It is possible to remain anonymous altogether while buying Bitcoin. In this article, I expose the ways to buy Bitcoin with a credit card anonymously.
Bitcoin is a secure way to trade anonymously, but it is not a completely anonymous platform. For the mere fact that most exchanges require ID verification and your transactions are visible on Blockchain, an agency or an individual can track your Bitcoin activities.
You can bypass the ID verification and evade storing your transaction information on Blockchain nonetheless. First, you need the Bitcoin wallet – software and hardware wallets, for exchanges. Secondly, you will sign up for P2P services such as Paxful or use Bitcoin ATMs to transact. The alternative way to remain anonymous with a credit card when buying Bitcoin is to sign up for services such as BitQuick.
You will also need a VPN, Tor, or coin mixers to enhance your anonymity online when buying Bitcoin.
Is Bitcoin Anonymous?
Ordinarily, Bitcoin is not anonymous, except you apply anonymous practices such as using peer to peer services, a VPN, or Bitcoin ATMs.
The main reason it is not anonymous to buy Bitcoin with a credit card is that the transaction will be saved to a public ledger called the blockchain.
According to 99Bitcoins, the information stored for every transaction would include the Bitcoin address of the sender, the recipient’s address, and the amount of bitcoin.
Buying and Using Bitcoin Anonymously Without ID
The only problem with buying Bitcoin without ID is the cost. According to Buy Bitcoin Worldwide, however, exchanges such as Luno and Coinmama charge low rates when you deposit money using a credit card or bank transfer.
How to Buy Bitcoin with Credit Card Anonymously
In this section, we will explore the trusted methods to get Bitcoin anonymously.
Below are the ways to buy Bitcoin with a credit card anonymously:
Instead of using a personal credit card, you can purchase a prepaid card from a convenience store and use it to buy Bitcoin anonymously. Of course, your ID will not be required, but you need software such as a VPN or Tor to conceal your IP address.
Like the regular ATMs you use to withdraw money, Bitcoin has its ATM. Unlike the regular ATMs that dispense physical cash, a Bitcoin ATM will credit your Bitcoin wallet.
The important aspect is that most Bitcoin ATMs do not require any form of verification. However, the amount of Bitcoin you can buy is limited until you verify.
How to Find Bitcoin ATM Near You
Since Bitcoin is not used commonly like the regular ATMs, you need a Bitcoin ATM map to locate the nearest Bitcoin ATM.
Below are helpful map sites:
Although a typical Bitcoin ATM guarantees anonymity when buying Bitcoin, you could pay between 5-10 percent markup fees. Markup is a fee for the privacy offered, and you should confirm the price of the ATM against the Bitcoin price index.
Peer-to-peer is a network of computers that can assist you to buy Bitcoin without leaving a trace of your identity.
Below are the peer-to-peer services you should use to buy Bitcoin and remain anonymous:
Bisq allows you to buy and even sell cryptocurrencies such as Bitcoin in exchange for national currencies. It is open-source software that does not require registrations, and the company does not hold Bitcoin.
Like HodlHodl, which I mention next in this list, it holds the Bitcoin in multi-signature addresses rather than a designated wallet. Also, Bisq does not hold fiat currency such as Euros and Dollar. It is transferred from one trader to another directly.
You can trade Bitcoin with others directly using HodlHodl. It is an excellent P2P exchange for Bitcoin that does not hold funds, and it does not require ID verification or allow KYC (Know Your Customer).
Like I mentioned earlier, HoldHold locks your cash in a multi-signature escrow that oversees the transaction and prevents theft.
Wall of Coins
Another peer-to-peer exchange service is the Wall of Coins. You need a phone number only but without ID, and the phone number is not required for any form of verification. So, you can use a dummy phone number to register and buy Bitcoin anonymously.
It is available in the UK, United States, Germany, Argentina, Latvia, Philippines, Poland, and Canada currently.
On LocalBitcoins, you can buy Bitcoin without ID verification via cash deposit or trading in cash. Once you find a willing seller on LocalBitcoins, you can buy the Bitcoin without your information being stored.
BitQuick makes staying buying Bitcoin anonymously a walkover. Simply, find a willing to trade, they load the Bitcoin on BitQuick, which serves as an escrow until the transaction is successful.
So, as the buyer, you will deposit cash in the bank account of the Bitcoin seller and wait for the seller to confirm the payment. Then you will receive your Bitcoin from BitQuick.
