By Robert Tarry
Overview
Personal privacy has been a major aspect of the revolution that cryptocurrency is often cited as bringing forth. Obviously, there can be a lot more to cryptocurrency than that. However, its anonymous nature can have a strong appeal in the modern world regardless. This is because in times when it feels as if you just have to provide your personal data for nearly everything, either knowingly or unknowingly, regaining some control over one’s identity can feel nice.
As the leader within the cryptocurrency space, Bitcoin (BTC) often serves as the gateway or the initial entry point for investors who are interested in the notion of buying a virtual currency, whether to utilize it as an investment or as a medium of exchange. So, if you are looking to buy some BTC anonymously, this article has some interesting options for you to consider.
Wallets
Before you get started, you’ll obviously need a wallet to store your funds. Wallets are usually anonymous, as no KYC process is needed to open one. However, it would be better if you used non-custodial wallets, since you hold your own private keys and funds, allowing for more privacy. Mentioned below are some of the types of wallets you might consider looking into.
Cold Wallets
What would also be preferable are hardware or cold storage wallets, as they primarily work offline, decreasing the risk of malevolent attacks.Such storage methods are not only helpful for individual investors, but they can also be utilized by cryptocurrency exchanges and firms to solidify their security measures.
HD Wallets
HD wallets, short for hierarchical deterministic wallets, prevent users from reusing addresses that they used previously to receive BTC. They do this by producing numerous keys, or addresses, from just one private key. Every one of those keys can then generate its own batch of keys, and so on and so forth.
Multi-signature (Multisig) Wallets
Multisig wallets are wallets that need at least two private keys to carry out certain tasks. They are primarily used to improve the security of funds stored within wallets by necessitating the signatures of multiple parties prior to sending any transactions. If any of the signatures aren’t there, the transaction won’t go through.
Cryptocurrency Exchanges and Apps
Exchanges are normally the easiest way for users to purchase BTC. Moreover, these exchanges can either be decentralized (DEXs) or centralized (CEXs). Still, while purchasing BTC on exchanges can be convenient, that convenience can also come at a price, i.e., your security and privacy. Therefore, utilizing DEXs is recommended if you want to protect your privacy since they have low KYC requirements and are decentralized. Nonetheless, using certain payment methods to acquire funds is still essential to completely maintaining your privacy, as transferring directly from your KYC-verified bank account will obviously leave behind a transactional trail. With that said, mentioned below are a few DEXs you might want to know about.
RoboSats
For the onboarding of newcomers, RoboSats serves as the ideal peer-to-peer (P2P), non-custodial Bitcoin exchange due to its quickness and ease of use. It does not require any KYC as it is based on avatars that are pseudonymous and enables consumers to exchange their BTC through the Lightning Network with only the TOR browser.
Hodl Hodl
Like RoboSats, Hodl Hodl is a P2P, non-custodial Bitcoin exchange that provides lending services. It does not require any AML or KYC procedures and provides several payment options, such as prepaid debit cards, bank transfers, and cash in-person. In addition, it operates via a multisig escrow, with sellers having one of the keys with them and agreeing on a particular payment method with buyers. After the payment is collected, the BTC is then released and transferred to the wallet of the buyer.
Bisq
Bisq is a P2P decentralized exchange that enables anyone to purchase and sell BTC in exchange for other cryptocurrencies and even fiat currencies. It is free-to-use software that has no single point of failure and no centrally controlled servers. Furthermore, it provides a variety of payment methods, such as cash and face-to-face. In other words, it can be an ideal KYC-free solution.
Buying Locally In Person
Other than exchanges or applications, purchases can also be made in person and locally, which was fairly common when BTC was worth a lot lower than it is today, with people taking risks related to trusting either the seller or buyer.
Still, if the counterpart happens to be someone you reasonably trust, it can be an excellent method to purchase BTC. If the transaction is carried out in cash, then it is even better, since only the other party involved would know of the operation. This decreases the risk of being tracked by malicious actors to nearly zero.
Bitcoin ATMs
ATMs, short for automated teller machines, where you can purchase BTC, can also be referred to as BTMs, aka Bitcoin teller machines. While ATMs can be used to withdraw fiat currency from a bank account, BTMs utilize the blockchain to carry out transactions that transfer cryptocurrencies to users’ wallets through QR codes.
Purchasing BTC with an ATM can be quick and is free of KYCs. However, one thing to note here is that transactional fees can be high, as the hardware can come with high maintenance costs.
There are around 39,000 of these ATMs spread throughout 79 countries. Although the United States is where they are mainly distributed, the numbers are rapidly increasing everywhere. If you head on over to Coin ATM Radar, then you will find an ATM near you if one is available and learn about the KYC requirements if there are any.
Final Thoughts
In summary, it is entirely up to you to decide how anonymous you actually need to be. One thing to keep in mind is that the more anonymous you wish to be, the more effort you will need to undertake if you want to navigate the web like that. Therefore, this article highlights some of the primary techniques or tools that you can use if you are looking to buy BTC anonymously. However, this shouldn’t stop you from researching other ways of doing that, like VPNs, for instance.