcoin or use Bitcoin to transact across the world with lower fees (relative to traditional forms of finance, such as wire transfers).
As such, and after 2017’s super rally in Bitcoin’s price, many people want to get a taste of the proverbial Bitcoin pie. However, many are at a crossroads; they don’t want to miss out on the Bitcoin investment opportunity but at the same want to keep their identities private as in some countries, such as Algeria and Indonesia, holding, let alone transacting in Bitcoin, is illegal and could even land you in jail.
Many investors want to be as stealthy as possible and if you are one of them, here are some ways you can buy Bitcoin without necessarily divulging your personal details:
LocalBitcoins is a Finnish company that was launched in 2014 and is an attractive option for those seeking anonymity because it is available in most countries around the world and has more than 1.3 million users.
As Bitcoin continues to gain in popularity, LocalBitcoins will likely keep growing in terms of its user base, which will make it easier to buy and sell Bitcoin peer-to-peer instead of through a cryptocurrency exchange, which might keep records for local governments.
LocalBitcoins users can open an account without being asked for personal details and are free to choose from more than 50 payment methods of which even paying cash in-person is an option.
On LocalBitcoins, potential buyers of Bitcoin within a given location can sift through ads from Bitcoin sellers and contact them directly if the payment method proposed by the seller is convenient for them. It’s also recommended that buyers try to deal with sellers that have a good reputation.
LocalBitcoins also has an escrow system that is meant to protect anonymous Bitcoin buyers by only releasing funds to sellers and Bitcoins to buyers once both parties confirm that the transaction was successfully completed.
Bitcoin ATMs are another option if you want to buy Bitcoin anonymously without the need for ID verification. All you need is some cash and a nearby Bitcoin ATM.
Of course, not all cities have Bitcoin ATMs available, which can make this a less accessible option than a service like LocalBitcoins.
At a Bitcoin ATM, you insert cash and receive a piece of paper that has a Bitcoin address as well as Bitcoin wallet private keys (how you access your Bitcoin wallet and Bitcoin – must be kept confidential and stored in a safe place!)
After withdrawing from a Bitcoin ATM, you can export your private keys to any wallet of your choosing, such as a desktop, mobile, or hardware wallet, and subsequently send your purchased Bitcoins to any Bitcoin address that you’d like.
However, note that anonymity for Bitcoin ATMs varies as some ATMs have cameras and with others, the ATM owners might demand some form of identification before allowing for withdrawals.
If you are a first-time user looking to immerse yourself into the world of cryptocurrency anonymously, then you can make your first Bitcoin purchase at Coinmama using your debit or credit card.
At Coinmama, you can buy up to $150 worth of BTC without uploading any form of ID.
However, of course, the Bitcoin purchase will still be tied to your credit card, which makes Coinmama less appealing than options like LocalBitcoins and Bitcoin ATMs when it comes to privacy.
Wall of Coins
With Wall of Coins, Bitcoin purchases are settled through SMS codes relayed directly to your cell phone number.
No ID or verification is required and all you have to do is deposit money in a bank. The downside is that it’s possible for your Bitcoin purchases to be tied to your cell phone.
Wall of Coins is peer-to-peer as it connects buyers and sellers with its service. Moreover, like LocalBitcoins, Wall of Coins offers an escrow system that holds Bitcoin until the transaction is settled, upon which the escrow system releases Bitcoins and cash to buyers and sellers respectively.
However, of course, your purchases can be tied to the bank where you deposited the cash necessary to buy Bitcoin.
Wall of Coins is also predominantly cash-based with less payment options than something like LocalBitcoins, which along with cash in-person, offers options like peer-to-peer transfers of other cryptocurrencies like Ethereum, cash by mail, Moneygram, and much more.
Wall of Coins also has a smaller global presence, as it is only present in a handful of countries like the US, Philippines, Brazil, and Canada.
Shapeshift is a platform where owners of other cryptocurrencies like Dash, Monero or Ethereum can convert their coins for Bitcoins in a simple, cheap, and secure fashion.
Shapeshift was launched in 2014 and is so far the fastest, cheapest method of getting Bitcoin for owners of other cryptocurrencies.
Users don’t need any form of ID nor do they have to open an account. Furthermore, Shapeshift can be used anywhere except in New York because of BitLicense, which makes it hard for cryptocurrency services like exchanges to operate in the state, and North Korea because of trade sanctions.
If you own another cryptocurrency, simply specify the amount you want to exchange for Bitcoin and Shapeshift will derive the exchange rate from different sources and complete the conversion within a few minutes, depending on the state of the network and mempool (transaction backlog for a given cryptocurrency network).
Nevertheless, note that Shapeshift is only for crypto-to-crypto exchanges and has a non-fiat policy, meaning that you can’t use currencies like USD to buy Bitcoin.
If you don’t want to use ShapeShift, Changelly is a similar alternative.
BitQuick is a US-based platform created by Jad Mubaslat in 2013.
BitQuick is a quick and safe method of buying Bitcoin with cash that is simple and doesn’t require an account.
BitQuick is simple to use for even the most novice of cryptocurrency users as Bitcoin purchases are completed using BitQuick’s fast three-step process secured by escrow. All you have to do is visit their website and specify the amount of Bitcoins you want from their order book and the fiat equivalent that you have to pay will be displayed. After this, fill in your email address and Bitcoin address and wait for an email confirmation to be sent.
Once you get the email, simply deposit cash to the bank account number displayed on the order confirmation page and send the picture of the deposit slip using the email link you received. The moment the seller receives the cash and confirms cash receipt, Bitcoins will be released from BitQuick’s escrow after being charged a 2% processing fee.
Sellers are not charged anything so in this case you, the buyer, bear the entire load. The only downside is that the service is limited to a handful of countries and the main payment currency is USD, which can make things difficult for non-Americans. Also, like Wall of Coins, your purchase can be tied to a bank.
- Bitcoin ATMs
- Wall of Coins
With more and more regulation of cryptocurrency and an increasing number of Bitcoin exchanges requiring some form of ID before allowing for Bitcoin purchases, it will become increasingly difficult to purchase Bitcoins anonymously. For now, individuals who want to buy Bitcoin anonymously without verification or ID can use one of the services mentioned in order to maintain some level of privacy.