Paxful is another trusted P2P exchange that allows you to buy Bitcoin from sellers anonymously. Also, the verification process on Paxful is optional, so you may choose to omit verification if your transaction is connected to illegal activity.
The only problem, however, is that most sellers do not like to trade with anonymous users on Paxful. But since it involves making a bank deposit, you are good to go.
How to Use Bitcoin Anonymously
In this section, you will discover the tips to use Bitcoin anonymously.
Below are the tips for using Bitcoin anonymously:
Review and Secure Your Online Privacy
Typically, I do not use the same computer to buy Bitcoin and surf the internet. I also avoid using public networks because it could be tracked and the information collected.
Enhance Your Bitcoin Privacy
If possible, do not reuse the same IP address when transacting with Bitcoin leading to your account. I prefer to update the Bitcoin tip address associated with my social accounts. But I do not link my primary Bitcoin account to any social media.
Also, I advise you to use HD Wallet (Hierarchical Deterministic Wallet) that generates a tree-like structure of addresses (keys) – public and private, and saves you from generating them yourself.
Do Not Use Hosted or SPV Wallets
SPV wallets query a single SPV server for any transaction involving your wallet and do not store the Blockchain locally. In this regard, the SPV wallet can disclose the address associated with you to the servers they are connected to.
For example, wallets managed by third-parties such as Coinbase can access your private and public keys because they are stored on third-party servers that give the administrator more privilege over your data.
Another disadvantage is that your information could be exposed to cyber-attacks, and the government agencies or law enforcement can obtain the logs.
Manage Your Passwords Securely
The mistake that most people make is using weak passwords, and the worse mistake is repeating your password for various accounts. In this regard, if the password for one of your accounts is hacked, the hackers will likely figure out accounts related to you and hack them with the password.
Instead of creating a unique password for multiple accounts, use software-generated passwords for each account and store them to encrypted password managing services. Google offers the service, so do several other password managing services you should consider.
How to Protect Your Identity When Buying Bitcoin
In this section, I highlight the ways to secure your Bitcoin transaction and leave no trace.
I have also included the suggestions from Finder.com to help enhance the security of your ID while transacting with BTC.
Below are the steps to protect your identity when buying Bitcoin:
Create and manage multiple accounts; it will help to keep you anonymous.
Use a VPN
You may use a VPN to hide the IP address you use to transact with Bitcoin. In this regard, when you make payments and receive Bitcoin through any service, your IP address is hidden, and nobody can tell where you reside to carry out the transaction.
New Address for Each Transaction
A new address for a new transaction is an excellent way to keep Bitcoin transactions from being traced to you as the sole beneficiary or recipient of Bitcoin payments. You can use a Hierarchical Deterministic wallet to generate newer addresses whenever you transact in Bitcoin.
Dedicated Privacy Coin
You can use such privacy-inclined coins such as Bytecoin and Monero to carry out anonymous transactions.
Coin Mixing Service
A Bitcoin mixing service is an anonymous way to protect your identity. It mixes Bitcoin payment from multiple users and forms a single transaction that hides your identity.
To store your user private keys securely, consider getting a hardware wallet.
Below are the best security hardware wallets:
- TREZOR T
- TREZOR One
- Ledger Nano S
- Ledger Nano X
Should I buy Bitcoin anonymously?
Yes, you should buy Bitcoin anonymously to keep your identity hidden. If your identity is exposed when you are buying Bitcoin, it does not serve the purpose of Bitcoin, which is to ensure user privacy. If possible, open a bank account that does not use your details and use it to pay for Bitcoin through cash deposit or bank transfer.
Should I leave my Bitcoin on the exchange after I buy it?
For utmost anonymity and data security, it is recommendable not to leave your Bitcoin on the exchange after buying it. Use your software and hardware wallet to keep your Bitcoin and private keys safe. Besides, exchanges are susceptible to internet attacks, so their servers can be attacked and breached successfully at any time.
Other than the ways I have mentioned above, you could use gift cards to buy Bitcoin without disclosing your identity. According to DailyCoin, using gift cards is now a trend for buying Bitcoin anonymously, and many people used gift cards during the pandemic to pay for Bitcoin.
Meanwhile, do you find it challenging to earn Bitcoin? Fortunately, I have written a great article that discloses how you can earn Bitcoin without investment.
Remember, the rule of thumb is to remain anonymous and keep personal data away from hackers and even third-party companies that may be tempted to sell or hand over your information to law enforcement agencies.