Getting into the cryptocurrency market does not only require dollars; it also imposes the collection of a large amount of personal data. Major cryptocurrency platforms have widely adopted data gathering from users through the Know-Your-Customer regulation as regulators and government agencies worry about the crypto used by criminals.
On the other hand, other individuals opt to decrease the amount of data they share about themselves, even if they do not plan to perform illegal activities. People are wary about having their data leaked or stolen in an online hack, similar to what happened in 2019 to one of the top crypto exchanges, Binance.
Moreover, some crypto users believe that it is just their business and nobody else’s in terms of their real-world identity.
US bitcoin mining company Compass Mining senior mining analyst Lili Rhodes affirmed that privacy is significant in implementing a democratic society. In addition, Satoshi and his colleagues advocated peer-to-peer networks and technology. They never desired to have KYC.
For the benefit of those who prioritise their privacy, there are various methods on how to acquire bitcoin and another crypto without doxxing oneself, explained Rhodes. To know more about bitcoin and other cryptocurrencies, you can learn from Bitcoin Motion.
The following lists; the different ways to buy bitcoin anonymously. Each has its own advantages and disadvantages. However, it is important to take note that there is no complete anonymity on the internet, and one must understand how to manage risks.
Face-to-face and bitcoin ATMs
The crypto market used to have real-world meetups in purchasing crypto since the start of the market. From 2014 to 2015, crypto users traded bitcoin on a face-to-face modality at the Satoshi Square gatherings. Satoshi is the pseudonym of the creator of bitcoin. The buyer sends cash to the seller, and the buyer scans a QR code to a phone address to send the bitcoin to the bitcoin address. Meetups for bitcoin transactions occurred all over the world.
However, there seems to be a decline in this practice in the past few years. However, there are still places that hold these Satoshi Square-like events, such as in Bangkok, Thailand or Stockholm, Sweden. For users who want to experience this old-school method, crypto forums like Bitcointalk or event boards like Meetup.com also post meetups that use this old-school method. Newbie crypto holders need to know more about the crypto market. Bitcoin Motion tells more of this.
The disadvantage with in-person cash trades is that there is no guarantee that the seller or buyer will do their own part of the deal unless signing their personal information or purchase from someone they trust.
Bitcoin can be purchased through a bitcoin ATM which is located in establishments such as grocery stores, convenience stores, or pharmacies.
However, there have been changes in various countries that regulate bitcoin ATMs. It is significant that users know if these ATMs require verification of identity before purchasing or if there are other restrictions.
A user can purchase $20 to $500 worth of bitcoin in Genesis Coin ATMs in San Antonio, Texas, using only one’s phone number. However, purchasing more than that would require an ID, according to the Coin ATM Radar website.
On the other hand, users can buy cryptocurrency with up to $286 (Eur 250) value without the need for verifying ID, according to Coin ATM Radar.
Non-custodial P2P exchanges
Only a few peer-to-peer (p2p) marketplaces allow users to directly deal with each other. The usual process nowadays involves an automated engine that matches bids and offers as what happens on Binance and Coinbase, big centralised exchanges. In simple terms, the peer-to-peer experience is similar to being on Craigslist rather than Nasdaq.
Some of these p2p exchanges do not store the funds of the users or require KYC.
Peer-to-peer platforms ensure that both parties do their part in the trade through the use of smart contracts that lock bitcoin inside a multi-signature wallet until all the agreements with the deal are complete. After this, the bitcoin is released to the buyer once payment is confirmed by the seller.
Transactions that deal with paying in fiat currency happen outside the platform and are dependent on the action of the buyer. It depends on the seller on the kind of payment that they want to accept. These include in-person arraignment or wire transfers to other cryptocurrencies.
The cryptocurrency market has evolved through the years, and more users want to take part in this field. However, most users want to keep their identities to themselves. The steps aforementioned above can assist crypto users in buying crypto anonymously.