How to buy and keep bitcoin anonymously ?
Bitcoin is not anonymous
All Bitcoin transactions are recorded on a public, open blockchain that anyone can see.
There are even companies like Chainalysis that specialize in tracking and analyzing transactions on Blockchain.
Why is that a problem?
Governments have monopoly over money. They can print and spend as much money as they want. They do not want to lose their control.
Governments have a record of banning any alternate form of money when it becomes a threat to government-issued money.
Crypto is a direct threat to Government’s monopoly over money. Hence most countries do not have favorable crypto laws.
Governments exploit open nature of blockchains to analyze and track their citizens using cryptocurrencies.
Hence it is a good idea to keep your crypto anonymous even if crypto is not illegal in your country right now.
How are transactions tracked
Transactions on blockchains are recorded in form of addresses
Governments link these addresses to real identities by making it compulsory for exchanges to know customer identities when they buy crypto.
Exchanges are not allowed to operate in the country if they do not follow KYC(Know your customer) requirements imposed by the governments.
How to get Bitcoin anonymously
One can acquire crypto anonymously if they do not reveal their true identity while acquiring the crypto.
Some ways that you can use to acquire crypto anonymously are:
Minning Crypto requires huge upfront cost for buying hardware. You will also have to use a good VPN service to hide your IP address that can be used to locate you.
Using VPN will reduce your rewards, but that is the price you pay for mining crypto anonymously.
Work for someone anonymously
Set up an anonymous profile on freelance websites like Fiverr or Upwork and find work.
Provide your services in return for crypto without revealing your identity.
Meet someone anonymously
Find someone with whom you can trade cash for crypto without revealing your identity.
You can find such people in crypto meetups or online. But this involves significant risk if a large sum of money is involved.
There are some exchanges in some countries that allow you to withdraw small amount of crypto without KYC.
These exchanges keep changing so search google for exchanges available in your area that do not require KYC for small amounts of crypto.
There are several peer-to-peer marketplaces you can use to buy crypto with cash or gift cards that do not require KYC.
Make your Bitcoin anonymous
You can make bitcoin that is linked to your address anonymous by using mixing services.
Mixing services mixes bitcoin of all the participants and distributes the mixed bitcoins that cannot be traced to any participant.
A user can mix bitcoin several times to make it even difficult to trace the bitcoin.
However, mixers have limitations:
- Centralized mixers can share your information with governments or run away with your funds.
- Other participants could have used their bitcoin for much shady purposes like terrorism or child porn etc.
- There are many exchanges that do not accept mixed bitcoins.
How to keep Bitcoin anonymous
It is also important to take measures to keep your bitcoins anonymous once you acquire bitcoins anonymously.
Do not reveal your info buying stuff using anonymous bitcoins
Do not mix KYC bitcoins with anonymous bitcoins
Bitcoin wallets such as Samourai wallet allow users to label and choose which bitcoin they are spending.
Run your own node
Users have to query Bitcoin blockchain to check status of transactions and address balance.
Node service providers can use your query information to guess which addresses and transactions you are interested in.
One can run Bitcoin node locally and query the local node to get such details.
These solutions could seem daunting and require technical knowledge.
But one can work on improving their privacy incrementally by learning along the way.