Bitcoin is by far the most popular cryptocurrency around the world. Many investment institutions have purchased significant amounts of BTC and other popular cryptocurrencies. For example, Grayscale bought 60,762 units of bitcoin between February and May. In addition to this, Bitcoin has been awarded the best investment from the last decade. If you bought $1 worth of bitcoin at the beginning of 2010, by the end of 2019 you would have had $90,000. Let’s start with a quick definition of Bitcoin as the protocol and bitcoin that you can exchange and transact.
As time goes by, bitcoin and other cryptocurrencies are making their way to the mainstream. Many well-known newspapers such as the New York times and popular television channels such as CNN have increased their articles and interviews about bitcoin and cryptocurrencies. In some countries you could pay for public services using cryptocurrencies.
In spite of all this increasing popularity some people are still not sure about the general characteristics of bitcoin as a protocol and as a token, so as a form of quick wrap-up we will start by giving you a nice and short definition of them.
What is Bitcoin - The Protocol?
First of all, notice the capital letter. Bitcoin with capital letter “B” refers to the network itself - a protocol for a decentralized P2P exchange that creates consensus without needing a central authority to provide trust.
Imagine a digital ledger that runs in many computers around the world. Each computer runs software that is compatible with the rest of the computers in the network, and every time there is a new block of transactions verified, the digital ledger updates in real-time on all the computers of the network around the world. Moreover, each of these computers has a copy of the latest ledger, so the network does not depend on any single computer.
In addition to how the digital ledger works, we have to mention the consensus mechanism that bitcoin uses. The name of this mechanism is Proof-of-Work. Essentially it allows all the nodes (computers that run the software) to reach agreement for when a transaction that is asked to be recorded on the bitcoin blockchain has all the characteristics to be verified.
What is Bitcoin - The Coin?
Bitcoin is a digital currency, the most popular so far, that allows us to make transfers of value assets from person to person without the need for intermediaries. All of this thanks to four technologies that are P2P network, blockchain, cryptography, and proof of work.
There is more! The number of bitcoins to be created has a limit of 21 Million. For this reason, the bitcoin price has the characteristic to be deflationary. Among its many important characteristics are decentralized, transparent, fast, irreversible, and pseudonymous. This last one plays an important role in understanding privacy when you buy bitcoin.
What Does Pseudonymous Mean?
First of all, let’s start by defining what anonymity is. According to the Oxford Dictionary “anonymity” is the state of remaining unknown to most other people. When using bitcoin it is true that you share your wallet address not your ID and while the transactions associated with this address stay recorded on the blockchain, your personal information doesn’t have to. However, there is more to it. Even though it is not an automatic process, your bitcoin address could be relatively easily linked to you if enough detail is available.
You might have read or heard about bitcoin as an obscure payment system that allows criminals to transact different illegal products through the dark web with full anonymity. Even though these claims are not accurate, they made great headlines for sure! While cryptocurrency is often vilified for this type of potential use, fiat currency is the leader in these issues by far.
The most well-known incident regarding using bitcoin to buy illegal goods and services is the case of the Silkroad. Contrary to what was presumed, all the transactions made on the Silk Road were traced. The reason for this is that bitcoin has a public ledger called the bitcoin blockchain where all bitcoin transactions remain recorded and immutable once they are uploaded to the blockchain.
The fact that bitcoin is not a good idea if you want anonymity was proven when an FBI agent searched for the bitcoin transactions on the bitcoin blockchain and easily matched them with the Silkroad creator’s address in his laptop.
In short, if you buy bitcoins, in most cases, you will not do it anonymously. When you buy bitcoins, you do not share your ID with the bitcoin blockchain, but it is fair to say that you could be traced through the bitcoin blockchain information.
According to the Oxford dictionary, “Pseudonymous” means something “written by somebody who uses a name that is not their own name; using a name that is not their real name. Translated to the bitcoin world, “the name that is not your own is your bitcoin address”, and this is why bitcoin is pseudonymous.
Why Do You Need ID to Buy Bitcoin?
The need to have an ID to buy bitcoin is true at most places on the internet, and this is the case for several reasons. The most common one is regulation. Most regulatory agencies in the world such as those in the USA, expect exchanges to ask for ID before allowing customers to buy bitcoin and other crypto assets, the same issue occurs when you are trying to sell bitcoin and other cryptocurrencies as well.
On the other hand, bitcoin was created as an alternative to banking institutions and to disarm the status quo. Government agencies strongly regulate most centralized exchanges, and that is why they enforce you to share not only your ID but often much more personal information as well.
However, you don’t necessarily need an ID to buy bitcoin. There are actually many ways to buy cryptocurrency and not require ID. One of the examples of selling or buying bitcoins without ID is directly from another person through a P2P platform. Among many P2P platforms, some platforms really understand the importance of your privacy, so they do not force you to do the KYC verification process or share your ID with them in order to buy bitcoin or other cryptocurrencies.
