Satoshi Nakamoto set the foundations of a financial system that doesn’t depend on a central controlling body or a third party to facilitate a financial transaction. It was not only decentralized but also allowed its users to transact the funds anonymously. In this piece of writing, we’ll discuss the reason behind the anonymous use of BTC and how one can avail of it.
We further discuss a variety of BTC wallets that can be used anonymously for various devices and forums. We extend our discussion to software, hardware, and mobile wallets for managing Bitcoin effectively with safety.
It is the goal of this comprehensive guide that, after reading it, you can step into the crypto world without revealing your name or identity to anyone. Let’s start our discussion with the anonymous use of Bitcoin.
Do you think your identity is necessary to perform any funds transfer? Yes, you are right. In our traditional systems, it is compulsory. Guess what I am telling you now. You can transfer funds without revealing your real identity. Yes, it is not daydreaming; Bitcoin has made it a reality.
Normally, we have to provide identity proofs many times a day and especially when we are dealing with monetary affairs. If we want to open a bank account or avail of a credit or debit card, we need identity proof and personal information.
It becomes more significant when we start a fund transfer. For this purpose, along with identity proofs, it includes the time that is very costly. The traditional system not only requires your identity but also demands the receiver’s identity.
Bitcoin introduced a vital solution to all this hectic detail. It is super easy to transact your funds anonymously within seconds using the Bitcoin system. Now there isn’t any need to illuminate your and the potential receiver’s identity. Instead, you can transfer your funds P2P without involving any third party or financial authority. It associated your funds to a Bitcoin Address without your personal details.
You can ask what the address of a BTC wallet is. It is a sequence of numbers and alphabets that are combined randomly and associated with a soft (online) or hard (offline) wallet. This address is used to send or receive funds directly.
Though this facility seems fascinating, it is misused or manipulated wrongly. Anonymous transactions encourage criminals to buy prohibited goods or products easily. This is because of the anonymity the BTC provides as it is their need to hide their identity for the secrecy purpose.
Silk Road is one prominent example which is an unlawful marketplace where users can purchase illicit products and services like weapons, drugs, and other destructive services. The foremost currency here is Bitcoin as the means of exchange because of the privacy level.
The users who are willing to hide their identity should remember never to disclose their real identity when buying BTC for the first time. The reason behind this is that all BTC transactions are stored in blockchain, which is public, and every connected user can see it. So, if someone tracks back, your transactions can find you with your real identity.
Here is an important point to consider how one buys BTC anonymously. Don’t worry; it isn’t difficult to understand and implement. Let’s explore the concept in deepth to find the pearls of information.
How to purchase BTC Anonymously?
At the beginning of cryptocurrency, there weren’t any rules and regulations, so it was easy to buy BTC anonymously. With its increased acceptance around the globe, governments are designing regulations and applying some restrictions to eliminate or reduce the abuse of cryptocurrency. This has made it difficult to purchase BTC or any other crypto anonymously. All this is implemented with the help of your provided information which you provide while paying fiat money in exchange for cryptocurrency.
Moreover, you have to verify your provided information and submit documentary proof of your identity. All these steps are included due to the abuse of cryptocurrency, and now the governments want to restrict criminals from using cryptocurrency for purchasing illegal products. For this purpose, payment in fiat currency includes documents like an ID card, Bank statement, passport or driving license, etc., to keep the record of the transaction and restrict the use of the BTC network for felonious activities.
If these restrictions are avoided, then it will allow the people to get involved in unlawful and fraudulent activities and remain free of any obligation. Their criminal activities will not reveal to anyone, and the absence of proof will declare them non-guilty.
When someone buys Bitcoin by providing identity proofs, it doesn’t remain anonymous. In this piece of writing, we are talking about the anonymity of BTC. Here you can say that it is impossible now to buy BTC anonymously. But still, there are ways to buy BTC anonymously; let’s explore the ways where we remain anonymous and also don’t break the law.
