Buying Bitcoin anonymously, without verification or id, is easy when you know where to look. Users looking to remain anonymous can buy Bitcoin using Localbitcoins.com, a special ATM for the digital currency, prepaid cards, or conversions from altcoins. We’ll touch on each method in greater detail below.
With Bitcoin and other cryptocurrencies on the rise, there’s no doubt that one of the original motivating factors for the original cypherpunks in the space was anonymity. Many people, both in and out of the Bitcoin community at large, are likely to have heard of the older uses of Bitcoin in its earlier stages.
Chances are, you’ve probably heard of the site The Silk Road, and you probably have heard about users on the site using it as an exchange for all kind of nefarious activity. The Silk Road operated as an exchange for narcotics, weapons, and a whole host of services that could only be purchased on the black market. But why were they using Bitcoin?
Unlike opening up a checking or savings account at an accredited bank, Bitcoin wallets require no personal information from users to get started. Whether it be a hardware or software wallet, the Bitcoin network will never need to know your birthday, social security number, passport number, home address, or even name!
The security behind Bitcoin is concerned with wallets, not identity. There is no typing in “security questions” about your mother’s maiden name when you can’t get into your wallet because Bitcoin doesn’t recognize you – it recognizes the wallet.
The nature of the Bitcoin network made it one of the most preferred ways for illegal activity to take place, though that’s not as much the case for today. Nowadays, many investors and individuals worldwide are taking their privacy more seriously.
Whether it be because they want to hide their assets from an overseeing authority, or just their family, there are a few different options for buying Bitcoin anonymously.
Alternatively, these methods can also be used by those who live in an underprivileged area of the world where there are no traditional, trustworthy financial institutions, and many citizens are a part of the world’s “unbanked.” Sometime people don’t have a government-issued form of identification and are limited in their access to financial systems; anonymously purchasing Bitcoin can help change that as well.
Whatever your reason, keep reading to learn the best ways to buy Bitcoin anonymously.
Old School – LocalBitcoins.com
Though we’re linking to a website, LocalBitcoins.com, this method doesn’t need to involve any type of electronic transfer or verification of identity. It’s worth noting that while anonymous for the most part, there are some traders will require an ID check before they’ll sell to you. Still, this is a great way to buy anonymously.
This is the most traditional form of selling anything online. You can think of the site like Craigslist but for Bitcoin.
All you need to do is create an account for free, decline the optional verification process, and start looking in your area.
Here’s a quick video of what the process looks like:
In this first option, users aren’t actually using the site to pay and transfer Bitcoins like eBay or Amazon. Instead, users can get in touch with other local community members who are looking to either sell or buy Bitcoin in their area.
After you’ve found someone on the website close to your location, you can reach out to them via email (throwaway email accounts are just fine) and schedule a time to meet up for an exchange. Just like Craigslist or Facebook Market, it is always recommended that users meet in an open, public area for any transaction involving an anonymous buyer or seller.
When you go to meet the local individual selling, you should have already discussed a method of payment. If you’re wanting to remain completely anonymous, then you should have worked out an option for paying in either cash or another asset.
Maybe you have an Xbox you’re done with, or an extra set of fishing poles. You can exchange whatever you’d like to do your first anonymous Bitcoin purchase.
Bitcoin Automated Teller Machines (ATM)
This next option is going to be a bit tricky for some and it will depend on your location. For anyone living in a major metropolitan area, it will come as no surprise that there are ATM’s out there that actually support purchasing Bitcoins with a variety of payment methods.
For those in less metropolitan areas, this option is less likely to be viable. These types of ATM’s are normally only found in larger cities, but circulation is on the rise!
With new ATM’s being shipped all over the place, and at a rate faster than traditional ATM’s, users will see their options potentially significantly increasing as time continues.
To add another layer of chance to the equation, not all ATM’s accept cash for payment when purchasing Bitcoin. In many cases, the ATM will not require any form of identification like a state-issued ID or driving license; however, it may only allow for purchases with credit and debit cards.
Nowadays, many credit card companies are banning cryptocurrency purchases altogether, and some debit card transactions on exchanges are implementing additional fees simply for purchasing cryptocurrencies.
If you have the option to use cash at a Bitcoin ATM, the most anonymous way to use the machine is to pull out cash from your bank account at a regular ATM or see a teller, then use the cash at the Bitcoin ATM to purchase some Bitcoin.
In fact, typically, you can not only not give out your personal information, but you can even not select a wallet address for when you purchase, and the ATM will generate an address and set of keys for you on a paper wallet. Then all you need to do is transfer the balance on to your secure wallet at home. Cash is king, but only when actually available.
Similar to the Bitcoin ATM option, this option is going to see varying results depending on where you are and what service you’re trying to use.
