How to buy Bitcoin anonymously (well almost)

Keep your Bitcoin purchases private with these tips.

Bitcoin

No matter how you acquire Bitcoins, it will likely not be anonymous. This section highlights a few options for acquiring Bitcoins that are relatively private, or at least not overwhelmingly invasive. To increase your privacy, do not carry devices with you that have SIM cards in them, and never log your location with GPS.

Buy Bitcoins in person 

You can buy bitcoins in person at Bitcoin meetups, through the “marketplace” option of the Mycelium wallet (the marketplace exists on the Android version only), or by finding traders on the LocalBitcoins platform.

The best place to meet traders in person is in a busy but not crowded place that offers free Wi-Fi. Public libraries or cafes are great venues for these appointments.

Both parties should allow enough time to wait for at least one confirmation of the Bitcoin transaction. To make sure your Bitcoin transaction gets confirmed by the network, you don’t need to bring a Bitcoin wallet with you; just knowing your address is enough. Enter the address into the search field on Blockcypher or any other blockchain explorer and watch as the transaction comes in and confirms.

Get Bitcoin From an ATM 

Bitcoin ATMs are common in some countries but rare in others. Check Coin ATM Radar to see if there’s one near you! Make sure to check the “other services” box in the bottom-left corner, or you might be missing out on some places where bitcoins are sold as vouchers.

Each machine differs in how it handles your personal information. Some might not ask for anything other than your Bitcoin address and cash, while others might want your phone number, fingerprint or passport. Just try the machine out with a small amount. Asking the machine’s operator can be tricky, because there’s a risk they might file a suspicious activity report.

If there is video surveillance at the Bitcoin ATM, you might not be able to hide from it. Even still, showing up at a Bitcoin ATM with a ski mask would make you look too suspicious, no matter how much you value your privacy.

Accept Bitcoins as a Payment or Donation 

If you’re regularly spending bitcoins, it makes perfect sense to accept them as payment too as you will no longer need to worry about how to acquire them. The bitcoins you accept will not be anonymous either since there might be a record somewhere that they were paid to you, but they are likely already more difficult to link to you for a passive observer than the bitcoins you buy at an exchange, where records are kept in detail and made available to several parties. 

Mine Bitcoins 

Mining Bitcoin is not a profitable endeavor for hobbyists, but if you need a steady flow of Bitcoin and you have access to cheap electricity and free cold air, along with excess capital lying around, it can be an interesting alternative for acquiring bitcoins.

To mine Bitcoin, get yourself a Bitcoin mining machine, paid with cash or credit card, plug it in, point it to a mining pool, and watch the earnings come in daily.

Be aware, though: you are making an immense bet on the Bitcoin network, and there are many ways you might lose your investment. Make sure to read a lot about this topic before you start!

Also, there are many dubious services offering you mining contracts. They promise you gains from a Bitcoin mining operation without the hassle of acquiring machines or electricity. Most such mining contracts are accidental or deliberate ponzi and pyramid schemes, and you will lose all your money.

Obfuscate Transfers Between Identities 

Every time you move funds between your identities you will need to obfuscate them. To do that, you can “obfuscate”, “tumble” or “mix” your bitcoins.In this section we recommend services that use the concept of Coinjoin, in which the transactions of many users are combined into one transaction to obfuscate which user controls which funds.

Helix 

Helix uses a long chain of Coinjoin transactions to tumble your bitcoins.

Grams, the makers of Helix, is trying to be the Google of the dark web by indexing dark websites, building reviews, and allowing users to mix and tumble their coins.

Using Helix requires a membership, but you can use Helix Light without a membership. Just navigate to the official site with the Tor Browser and enter the recipient address (or the address of your identity that you want to send bitcoins to). You can add a random delay (which might be a few hours) and ask for more layers of transactions to make your payment more anonymous.

You can record your helix status ID or the URL if you want to come back later to check your transaction status. The fee per transaction is 2.5% and a 0.02 bitcoin minimum transaction amount.

As a member, Grams allows you to use the regular Helix service, which supposedly differs from Helix Light by handing you coins that have never been used on a dark market before. Of course this is difficult to verify, as Grams has no way knowing where the funds come from either. A membership will cost you  0.01 BTC as an entry fee, although this fee will be applied to your balance.

Joinmarket 

Joinmarket is a decentralized network that allows you to use Coinjoin with other users without the need for a centralized party and without requiring you to put trust in the other users. Unlike using a centralized service, when you use Joinmarket, your bitcoins never leave an address that you control, and you don’t run into the risk of the service shutting down during your transaction, or the service maliciously stealing your bitcoins.

Installing and using Joinmarket requires a considerable amount of technical knowledge. Despite this, we encourage you to read their guides and try it out because the lower risks and fees are worth climbing the learning curve!

Darkwallet 

Darkwallet was developed by Peter Todd, Amir Taaki, and other distinguished privacy advocates. Unfortunately, it’s still in alpha version and has been for a while, which means it is untested software that likely contains a few bugs. It is not recommended to use it on a day-to-day basis, as unexpected behavior might even lead you to lose your Bitcoin. 

Lexie M writes about information security, bitcoin, and privacy. She is excited about empowerment through technology, space travel, and pancakes with blueberries and blogs for ExpressVPN who is TechRadar’s number one VPN provider. This is an excerpt from Lexie’s eBook called “Bitcoin Security and Privacy : A Practical Guide” which is free to download on iOS, Android, Kindle Kobo and Nook