One of these examples is LocalCoinSwap, a platform where you can create an account and start buying and selling crypto with only an email address and a few moments of your time. Having the option to keep your ID and other delicate personal information out of the equation while you buy bitcoin is super valuable. For this reason, more and more people are choosing platforms that let them trade bitcoin and don’t enforce invasive verification or KYC requirements.
Can I Buy Bitcoin Anonymously?
How to buy bitcoin anonymously is a very popular question. Even though most of the time anonymity is not well seen, there is nothing wrong with protecting your ID and personal information on the internet. According to many experts, protecting your ID when buying bitcoins could be very useful. As a general rule the less sensitive the information you leave hanging around on the internet, the better it is for you and your loved ones. Protecting your ID helps you avoid potential issues like identity theft, fraud, and other related concerns that can be quite serious.
Transactions are believed to be anonymously, but are they really? It is a fact that you can do transactions with bitcoin and not need to share your sensitive financial information or undergo excessive verification when buying bitcoins, but this does not mean these transactions are anonymous by default, even if you do so without verification or forced KYC.
When you buy crypto without ID this means that you are not disclosing your private information such as your name, date of birth, address, and more personal information about yourself than you absolutely have to. At the same time, you are not necessarily completely anonymous, as all your transactions belong to your bitcoin address which connects you to the bitcoin blockchain.
The pseudonymity of bitcoin has resulted in many people looking to take their financial privacy even further by making use of bitcoin mixing services or bitcoin tumblers. At the same time, while these may be useful, they can vary in quality and reliability. However, they are interesting tools to investigate for those looking for the utmost privacy in their transactions.
How Do I Buy Untraceable Bitcoins?
Untraceable bitcoins do not exist. One of the biggest mistakes when people talk about bitcoin is saying that it is untraceable. The truth is, according to cyber security experts, that typically most cryptocurrency transactions are easy to trace. On the other hand, what is true is that in order to transact with bitcoin you may not need an ID. Still, you have a bitcoin wallet which if ever linked to your ID or other personal information, could show all the bitcoin transactions on the bitcoin blockchain that belong to you.
Even though to buy untraceable bitcoins could demand a higher degree of technical knowledge than the average person has. There are many things you could do in order to improve your privacy when you buy bitcoin and other cryptocurrencies. Using different wallet addresses to send and receive transactions is a great way to increase the difficulty for others who want to track your transactions and balances.
You can also try using a VPN. As we talked before, all your transactions are registered on the bitcoin blockchain when you buy bitcoin. The only reference on the bitcoin blockchain is your bitcoin address. One of the most popular ways to link your transactions to you is by tracing your IP, which is essentially your computer's ID, or more specifically the ID of the network you are using, and once your bitcoin wallet is linked to your computer’s IP, getting to know your personal information is just one step away.
For this reason, using a VPN to regularly change and mask your computer’s IP when you connect to the internet is one of the best pieces of advice to keep your privacy safe on the internet and make sure you maintain more of your privacy. Finding a quality VPN provider can be done with minimal expense these days, making using a VPN an excellent option for many people concerned about privacy when trading cryptocurrencies on an exchange, including a P2P exchange. The cost of a VPN can be well worth it in many cases; however, using a VPN requires you to take care from your end as well to help make the most of it even if you aren’t using one just when you want to buy bitcoins.
Where to Buy Bitcoin Without ID?
Most centralized exchanges such as Coinbase enforce you to share with them your ID. There are many problems with sharing your ID or things like your credit card numbers to buy bitcoins. Sharing your personal information on the internet is always risky. Many of the most popular centralized exchanges that allow you to buy cryptocurrencies after you share your ID and personal information like your address have been hacked at some point in their history. Millions of IDs, passports, personal pictures, and more have ended in the hands of hackers and often get sold and traded off to other nefarious parties.
The alternative to a centralized exchange to buy bitcoins and other cryptocurrencies in platforms that does not force you to share your private details. Better said, buy bitcoin at platforms that do not enforce you to do KYC verification. One of the best ways to buy bitcoins without KYC is by using a P2P platform such as LocalCoinSwap, where you can buy cryptocurrencies using only your email address for registration and without verification if you choose.
Buying bitcoin where you aren’t forced to undergo excessive verification just to use the exchange is better than disclosing all your personal information in many cases. A couple of reasons to be buying bitcoin privately could be that you do not want to trust your personal information to any platform or third party that could possibly be hacked. Another reason could be that your government is not trustworthy and chances are that your bitcoin could be at risk if they know who owns it.
In general terms, nobody should be yelling to the world how much cryptocurrency they have. It’s also a common problem when trying to buy bitcoins that you simply don’t have the necessary documentation to complete the required verification process to trade cryptocurrency on many platforms, even when looking at bitcoin ATMs now there is often a requirement for some level of KYC verification that could be difficult depending on your circumstances.
Using a Bitcoin ATM?
