DeutschThe topic of anonymity has always been central to crypto fans. After all, the decentralized orientation and the presumed anonymous execution of transactions within the blockchain has been an important decision criterion since the early days of Bitcoin. It is undoubtedly not only cybercriminals who rely on Bitcoin for transfers in the so-called DarkNet. In fact, however, there were early critics who believed that the Bitcoin system did not function as anonymously as proponents liked to claim. In any case, the blockchain cannot offer perfect data protection upon closer inspection. It is true that the Bitcoin blockchain does allow transactions to be assigned. Anyone who values anonymity must take a very close look before investing. Nevertheless, experts still see certain opportunities to buy Bitcoin anonymously and participate in the movements in the price of the first and still most important digital currency.
Whistleblowers like Edward Snowden have shown in the past, however, that anyone who feels completely anonymous is often mistaken. Especially since many authorities, such as Austria’s Financial Market Authority (FMA), have now introduced a reporting obligation for crypto companies. This also affects customers of these companies.
Austria’s Legal Situation is Fighting Anonymity
For example, operators of crypto ATMs must now (cut-off date: 10.01.2020) request proof of identity from their customers for transactions from an investment amount of 250 euros. This is done by scanning a valid photo ID. The data collected, in turn, must also be transmitted to the authorities in the future. In other countries such as Germany, there will also be an obligation to register for operators of exchanges or service providers that allow customers to store crypto reserves. For smaller investments up to the aforementioned limit, proof of identity is initially waived in Austria. In any case, however, privacy is increasingly falling by the wayside, which will be a thorn in the side of crypto fans of the first hour. In the meantime, various analysis tools have been developed – one example is the services of the service provider Chainalysis – which allow transactions to be assigned to individual users. In fact, however, addresses in the BTC blockchain are visible anyway.
Buy Bitcoin Anonymously: Anyone who Invests a Lot is more Likely to Reveal Their Identity
This in turn means that the account balance of individual investors can be identified with the necessary know-how. A problem in connection with the lack of anonymity: Bitcoin holders can become victims of cybercriminals. Inexperienced Bitcoin investors are particularly often victims of Internet crime in connection with cryptocurrencies such as Bitcoin or Ethereum. Lack of information and carelessness are two reasons for successful attacks. It is not only then that it makes sense to protect yourself technically against unauthorized attacks in an appropriate manner. However, there are ways and means to move and protect yourself at least halfway in the Bitcoin universe. It goes without saying that transactions via exchanges subject to reporting requirements in countries such as Germany are not the first choice. In many European countries, “Know-Your-Costumer” requirements now apply, so that customers generally have to go through an identification process.
The more you invest, the more likely you are to exceed possible lower limits – as with ATM purchases. Then, namely, service providers increasingly demand the indication of a clear name. Fortunately, there are some exceptions, which will be discussed below.
Variant 1 for Anonymous Bitcoin Purchases: Transaction on a Private Basis
Do you know someone who wants to reduce their Bitcoin holdings at the moment? In this case, you can exchange cash for Bitcoins without submitting your personal data. There are a number of so-called peer-to-peer platforms that allow such transactions. However, the selection is now significantly smaller than it was a few years ago. In personal contact between buyers and sellers, however, the transfer of the sum in cash and the transfer of the data to the wallet still allow anonymous transactions.
Variant 2: Bitcoin Mining as a Secure Approach without Traceability
From the point of view of many industry experts, this is the only reliable way to get hold of Bitcoins with the greatest possible anonymity. Due to the rising electricity prices in many countries as well as the expenses for the necessary technology, the return on mining is also becoming increasingly lower at this point.
Variant 3: Become an Operator of your Own Full Nodes
You have probably come across the term “Full Node” before. Full Nodes play an important role in the world of Bitcoin. In this way, you have the possibility to set up your own wallet. Namely, without having to rely on an existing service for a digital wallet. In addition, you can do without an additional hardware wallet. In this way, you ensure that personal data, wallet addresses and future activities are assigned to each other.
Variant 4: Services like CoinJoins Make You more Invisible
Have you decided to make it more difficult to assign Bitcoin purchases? Then you have a useful tool at your fingertips. Transactions of this type are characterized by the fact that a larger amount of transactions is bundled. Individual movements can therefore no longer be assigned to a specific transaction. The mass of movements is helpful in this regard. Participants can hardly be identified. The clear identification becomes more difficult the more “Bitcoiners” are involved in the process. The distinction between legal and illegal transactions by analysis tools is also made more difficult here. The problem is that such activities are increasingly at the center of investigations by (inter-) national authorities. Nevertheless, services like Wasabi enjoy great popularity among many users. The Internet browsers used are often forgotten when it comes to the critical topic of BTC anonymity. The choice of Internet browser represents a point of attack for criminals and authorities. Personal IP addresses can be used to assign purchases and sales to a specific computer and thus to users.
This can be achieved, for example, via the portal blockchair.com as part of an analysis. From Bitcoin addresses to clear names, tracking is theoretically conceivable. With an efficient VPN service, you can make the proof and assignment more difficult or even impossible. You should refrain from using a browser such as Internet Explorer with its extensive data collection in your own interest. Because here the data collection is much easier than with programs that store rather few data. Remember: There is simply no such thing as perfect anonymity. But there are ways to cover your tracks. Ideally, you should make sure from the beginning to leave as little information about yourself on the WWW as possible.
Variant 5: Buy Bitcoin at the ATM
In more and more countries, ATMs are available where you can buy not only Bitcoin but also other cryptocurrencies. Dozens of countries worldwide allow this approach for transactions. It should not be concealed at this point that legitimations are also increasingly required for these services (see above). If you buy Bitcoins at the terminals, you can often answer the question about an existing wallet with “No”. In some countries such as Switzerland, however, it is obligatory to provide a current mobile phone number.
Variant 6: Payment Services Such as Paysafecard & Paypal
This way also allows the Bitcoin purchase through a personal code, which is known only to you. Keep the access data to yourself. In order to use the Paysafecard service, you only need a suitable card, which is possible, for example, at gas stations. You can also purchase cards in selected supermarkets to buy Bitcoin anonymously. If you pay with cash, proof of identity is not required. The selection of marketplaces and exchanges for the application of the cards is at least relatively large so far. The German market, in turn, is rather small thanks to the legal situation.
Conclusion on anonymous Bitcoin purchase: Overall, the number of options to buy Bitcoin anonymously is decreasing. This trend is due to changes in jurisdiction – also in Switzerland. However, it is not completely impossible to carry out transactions according to the tried and tested pattern through a personal meeting point with a BTC seller or via foreign platforms. It is important that you are familiar with the developments in the crypto world and know which ways there are in detail.
