BY: SARAH ROTHRIE
This Article is Originally Posted on:https://coincentral.com/how-to-buy-bitcoin-anonymously/
If privacy is a concern for you when transacting in cryptocurrency, perhaps you’ve wondered how to buy bitcoin anonymously. If so, then you’re in the right place.
As bitcoin has become more mainstream, the various entryways into cryptocurrencies have become more regulated. If you are buying bitcoins with fiat, then your entry point is usually one of the fiat-to-crypto exchanges like Bitstamp, Coinbase or Gemini. The problem for anyone who’s particularly privacy-minded is that these exchanges all require your ID to buy bitcoin.
For anyone in the developed world, privacy may be the biggest concern when handing over ID to an exchange. However, for people in the developing world, the requirement for ID is a severe impediment to buying bitcoin. Cryptocurrencies offer a solution to people in developing countries where their national currency may be subject to astronomical inflation. In other scenarios, corrupt governments may seize funds held in cash or banks.
However, there are more than a billion people in the world, mostly in developing countries, who don’t have any form of ID. So the world of cryptocurrencies is all but shut off to them. A solution for how to buy bitcoin anonymously, without using an ID, could prove a valuable solution to many citizens of developing countries.
So what are the options for buying Bitcoin anonymously in 2018?
How to Buy Bitcoin Anonymously Using a Fiat-to-Crypto Exchange
As we’ve already mentioned, using many of the mainstream fiat-to crypto exchanges is out because they will want to see a copy of your ID.
There are a few exceptions, where fiat to crypto exchanges will allow you to buy bitcoin only using your credit card, and not providing an ID. These may not stand true for all countries, but it seems that Coinmama and Changelly are two examples of exchanges that don’t necessarily always require an ID to make a purchase, particularly for low-value transactions.
Of course, once you provide your credit card, then you are leaving a paper trail behind, so for buying bitcoin anonymously, this is not a 100 percent foolproof solution. Another option here could be to buy one of the many prepaid credit cards available on the market today. While a traditional credit card has your name encoded onto the card itself, many prepaid cards require registration, but the card itself doesn’t hold any of your personal details.
How to Buy Bitcoin Anonymously Using a Crypto-to-Crypto Exchange
This solution relies on you already holding some altcoins that you can exchange for bitcoins. If you do, then you can buy bitcoin without ID using a crypto-to-crypto exchange with a focus on privacy, like Changelly.
How to Buy Bitcoin Anonymously Using a Peer-to-Peer Exchange
The form of peer-to-peer exchanges can vary. However, they are all aimed at connecting buyers and sellers of cryptocurrencies. If you’ve got this far and are still wondering how to buy bitcoin anonymously, then this could be the solution for you.
LocalBitcoins provides a platform where you can find a local person wanting to sell their bitcoins. There are options to pay by PayPal, by bank transfer, or if you’re mainly focused on anonymity, you can buy from a local seller by meeting them and handing over cash.
Each trader on the platform has a trust score based on the reviews of people who have interacted with them previously. Particularly if you’re planning a cash transaction, use these trust scores wisely to find a seller who has decent feedback. After all, transacting in cash comes with its risks.
Wall of Coins offers a similar service to LocalBitcoins. However, you will need to have a phone number to use this option as the exchange operates based on SMS. Of course, this means it’s not anonymous if you use your registered phone number. In some countries, like the UK or Mexico, you can still buy a prepaid SIM without disclosing your personal details.
How to Buy Bitcoin Anonymously Using a Bitcoin ATM
While some Bitcoin ATMs do require registration and an existing wallet address, there are others that don’t. You can simply walk up to the machine and tell it that you want to deposit cash in exchange for bitcoin. When prompted to enter a wallet address, you may be able to select an option that says you don’t have one. If so, the machine will generate a paper wallet for you.
Not all Bitcoin ATMs support this feature. However, assuming the machine will give you a wallet address, you can transfer your bitcoin to your own wallet later.
Beware that Bitcoin ATMs usually offer a poor exchange rate, so this is likely to be a costly option.
Of all the ways to buy bitcoin anonymously, the most secure and private way is the Bitcoin ATM option. However, this assumes you can find one that will allow you to remain anonymous and provide you with a new wallet address.
If this option isn’t available to you, then try LocalBitcoins for a local cash trade. Just make sure you ensure that the person you are trading with has a decent enough trust score. You should also make sure you have your bitcoin safely in your digital wallet before you walk away.
Buying bitcoins anonymously in 2018 is not necessarily easy, but it can be done. Before embarking on any of these options, make sure you genuinely need anonymity. Buying bitcoin using other methods, such as using a compliance-conscious exchange will offer less privacy. However, it may be a safer way for you to transact.