Bitcoin’s popularity has surged since major financial institutions, and government regulators have become profoundly interested in the popular digital asset. Increasing awareness of the digital currency will likely introduce strict regulations in regards to how agencies tax it and how customers buy it.
The majority of users who purchase bitcoin do so through centralized and regulated exchanges, such as Coinbase. The convenience of instantly buying bitcoin on Coinbase is exchanged at the cost of privacy.
Many users are under the assumption that their bitcoin is anonymous since their wallets are found by an identifier known as a public address, but bitcoin’s blockchain is public, so every transaction you make will leave a digital trail.
There are a million reasons why you’d wish to remain anonymous. Use this guide to buy bitcoin anonymously in a few simple steps.
Sign-up at LocalBitcoins
Localbitcoins is a peer-to-peer platform that enables users to buy and sell bitcoins across the world. It also allows for local trades, which mean cash only deals that happen face to face.
Since the overall goal of this is to buy bitcoin anonymously, paying in cash is your best option. Signup on Localbitcoins, and proceed to secure your account with a strong password and two-factor authentification with Google Authenticator
Now that your account is complete search your local area for sellers. We need to stress some general rules before buying bitcoin anonymously from local sellers.
- Always make sure that the seller has a perfect reputation. Next, to their username, you’ll be able to see how many trades they’ve done and their overall reputation score. If you decide to transact with someone who has no prior history or negative feedback, then you’re taking an unnecessary risk.
- Escrow is not automatically on for face to face encounters, so make sure to enable it. Localbitcoins provides escrow, meaning, Localbitcoins holds the seller’s bitcoin. Once the seller confirms that the payment is complete, LB releases the bitcoin into the buyer’s wallet on the website.
Buying Bitcoin Anonymously
Now that you’ve found a local seller, agreed upon a price, and enabled escrow; it’s time to buy bitcoin. Make sure to have the exact amount of money for the arrangement. You won’t be receiving a receipt for this transaction, so there’s no need to declare to anyone what you spent this money on, let alone your bank.
Meet the seller in a public place for added personal security. Once you exchange the money, they should confirm to Localbitcoins that the payment was received in front of you. From there you should see that Localbitcoins releases the bitcoin directly into your BTC wallet in its website. The transfer should take anywhere from 30 minutes to one hour.
You successfully bought bitcoin anonymously, but there are a few added steps to ensure your security and privacy.
Storing Bitcoin Anonymously
Now that you have complete access to your anonymous BTC, it’s time to send it from Localbitcoins to your wallet, preferably a hardware wallet such as a Ledger or Trezor. Your bitcoin doesn’t have a connection to your bank account or identity, and you can store it or use it as you choose.