Buying Bitcoin Anonymously: Best Guide on How to Do It

Published: April 19, 2024 | Last Updated: November 15, 2023

Hudson Kisia

Hudson Kisia has been researching and writing content for ElementalCrypto since 2022. He has been writing about crypto, blockchains, and mining for more than 5 years now.

In this article, I will tell you all you need to know about buying bitcoin anonymously. I will show you the best anonymous Bitcoin exchanges, how to obfuscate your trail, and how to protect your endpoint

buying bitcoin anonymously

Isn’t Bitcoin anonymous?

Your Bitcoin address is a public address recorded in a public ledger on the Bitcoin network. Anyone can view your Bitcoin transactions history and how much Bitcoin you have. This raises serious privacy concerns. Apart from overzealous law enforcement agencies watching out for illegal activities such as money laundering and tax evasion, nefarious characters can use this information to access your personal data for criminal activities. The easiest way to be safe is to be anonymous.

Check out my tutorial explaining Bitcoin to fully get to grips with it.

How to remain anonymous on the Bitcoin network

To optimize anonymity, you need to combine an anonymous exchange, trail obfuscation, and endpoint privacy protection. This ensures that even if one level is breached, the other levels become unbreakable walls. Anonymity is also a factor of discipline. Be disciplined in keeping privacy policy etiquette and best practices. In addition to these measures, you have to exercise your own due diligence.

Both criminals and government agencies are in hot pursuit of your bitcoins. Criminals are mostly interested in stealing your bitcoins while government agencies are mostly interested in controlling you. Whichever the case, both violate the very reason why Bitcoin came into existence.

The good news is that you can secure your bitcoins from these two adverse entities. Employing anonymous exchange, trail obfuscation and endpoint privacy protection are the three best ways by which you can safeguard your Bitcoin transactions from undesirable privacy violations.

I: Use anonymous Bitcoin exchanges

An anonymous exchange allows you to exchange your fiat money such as dollars, euros, etc for digital currency such as bitcoins without submitting your personal information or real identity.

Here is how you can buy bitcoins anonymously:

1. Bitcoin ATMs

Bitcoin ATM buying anonymously
A typical Bitcoin ATM

Using Bitcoin ATMs to buy your bitcoins is one of the most anonymous ways to acquire them. Unlike regular ATMs that are linked to a financial institution, you don’t need a debit card or credit card to use them. And neither do you need to make a wire transfer like you do with traditional banks.

You don’t have to link your Bitcoin address to the Bitcoin ATM. All you need to do is to indicate that you don’t have a Bitcoin wallet and the ATM will dispense to you a new paper wallet via a QR Code. You can then use this paper wallet address to send bitcoins to your real Bitcoin wallet address.

The good thing about Bitcoin ATMs is that you do not have to use a bank account or fiat currency. Bank accounts have a KYC process which will expose your anonymity.

However, to fully enjoy the anonymity of Bitcoin ATMs, you must employ trail obfuscation measures highlighted later in this article.

Coin ATM Radar can help you find the location of your nearest Bitcoin ATM. If you are in the United States, use Coinflip’s Bitcoin ATM map to locate your nearest ATM.  

2. Anonymous swappers

Anonymous bitcoin buying and swapping
Anonymous bitcoin crypto swapping

If Bitcoin ATMs are not available within your jurisdiction, then, you can employ anonymous swapping.

Like Bitcoin ATMs, anonymous swapping only requires you to link your Bitcoin wallet address. And like Bitcoin ATMs, you need to employ trail obfuscation measures.

The following are the common anonymous swappers:

3. Brokers

Use a Bitcoin broker
Use a Bitcoin broker

Letting brokers buy bitcoins and thus handle cash payments on your behalf is one way of avoiding a direct trail between your Bitcoin address and your bank account.

CoinCorner is one such broker. With CoinCorner, you can purchase bitcoins without providing your ID verification.

4. Peer-to-Peer Exchanges

Bitcoin P2P exchanges
Engage directly with peers

Cryptocurrency exchanges are the preferred way to buy bitcoin if you are a regular trader or investor as they are relatively cheaper than Bitcoin ATMs and swapping apps. Furthermore, they also have a wide variety of digital assets and payment methods. However, most of them ask you to provide personal details to use the platform.

Peer-to-peer exchanges are an exception to this rule.