Buy anonymously at LocalBitcoins
This is a Finland-based platform that was fashioned in the year 2012 and served users from the entire world. They encouraged users from all the countries of the world to trade cryptocurrencies anonymously as they accept multiple payment methods.
They don’t need any documentary proofs and let the users interact directly with each other. P2P system ensures anonymity. A good deal of payment methods is allowed, including PayPal, direct cash payment, through banks, cash post, and many other traditional payment ways.
LocalBitcoin doesn’t need any identity documents from its registered users. However, you can find some buyers or sellers asking for LocalBitoin verified profiles to proceed in dealing. You can avoid such people and look for another user who doesn’t need it. Being a P2P platform, you can find prices are higher than the market because people define their own prices. It is up to you that you find desired coins at a reasonable price that is not much higher than the market value.
You can move your coins to your anonymous BTC wallet later on and further unidentified use. So now you can see how you can buy BTC without showing your identity. We just have discussed the platform, but there are other platforms available that allow you to buy without your ID proof.
To enhance the secrecy and anonymity, you can use a protected VPN to make a purchase deal of BTC. It assists you in hiding your identity and, location & IP address also. You can find a large number of secure VPN software and choose the best one for you.
By applying the safety measures and using a VPN, you can buy BTC at LocalBitcoin anonymously and further secure them in your crypto wallets. Now we are looking for another option that allows you for anonymous purchases. The Bitcoin ATM. Have you heard about it? No? No worries! Let’s explore this option.
You often have used the ATM machines for cash withdrawals and admire the facility. But do you know you can get BTC from ATM machines? Yes! It is true, although it seems novel. ATM machines receive cash and deposit equal BTC to your provided wallet address. The extreme facility is that it can create a new wallet for you if you don’t have a BTC wallet before.
This concept is not new. Initially, the Bitcoin ATM was mounted in Canada in 2013. Now this network has grown up, and you can find Bitcoin ATM machines everywhere in the world. To reveal the ATM locations, you can see and explore them at coinatmradar.com.
These ATMs also offer mixed-up services as a few of them need your IDs to be scanned. However, a large number of machines facilitate for anonymous purchase of BTC coins. Another practical step is implemented to maintain secrecy and avoid fraud and money laundering. Anonymous purchases do not allow to buy unlimited coins.
Although these ATM machines are very useful and easy to use, they have a major drawback. Guess what! Oh yes! You reach it, it the high fee for using Bitcoin ATM. They often charge an 8% to 20% extra fee than the recent market rates. We can digest it as we know installing a Bitcoin ATM is expensive and also include maintenance and other charges such as building arrangements and other operational expenses.
We have revealed two successful methods for purchasing BTC coins that remain unidentified. It looks pretty cool to discuss the secure storage of these bought coins anonymously. Let’s talk about unidentified Bitcoin wallets.
Anonymous Bitcoin Storage
Up to now, we have explored two methods of anonymous purchase of Bitcoin. The procedure doesn’t stop here; you need to keep your coins securely. For this purpose, you need a software or hardware wallet. Both have their unique characteristics, and it is entirely your choice where you want to store your coin. One thing is worth knowing that for storing or transferring your coins to your anonymous wallet, you don’t need to provide any identity.
While using an ATM machine, the procedure remains very easy as the machine creates an anonymous software wallet for you if you don’t have already one. However, if you use the other buying way, you have to manage it by yourself.
Arrange an anonymous wallet and provide its address to the seller so your coins can be transferred to it. The decentralized network of Bitcoin grants you entire control of your funds and enables you to store them safely and anonymously.
In this system, you have a private key that develops your control over your funds. You need this key whenever you want to operate your virtual funds. If you lose your private key, you’ll not be able to access or recover your funds. And due to decentralization, no one will be in a position to help you in any form. So, be careful and manage everything wisely.
A variety of wallets to store your BT is available in the market. However, we’ll discuss three types of BTC wallets and will discuss the pros and cons of each wallet. Let’s explore them one by one.
