Although Bitcoin was initially conceived as a tool for anonymous transfer of funds, it has become tough to acquire cryptocurrencies without leaving your data on the Web over time. This significantly reduces the attractiveness of using cryptocurrency payments: what good is a super-secure system if there are many indirect ways to link specific cryptocurrencies to a particular person?
This is Alex, a blockchain guru, and cryptocurrency market researcher. Let’s find out if there are still ways to buy cryptocurrency with a credit card anonymously, despite increased government regulation of cryptocurrency.
Why Keep Anonymity When Buying Bitcoin?
There are many reasons to keep your privacy online, and recent advances in cryptocurrency legislation have only confirmed them. When Bitcoin came on the scene about a decade ago, governments didn’t care about digital currency at all. Now, most countries are working on laws to regulate cryptocurrencies, and some countries have banned them entirely. However, no common legal basis has yet been developed.
Buying Bitcoins anonymously is a good start to maintaining your cryptocurrency privacy, but there are other things to consider. After all, the Internet is wide open to hackers who make money by blackmailing other people with their personal data because most people don’t think too much about staying safe online.
4 Ways to Buy Bitcoins by Credit Card Anonymously
In the early days of Bitcoin, there were no Know Your Customer (KYC) rules. Cryptocurrency exchanges enjoyed absolute freedom, could deal with whomever they wanted, and cryptocurrency users themselves didn’t have to worry about much. But many things have changed a lot in the last few years. Fortunately, there are still ways to get cryptocurrency without giving anyone confidential information.
Online Exchangers
A great exchanger for the beginner who wants to make their first BTC purchase. CoinMama allows users to get their first $150 worth of BTC with a credit card, with no need to provide any identification. It’s a good deal. However, it’s only suitable for beginners because the purchase limit is very low.
This is a popular exchange for peer-to-peer Bitcoin trading. LocalBitcoins offers the ability to trade digital currencies directly (and the site itself has nothing to do with transactions). It helps traders in any country exchange local money for Bitcoins quickly and profitably. The site offers a large number of convenient payment methods.
Wall of Coins uses a unique model because it is also a peer-to-peer exchanger, but it uses SMS text codes to facilitate purchases. You won’t need identification here; you need your phone. And the best part is that the Wall of Coins works in many places around the world. You can currently use it in countries such as Argentina, Australia, Brazil, Canada, the United Kingdom, the United States, and many other countries.
Bitcoin ATM
This is a great way to buy Bitcoins anonymously because you can find them in most major cities, and all you need to buy cryptocurrencies is a credit or debit bank card, and some machines also accept cash payments. A big plus to using these machines is that there is mostly no control over their operation.
However, some BTC ATMs involve more complex processes when making a purchase, so some form of identification, such as scanning your palm print, may be required. But many of these ATMs don’t need any such thing. You should also keep in mind that there is a fee for such transactions, varying from 5 to 10%.
Gift Cards in Exchange for Bitcoins
You can use your imagination: buy a voucher or gift card that can be spent in a store that accepts Bitcoins. This option would suit those who live in a central metropolitan area. One such service is Bitit.gift, but it is only available to residents of Europe.
You could exchange gift cards for cryptocurrency. Many valuable items can be purchased for both cash and gift cards that can be used to pay for these valuable items. The entire transaction would be completely anonymous, but this method involves the need for the counterparties to meet in person.
Providing Services With Payment in Bitcoins
The idea behind Bitcoin is that it is a currency. The vast majority of people exchange currency for goods or services, not for another currency. If you want to start accumulating cryptocurrencies without officially recording your purchases, you can exchange your time or talent for Bitcoins or cryptocurrencies from other systems.
However, cryptocurrency is now beginning to be regulated in most countries. And there may be clear tax implications for any commercial transaction. We can’t advise you to break any laws, so it’s advisable to research any tax liability you may have if you own or trade cryptocurrency.
How to Increase the Anonymity of Bitcoin Purchases
You can do a few simple things to increase your privacy when buying cryptocurrency and protect yourself as much as possible.
- IP address for BTC transactions
The IP address you use can establish a record of your BTC trading and potentially be used to hack your wallet. Some experts recommend using a new address for every transaction, although your wallet type may not allow you to do so. If you use a wallet with a limited number of addresses, it would be a good idea to learn how to use more addresses or swap your existing wallet for one that allows unlimited addresses.
- Browser security level
Using the same browser for regular Internet activity and Bitcoin transactions is not a good idea. Some recommend using a secure browser such as TOR, but there have been problems with hacking on some exchanges for TOR users (hackers are pretty clever). Make sure your Internet footprint is as hard to detect as possible.
- Avoid SPV wallets
The reason is the high probability of information leakage. This kind of wallet stores multiple addresses on the SPV server, which hackers can easily access. There is no way to fix this problem, so it is best to avoid these kinds of wallets if at all possible. Even if there is some incentive to use an SPV or a hosted wallet, the potential motivation will almost certainly not justify the risk.
- Easy password
If you’re using the same password creation paradigm you used for email, it’s time to change it. Passwords that work now and seem secure can be an easy target for the next generation of hackers, which is why so many people go through mnemonic word chains when creating a password.
What Next
Anonymous purchase of Bitcoins by credit card will not be of any use if it is discovered by intruders that you purchased them. Technology does not stand still, and it cannot be ruled out that attackers will try to steal your coins as well as your personal data.
By learning the world of blockchain with Artex Global, you increase your knowledge of cryptocurrencies. Every week we publish interesting articles about everything related to cryptocurrency exchanges and Bitcoin in particular, for example, Bitso cryptocurrency exchange or Coinbase cryptocurrency exchange. Stay tuned!
I have been studying cryptocurrency for over 5 years. I have accounts in every exchange and I test everything on myself.
I want this market to be more understandable for everyone.