The peer-to-peer (P2P) mechanism employs peer-to-peer software that facilitates a direct exchange between peers without an intermediary. The P2P platforms only act as marketplaces where individual buyers and individual sellers meet independently to transact.  

In these peer-to-peer marketplaces, you set the terms of exchange. For example, the payment methods to be used. To ensure anonymity you will opt for paying via anonymous cryptocurrencies such as Monero. Alternatively, you may pay via an independent third party.

Some of the leading P2P exchanges where you can buy bitcoins in an anonymous way include:

5. Decentralized Exchanges

Bitcoin DEX
Use DEX to avoid KYC requirements

Centralized crypto exchanges often require you to undergo a stringent KYC process and identity verification. As part of this verification process, you will need to provide a phone number and email address. Next, you will have to go through a National ID verification process.

With a decentralized exchange, this is unnecessary since there is no central authority to undertake the KYC process.

While most P2P exchanges are decentralized, they operate differently from other decentralized exchanges. Unlike P2P marketplaces where parties negotiate prices independently, in a typical decentralized exchange there is automated pricing based on the forces of supply and demand using the Automated Market Makers (AMM). Thus, you don’t deal with anyone directly. You place an order and it is automatically fulfilled by the system.   

Some of the leading anonymous decentralized exchanges for trading cryptocurrencies include:

  • Uniswap – provides an incognito private mode of trading. Read up on how Uniswap works.
  • dYdX – No registration required. Just connect your wallet.
  • LetsExchange – No registration and no identity verification is required.
  • Kucoin – Registration required. No KYC requirement for trades not exceeding $2000 or 1 BTC per day
  • OKX – Registration required. No KYC requirement except for fiat currency transactions.

For Kucoin and OKX you can disguise your registration details using the temporary contact facility.

6. Direct Cash payment solutions

When you pay for bitcoins via bank transfer or using an ordinary credit card, you leave a trail that can be pointed directly to your Bitcoin address.

If you have to use fiat currencies, making direct cash payments is a way to avoid this trail. Some of the platforms that allow direct cash payment include:

  • LocalCoinSwap – you can use a prepaid debit card or prepaid credit card.
  • BitQuick – is an intermediary that provides escrow services. Both the Bitcoin buyer and Bitcoin seller reach a mutual agreement on the transaction amount. The buyer makes a cash deposit to the escrow account. Once the seller delivers bitcoins to BitQuick, the cash is released to the seller while bitcoins are released to the buyer.

II: Obfuscate your Bitcoin trail

Bitcoin trail obfuscation
Obfuscate your Bitcoin trail

Obfuscating your trails means that nobody can track your trail to your endpoint. Even if you use anonymous exchanges your trail can be tracked.

Those with the power to invade your private space can access information about your crypto assets. The following are some of the best options for Bitcoin users to obfuscate their trails:

1. Keep off Photo ID verification

Avoid those exchanges that require Photo ID verification. Most crypto exchanges ask for this type of identity verification. But, there are a few exceptions where you can buy Bitcoin without ID verification. These include:

2. Use a temporary contact facility

In case you are forced to provide your phone number, email address, or prepaid card to buy bitcoins, you can go for a temporary facility that provides these. These work for well one-off purchases or infrequent purchases.  

(a) Temporary email

Several sites provide temporary disposable emails or emails that do not require you to verify your personal details. One such site is 10MinuteEmail or Guerrilla Mail. Use this temporary email. You can always open a new one whenever you want to buy bitcoins.

In case you want a permanent yet encrypted email, use Mailfence, or Proton Mail.

(b) Temporary phone number

You can also buy a temporary phone number. Many sites sell these numbers based on your email verification. Thus, use a temporary email to purchase the temporary phone number. They are usually prepaid phone numbers. You can acquire temporary phone numbers using the following mobile apps: Burner, Hushed, Flyp, Line2, Digtone, TextNow, and CoverMe, among others. For just SMS verification, use the following web apps: Quackr, temp-number, temporary-phone-number, receive-sms, smstome, anonysms, etc.

(c) Temporary virtual prepaid cards

Several sites provide opportunities to buy virtual prepaid cards. These are often used for a one-off transaction, or a very short duration (e.g., 7 days).

Often, to purchase these cards, some vendors may ask you to provide an email address and phone number for purposes of verification. Use your temporary email address and temporary phone number to acquire these cards.