Let’s start with a software wallet which is considered the easiest way to manage your cryptocurrency like BTC. The developers have created these software wallets, and the users can download and install them on their devices. Online software wallets are also available, and users can access and operate them using the internet. For online wallets, you can’t view your wallet, but when you download and install it, you can view it while remaining offline.
Software wallets, whether online or installed, provide you with the public key (the wallet’s address) and a private key (like a Password) that are compulsory for sending and receiving funds. Keep your wallet keys secure to restrict unauthorized access to your wallet and also for smooth operations. Many software wallets for securing your Bitcoin are available, and each has unique benefits and may be some issues. We leave it for some other time and discuss one of the most popular software wallets – that is Electrum.
It is one of the oldest and the most popular anonymous wallet for Bitcoin. 2011 is the launching year for it, and since then, it has been available for download for free and can be used with multiple operating systems such as Linux, Windows, Mac, etc.
It provides a super easy procedure to transfer the funds. You only need to enter the receiver’s address and amount to send and click the send button; all is done. As Electrum is one of the oldest software wallets, many other software wallets also provide the same easy functionality.
So what is unique about Electrum? It enables you to recover the lost coins if you forget your private key. It facilitates its user through password seeding and enables them to generate a new private key for the same wallet.
Why is it free, and how do they make money? These are the natural questions in this materialistic world. Don’t worry; they make money through a minimal fee that is applicable to every transaction. It is free to serve a huge Bitcoin community around the world. The larger number of users generate, the greater revenue in the form of a transaction fee.
What is a hardware wallet? Basically, it is somehow like a storage device that stores your BTC offline and also enables operations. Hardware wallets are the least victims of hacking because they remain offline. The market is filled with hardware wallets, and everyone claims to be the best. However, Trezor and Ledger Nano S are more prominent. I found the later one to some extent better, so we explore it here.
Ledger Nano S
Like software wallets, these wallets are not free, you have to buy them, and it is worth buying if you get them from the manufacturer. It is good for security reasons also. Although it is paid but less expensive as compared to the functionality it provides.
Once you get it, you have to configure it as per your preferences. While setting it, you are required to set up a PIN to maintain your access. It comes with a recovery password consisting of 12 phrases and enables you to recover your access if you forget your private key or lose the device.
Another beautiful feature of Ledger Nano is that it can store many other crypto coins such as ETH, ZCash, Ripple, and many others. For executing a transaction, you have to connect your wallet to devices connected to the Internet, such as a laptop or desktop. It is not suitable if you need to transfer funds while traveling or being away from your home or workplace, but it keeps the anonymity.
It is similar to a software wallet, and you have to download and install it on your cellphone. It enables you to manage your crypto coins through your mobile phone. Its foremost benefit is the convenience of managing your assets at any time and from anywhere.
Among lots of mobile wallets on the App store but I found Bread one of the most beneficial and popular anonymous mobile wallets to store Bitcoin. Free download it and install it. During its setting up, set a six-digit PIN to maintain your access. You also will see twelve random phrases that will be helpful in recovering your PIN or private key.
A beautiful feature of Bread is that it allows for transactions through QR codes. It directly sends the funds to the Bitcoin blockchain. It provides access through fingerprint that is highly beneficial and keeps you free from remembering PINs.
Cryptocurrencies have become popular due to the anonymity they provide to users. However, regulations are changing this scenario somehow but can’t reduce the supremacy of cryptocurrency. Anonymous wallets are required to maintain and manage Bitcoin. These wallets enable the users to execute transactions.
We’ve discussed the prominent anonymous crypto wallets and also the methods of buying Bitcoin without showing your identity. Now the governments have become active in making regulations about crypto exchanges and systems. Maybe in the future, we will experience less anonymity regarding cryptocurrencies. However, right now, you can enjoy anonymous crypto dealing and managing cryptocurrencies. We only indicate a few wallets only; there are lots of anonymous crypto wallets, and you can choose according to your preference.