A Bitcoin ATM is one of the many ways to buy bitcoins and sometimes doesn't require verification (or as much as some other methods) around the world. Countries such as the USA, Argentina, the UK, and more have bitcoin ATMs in their cities. It is important to clarify that they are not as common as the standard ATM machine. Bitcoin ATMs have to be connected to the internet.
Another important thing to know about bitcoin ATMs is that there are two different types of bitcoin ATM. One that only let you buy bitcoin and the other one that not only let you buy bitcoin but also sell bitcoin. The most common type of bitcoin ATM is the one that only lets you buy bitcoin. The fact that only a very small portion of bitcoin ATMs allow you to also sell your crypto is also a huge inconvenience.
As it might have happened to you before with a conventional ATM, cryptocurrency ATMs also suffer from poor service reliability and unexpected downtime. Do you remember the last time you walk or drive to the closest ATM just to find out that it is not working? Well, a bitcoin ATM is subject to that kind of issue.
In addition to all of these factors, when you buy bitcoin using a bitcoin ATM, it is possible to find fees as high as 30%. In comparison to other alternatives such as P2P platforms, where you can find prices below the market price, a bitcoin ATM with a 10 to 30% margin above the market price is not the best option.
Buy Bitcoin Without ID Anonymously?
We have talked about how you could trade bitcoin without ID verification using P2P platforms that do not force you to do the KYC process. One example is LocalCoinSwap where you can buy bitcoin without ID if you need it that way. On the other hand, what happens when you want to buy bitcoin without ID anonymously? Well, in order to buy bitcoin without ID verification you could do it without KYC on LocalCoinSwap. However, in order to buy bitcoin anonymously, you also need a payment method that does not disclose your ID, such as the “cash in person” method.
Notice that payment methods such as credit card, PayPal, bank account, and more, always disclose your personal information that makes it easy to link your ID with your bitcoin wallet whenever you make a transaction with bitcoin on the bitcoin blockchain. Even using your bank account for fiat currency exchange can result in you losing your privacy when buying cryptocurrency privately as this transaction may be later associated with your personal bitcoin wallet.
At LocalCoinSwap you can exchange bitcoin without KYC anonymously. KYC verification is optional, and among 250+ payment methods, you could pick “Cash in person” or other more private payment methods that allow you to make a payment without the need to share your personal information if the person you are trading with is comfortable doing so and isn’t required to by local laws.
Where and How to Buy Bitcoin Anonymously?
After talking about KYC verification, ID, buying bitcoin pseudonymous, bitcoin ATM, and more you must be asking yourself, where can I buy bitcoin anonymously? Even though you can do this process directly from a person, the chances are that you are going to end up scammed. As in many other trade processes with unknown people, there is a high risk that the one who sends the asset to the other end first, gets tricked and the exchange goes badly.
Ethics aside, there is nothing that forces that stranger to send you bitcoin after you send him/her your money. For this reason, it is important to use a P2P platform that protects you through an escrow system such as LocalCoinSwap. Buying bitcoins without escrow is always a considerable risk, but a risk that can be avoided using the LocalCoinSwap p2p exchange even if you do need to avoid verification in your situation.
Should I Buy Bitcoin Using an Escrow System?
The short answer is yes! Trusting your money to people who you don’t know is not a great idea. The escrow system is the key mechanism typical of a P2P cryptocurrency exchange that helps you carry out transactions with strangers without needing to trust them. The P2P platform protects you and makes it possible for you to buy and sell bitcoin and other cryptocurrencies safely. Using a P2P with an escrow system such as LocalCoinSwap lets you trade with more people in a secure way even if you don’t know them. You can read more in our article about using escrow for trading crypto.
Privacy is an extremely important factor not only when you are buying bitcoin but whenever you access the internet. Even though firewalls and other security apps have made our navigation more secure, there is always the risk of sharing your ID and personal information on the internet. Sharing your ID, credit card, and personal information with a platform could end up in an unfortunate event where your ID is stolen or worse used in a way that affects you financially or even legally. Identity theft is a significant concern as is fraud when delicate details like your credit card numbers are leaked.
A great solution is a P2P platform that allows you to cryptocurrency while not handing over ID verification or any excessive personal information. LocalCoinSwap lets you buy bitcoin with an optional KYC. At LocalCoinSwap you decide what you are comfortable sharing. Moreover, you have more than 300 payment methods from which you can pick the best that suits your needs.
Another thing to consider is security when you trade. Give it a thought before you trade with someone who you do not know. Ask yourself this question: What forces an unknown person to send you the bitcoin after you deposit him/her the money? And the answer is “Nothing”!
The good news is that you do not have to go through all this risk when you want to buy bitcoin without ID or with ID verification at all. You could buy BTC and other cryptocurrencies using LocalCoinSwap whose escrow system helps you to buy BTC and sell BTC with other traders in a secure way.
Head to LocalCoinSwap.com to buy or sell BTC your way. You can also join us on our Telegram channel where we are more than happy to help you with any questions.