You can fund your temporary virtual prepaid card via email-based funding sites such as PayPal, Skrill, etc. Once you open a funding account, let someone else deposit funds to your account and then use those funds to load your temporary virtual prepaid card.

(d) Gift cards and store-issued prepaid debit cards

Local store vendors often issue gift cards and prepaid store cards. These are stored-value cards and often bearer cards that are easily dispensed by the teller machines and don’t require personal details to acquire them. Some prepaid store card vendors may require you to provide personal contact. You can use a temporary contact facility.

3. Crypto mixing through bitcoin tumblers

Crypto mixing is the process of obfuscating the flow of Bitcoin transactions between the source and destination by introducing a “third-party” mechanism in between – the tumbler/mixer.  This obfuscates the transaction history and thus conceals personal information. This ensures the anonymity required of a transparent blockchain network.

A BTC mixer collects users’ bitcoins, blends them up in a central account, and then dishes out new cryptos from this main Bitcoin account with output addresses that are different from the original addresses. Most crypto blenders employ multiple addresses for one deposit, thus concealing the user’s amount of bitcoin balance from being used as a means of tracing. Furthermore, the use of multiple addresses makes the transactions appear to be coming from different parts of the blockchain.

This mechanism ensures that only transaction addresses passing from your wallet to the crypto mixer can be tracked through the public ledger and not beyond.

Some of the best Bitcoin tumblers include:

4. Anonymous altcoin masking

Altcoin masking involves using anonymous altcoin as an intermediary to mask the Bitcoin transaction trail.

Monero (XMR) is the most anonymous coin on the crypto market today. Also Is Monero Legal in the US.

Bitcoin is not anonymous but simply pseudonymous. You can use Monero as your intermediary coin. For example, you can buy Monero and then use Monero to buy bitcoins. If you already have bitcoins that you would like to anonymize, simply swap them for Monero and then buy back Bitcoins anonymously.  

What makes Monero anonymous? The following are key features that make Monero anonymous:

  • Unlinkable Stealth address – Monero addresses are automatically encrypted and hashed by the Monero blockchain network. Thus, only the sender or the receiver can decode to reveal the actual address. The public can only view the crypto hash of the address and will never have a way of unmasking it. Furthermore, each transaction has its unique crypto hash. These crypto-hashed addresses become stealthy addresses.
  • RingCT – unlike Bitcoin, the transaction amounts on the Monero blockchain are obfuscated by the use of Ring Confidential Transaction (RingCT). Instead of the network broadcasting the actual amount, randomly generated placeholder information is broadcast. The parties involved can use this information to verify that the transmitted amount is legit.
  • Untraceable Ring Signature Payments – to obfuscate the signature of the sender, the Monero blockchain releases additional signatures (Ring signatures) to make it impossible for someone to ascertain the actual signature.

To successfully mask your bitcoins using Monero, use Monero wallets such as Monero GUI and MyMonero. Monero Core is a desktop app while MyMonero is a web/mobile app. In case you want a hardware wallet, use a Ledger or Trezor wallet.

If you want to use a multi-crypto wallet consider Exodus wallet.

5. Privacy wallets

These crypto wallets conceal your Bitcoin address. There are two types of privacy wallets:

(a) Tumbler wallets

These wallets have a built-in cryptocurrency mixer. The following are the two major tumbler wallets:

  • Wasabi Wallet – This cryptocurrency wallet uses the CoinJoin protocol.
  • Samourai wallet – This wallet uses Whirlpool, a different kind of CoinJoin protocol.
  • To avoid flagging on some exchanges, you can pass bitcoins stored on these wallets via Bitcoin tumblers to clean off any trail to the wallets.

(b) Incognito wallets

These software wallets conceal your private keys. Some of the best bitcoin wallets for anonymity include:

  • Zengo Wallet – This wallet is keyless. It employs Multi-Party Computation instead of key phrases. You can buy up to $1000 worth of bitcoins anonymously. The storage is also anonymous.
  • Mercury Wallet – employs Multi-Party Computation instead of keyphrase
  • Incognito Wallet – employs Multi-Party Computation plus many other measures to obfuscate your private keys.

As a rule of thumb, keep off from hosted wallets such as Coinbase wallet. Also, keep off from SPV wallets.  Ideally, host your wallet locally by using Bitcoin clients such as Bitcoin Armory or Bitcoin-QT.

