no. This is the simplest answer here. Bitcoin is not anonymous. It is pseudonymous, which means that your name is not necessarily a name, but rather a publicly visible address. Bitcoin is a publicly distributed ledger; anyone can download a copy of the blockchain and watch every transaction that has ever taken place on the Bitcoin network. Each time a transaction is made, the sender and recipient are included in the block transaction record.
While this doesn’t directly give anyone your identity, it can give them a start to figure it out.
As soon as the address interacts with a centralized exchange or is converted into cash hitting a bank account, it becomes an easier way to figure out who is making the transaction. If you never really sell your Bitcoin, it’s possible to be at least mostly anonymous, but the hard part is selling it without revealing your identity, especially if you’re selling it for fiat that’s going into a bank account. Buying may be a slightly more anonymous process.
Table of Contents:
Can you buy Bitcoin anonymously?
Yes, more or less. There’s a caveat here, and that is that to buy it anonymously you have to pay cash and that you can’t send it to a wallet you already own.
The only real way to do this is at a Bitcoin ATM, as you can deposit cash and receive a paper wallet printout that contains your keys. This is essentially an anonymous Bitcoin wallet, as the only way to find out who bought it would be to check the ATM’s video recordings and match an ID. After this anonymous purchase, the only real way to remain anonymous is to never move Bitcoin, which somehow defeats the purpose of having it. There is another problem here as many Bitcoin ATMs only allow anonymous purchases up to a certain amount, which means that if you want to buy a large sum, you must provide an ID.
The reality of buying Bitcoin anonymously or wanting to remain anonymous when buying is that it requires a lot of effort. You really have to want to remain anonymous and take a lot more steps to do so. This includes using a VPN, TOR, or even encrypting your computer’s disk and using a secure operating system like Tails. Tails is a portable operating system that protects against surveillance and censorship. Regardless of how you keep your Bitcoin anonymous, it requires technical knowledge and a real desire to remain anonymous, as it’s not exactly easy.
How about buying Bitcoin without verification?
While buying Bitcoin completely anonymously is quite enough, there are potentially a few ways to buy it without providing verification.
Paxful
Paxful is a leading digital currency broker, with a focus on BTC. The platform has optional KYC, but as soon as your account reaches $1500 USD in activity, verification will be required. This makes it a good option to buy Bitcoin for cash, but only up to a certain amount.
Bitcoin ATMs
Already mentioned in the previous section, Bitcoin ATMs are a good method to buy Bitcoin without verification and in cash. The key here is to find a reliable ATM service that allows you to buy a large amount without identity requirements. More and more Bitcoin ATMs require IDs, either now or once a certain threshold is reached. This is due to regulations. If you can find a Bitcoin ATM that doesn’t require an ID, make sure you don’t enter a receiving address and let it print a paper wallet for you instead if you want to stay as anonymous as possible.
Peer-to-peer platforms
There are a variety of peer to peer (P2P) platforms where you can buy Bitcoin or other crypto assets anonymously. Sites like LocalBitcoins, HodlHodl, and Bisq are all P2P platforms where you can buy BTC and other digital currencies without having to provide an ID. Most of these services use an escrow system to ensure that transactions are completed, usually multi-sig wallets. Theoretically you could buy a larger amount of BTC using peer-to-peer, but it obviously comes with a significant amount of risk.
Prepaid cards
If you buy a prepaid credit card you can use it on sites like Paxful and the P2P platforms mentioned above. The prepaid credit card is not linked to your identity and therefore all purchases made with it are anonymous.
Risks of buying Bitcoin without verification
There are some risks in buying Bitcoin without verification, mainly due to the fact that the only real way to buy Bitcoin without ID nowadays is with cash or through P2P interactions. Both of these methods present a similar risk. With cash purchases, directly to a person or at an ATM, there is a risk of being scammed or robbed.
P2P interactions, both online and in person, present the same type of risk. Online P2P transactions are probably safer because there are platforms that use escrow to ensure that deals are completed, but that doesn’t mean there aren’t bad actors trying to take advantage of unwitting shoppers on these platforms.
Conclusion: Anonymous BTC is a challenge
Overall, if you are looking to buy Bitcoin anonymously, you need to consider the work required, as it is not easy.
If you’re trying to stay anonymous online, with encryption, you should perhaps look into crypto assets that are actually private in some way, like Monero (XMR). Bitcoin, despite general conceptions of anonymity, is not the best or easiest cryptocurrency to own anonymously, and this is by design.