Some countries have strict know-your-client (KYC) laws when it comes to financial institutions selling assets, meaning that the company you’re purchasing from needs to know your name, address, passport number, etc. While these laws make sense for combatting those involved in international illegal activity and money laundering, they don’t prove to be very nice for the everyday user who simply just cares about his or her privacy as a law-abiding member of society.
Prepaid cards can be purchased with cash and leave no trail behind them with a name, address, etc. You’ve likely seen them before, sometimes as just a prepaid Visa gift card (like a gift card to a store, only it can be spent almost anywhere), while even American Express runs its own prepaid card available for purchase.
The only problem users run into after successfully purchasing a prepaid card with cash is whether or not an exchange will accept it. In many cases, especially for those in the United States, prepaid cards can’t be used to purchase cryptocurrency or fund exchange accounts on sites like Coinbase/GDAX, Gemini, or the upcoming Robinhood App update where users will soon have access to purchase cryptocurrencies.
For those outside of the United States, there are a lot more options for anonymous purchasing of Bitcoins. Some ATM’s will allow for users to pay for Bitcoin with a prepaid card and that’s essentially just as good as cash when it comes to staying anonymous, but you may need to do some testing and investigating in your local area to find out whether a prepaid card will work or not.
Altcoins to Bitcoin
For this method, we’re going to consider the scenario where you’ve received a lot of alternative coins (cryptocurrency other than Bitcoin) as either gifts, in exchange for a service, or via an airdrop, so now you need to find something to do with them.
If you’ve received all these alt coins and want to turn them into Bitcoins, you’ve got a few choices. You can start an account on one of many different exchanges (like Poloniex, Kraken, Bittrex, Binance, KuCoin, Gemini, Coinbase, GDAX, etc.), though you should be warned that most of the exchanges do require you to submit information to them regarding your identity.
Users signing up for a new account on the platforms will need to submit a passport photo or government-issued identification, as well as setting up a verified email address and phone number. That’s a lot of steps, isn’t it?
How do you exchange those alternative coins for Bitcoin without having to hand over all of that personal information? That’s a lot of stuff to just handover for a simple transaction.
That’s where services like Shapeshift and Changelly come into play. These platforms are perfect for those who are holding on to alternative coins but want to exchange them for other crypto assets without having to handle over all that sensitive personal information.
With both sites, all you need to do to successfully exchange your cryptocurrencies for other cryptocurrencies like Bitcoin or Ethereum, is to go to the site and follow the instructions. For Shapeshift, you won’t need any type of account to begin.
All you need to do is select what coin you’d like to exchange and what coin you’d like to receive from the list of supported cryptocurrencies and go on to the next step to funding the exchange. Shapeshift will not ask for your name, account information, etc.
Instead, it will prompt you with a wallet address to send the coin to that you’re exchanging and provide them with the public address for the wallet you’d like to use to receive the coin you’re exchanging for.
Additionally, you’ll supply them with a refund address just in case the transaction times out or does not work correctly so that you’ll receive your funds back to ensure no one loses their cryptocurrencies into the abyss.
Changelly works in a very similar way, though users will be prompted to create a free account. However, no need to fear. The Changelly account requires no actual personal information from you as the user.
All you need to do is provide an email account and password to make an account, though you can always create a new email for the account. Many already concerned with online privacy are familiar with frequent use of throwaway email addresses. You have choices here.
If privacy is a major concern for you as an active user in the cryptocurrency community then you’ve likely noticed how different the industry is now compared to when things first got started in the early days of Bitcoin. The good news, however, is that you still have options for maintaining your privacy and keeping personal and sensitive information private.
After evaluating all of the available options, it starts to become clear that the biggest factor that will determine what method you use to anonymously purchase Bitcoin will be where you are.
If you have the option to buy Bitcoins from an ATM using either cash or a prepaid card, then that is clearly going to be the easiest way to anonymously purchase. However, not everyone is afforded the luxury of living in such a place with a Bitcoin ATM available.
For those who do have a Bitcoin ATM available, it may not accept cash or prepaid cards. If that’s the case, users need to decide whether they want to continue with a debit card or not.
While the ATM won’t require you to submit your identification information, it will still be scanning your official bank card and retaining information on the transaction. This method is not actually anonymous but does not require you to submit ID verification.
At the end of the day, it should be no surprise that the most anonymous method is the time-old transaction of meeting up and paying in cash. We know that not everyone wants to deal with the hassle or anxiety of meeting up with a stranger in public, as well as the possible personal safety risk, but that is the single most anonymous way to purchase Bitcoin.
When it comes to decision time, you’ll need to weigh all of the possible options available and decide on what works best for you.
For those looking for speed and liquidity of funds, ATMs and services like Shapeshift and Changelly are perfect, but for those who are privacy purists, the cash transaction method is the best solution.