6. Anonymous network

Networks are notorious for capturing your transaction trail. This is a default nature of networks unless there is a deliberate effort to avoid trails. The internet, as a public place, is one such network that you have to rely on to interact with the blockchain network.

You can employ the following mechanism to obfuscate your trails and keep your identity anonymous when making online purchases:

(a) Private browsers

It is no secret that Google Chrome is a no-go when it comes to anonymity. Most browsers keep trails or allow internet apps and pages to keep a trail of your internet activity using cookies and accessing your historical log.

The Brave browser is a Chrome exception but not sufficient. Tor browser is the best when it comes to anonymity. Nonetheless, it requires other measures such as a VPN and an anonymous Operating system to keep your anonymity tightly secured. Furthermore, you have to be disciplined enough to follow Tor’s security etiquette.

(b) Logless VPN

Virtual Private Network (VPN) routes your internet connection traffic via other servers. This way, your traffic appears to be coming from those servers rather than your computer. This obfuscates your IP address.

Logless VPNs don’t require you to log in to use them. They also don’t keep logs of your browsing activity.

Some of the best logless VPNs include:

As a rule of thumb, keep off VPNs registered and/or hosted in the United States and United Kingdom since those countries have laws that demand such services to provide data to government entities when asked.

Blending the Tor browser with your VPN can provide enhanced security.

(c) Darknet

Darknet avoids or obfuscates trails by default. This is unlike the ordinary internet which keeps and exposes trails by default.

Most of the anonymous crypto exchanges are anchored on a darknet. For example, most Bitcoin Tumblers have a darknet presence.

7. Anonymous Operating System

The Operating System (OS) that you use can help you secure your data or expose it. If you are using a common desktop OS such as Windows and MacOS or a common mobile OS such as Android OS and iOS, then you are vulnerable to trailing as they keep activity logs.

The most secure and anonymous OS falls within the Linux ecosystem. Some of these include:

  • TAILS (The Amnesic Incognito Live System)
  • Parrot OS
  • Whomix

You can get a detailed exploration of these Linux distributions plus others from here and here. You can also get a bigger list from here.

One important rule of thumb to consider is that, whichever the Linux distribution, go for live USB. Live USB installation enhances your anonymity since all trails and logs are destroyed when you boot off your USB. In any case, your entire activities run on the USB with no trails left on the main computer. Also, live USB is portable meaning that you can use it securely on any computer.

III: Protect your bitcoin endpoint

Bitcoin endpoint privacy protection
Protect your bitcoin endpoint

Unauthorized access to your data can compromise your anonymous transactions. For example, government agencies can raid your premises and seize your storage devices to access your data. Spyware can also be used by nefarious characters to secretly access your private data.

The following are the prominent means by which you can ensure endpoint privacy protection:

1. Use of storage encryption

To prevent all these, you must encrypt your storage facility – disks, folders, and files.

Some of the best encryption software include:

  • True crypt
  • Vera crypt

2. Use of offline hardware wallets

For bitcoins, Ledger Wallet is so far the only reputable hardware wallet that allows you to store bitcoins anonymously. Furthermore, like Monero wallets, it allows you to create multiple wallet addresses.

3. Use of encrypted paper storage

Paper storage can be an easy way to keep your endpoint private. The big advantage of paper storage is that it is highly portable and that you can easily generate multiple copies for storage in different locations. Make sure that no single location stores both private keys and public keys. You can even break the private key into several segments and store each segment at a separate location.

One of the best locations to keep your encrypted papers is a bank vault. You can also use a parcel storage facility.

To ensure that your encrypted paper data doesn’t get erased over time, you have to keep a policy of printing and laminating copies at regular intervals e.g., once every 6 months to replace the old copies.

Up Next

The 23 Best Bitcoin Tumblers and Mixers (2023)

Best bitcoin tumbler

Are you worried that your Bitcoin transactions are secretly being tracked? Bitcoin transactions are pseudonymous which means that if someone ties a bunch of numbers to your identity your whole financial transaction history could be exposed. The best way to maintain your privacy while using Bitcoin is to use a Bitcoin mixer or tumbler. In this article, I will help you find the best Bitcoin tumbler to suit your needs. Read more.

Hudson Kisia has been researching and writing content for ElementalCrypto since 2022. He has been writing about crypto, blockchains, and mining for more than 5 years now.

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