How to Send Crypto Anonymously
Since anonymity is very important to users of Bitcoin and other cryptocurrencies, in this post, we will be showing how such transactions can be kept private. It is a simple guide for those who like to avoid identity verification, keep their blockchain-based payments secure, and operate anonymously.
How to Make Anonymous Crypto Payments
Below is our simple and practical guide to making your crypto transactions anonymous. We are sure that using any of these seven (7) ways will help you maintain your privacy.
1. Use Bitcoin ATMs
One of the most reliable ways to buy or sell crypto for cash without revealing your identity is to use a Bitcoin ATM. You can use this link to find the nearest Bitcoin ATM at your current location in the world.
A crypto ATM will usually require you to enter your Bitcoin address. To stay anonymous, specify that you do not have one so that the machine can create a new paper wallet that you can use. Import the private key from your new paper wallet to send Bitcoin later.
In case you are unable to find a Bitcoin ATM near you, do not worry. There are other options you can try, which are outlined below.
2. Purchase crypto with cash
Even though many countries are trying to do away with cash and go fully digital, the current level of digital transformation in banking and cross-border payments is not uniform worldwide. Hence, creating a cash-free global economy remains a complicated task.
Despite the revolutionary introduction of digital currencies over the years, cash is still generally the most anonymous payment method, even for crypto transactions. There are crypto-friendly banks and P2P exchanges that allow people to use cash when buying and selling cryptocurrencies like BTC, ETH, and LTC. So, always try to use cash for your crypto transactions.
3. Use P2P crypto exchanges with no KYC
Identity verification, which is often in the form of KYC checks, is a legal requirement for fintech startups, electronic money institutions, traditional banks, neobanks, crypto exchanges, and other types of regulated financial establishments. It is carried out as a measure to prevent fraud, money laundering, terrorist sponsorship, and other illegal financial operations. While this is good, it has, however, become a topic of worry because it deprives people of their privacy.
Thankfully, there are many P2P crypto exchanges that do not require KYC checks. Examples of them are LocalBitcoins, Bisq, Bybit, BitQuick, and CoinCorner. You can use these digital platforms to maintain your anonymity while carrying out your crypto transactions. They will allow you to find someone near you who has or needs BTC, ETH, or any other digital coin that they are willing to exchange for cash.
4. Hide your IP using Tor Browser
The Tor Browser enables you to access the internet without revealing your location or browsing activity. It was designed to offer anonymity and secure online communication by encrypting your traffic, making it very difficult for your IP address to be known.
You can use Tor to connect with your crypto exchange or the Bitcoin network and perform your transactions without exposing your online activity to the public. Nonetheless, we must add that the usefulness of Tor in providing anonymity has limits. For example, if you use Tor to access a crypto exchange or digital wallet that requires you to pass KYC verification, your identity is not protected. Therefore, it is better to use Tor with a non-KYC digital platform.
5. Use a VPN
Using a Virtual Private Network (VPN) is quite similar to using Tor for your connection to crypto platforms. They hide your true location and encrypt your internet traffic.
With a good and reliable VPN, such as TorGuard, NordVPN, and ExpressVPN, you can rest assured of many security and privacy benefits as you send and receive crypto. They include strong encryption, compatibility with multiple devices, stealth mode for protection against VPN blockers, and no storage of usage data (a “no logs” policy).
6. Avoid SPV and hosted crypto wallets
The crypto wallet you use can affect your privacy, and that is a fact that cannot be overemphasised. There are different types of wallets, and if you want to maintain anonymity in your crypto transactions, you should avoid using SPV wallets.
What are SPV wallets? SPV means “Simplified Payment Verification.” So, SPV wallets are crypto wallets that use few resources to work quickly. An SPV wallet is a lightweight client for easily verifying transactions on a blockchain.
Avoiding SPV wallets and hosted crypto wallets is a way to prevent the exposure of your addresses. If you use them, they will submit your Bitcoin address to their respective SPV servers.
7. Do not reuse Bitcoin addresses
We strongly advise you not to reuse Bitcoin addresses or send payments to the same address more than once. This is good practice for crypto holders who are concerned about their digital privacy and payment security. You should use a new Bitcoin address for every crypto transaction. Thankfully, modern crypto wallets have the capacity to use a single seed to generate numerous public addresses.
Are Crypto Transactions Really Anonymous?
There has been a debate on whether crypto transactions are anonymous. Before we share our thoughts on this issue, let us remind you about how a crypto transaction basically works.
Every crypto payment typically has three parts. They are the addresses of the sender and receiver, respectively, and the amount of digital coins that are being transferred. These three parts are important to initiate and complete crypto transfers.
In Bitcoin transactions, all three aspects we just mentioned are made public on the blockchain. Bitcoin transactions are, by nature, not anonymous. That is because they are recorded permanently and made viewable and accessible to anyone. Every user’s public address can be traced to an exchange account or Internet Protocol (IP) address. Therefore, Bitcoin transactions are pseudo-anonymous: the address of a payment is traceable but cannot be directly linked to an entity or person, unless they publish their name along with it.
For privacy concerns, many crypto enthusiasts and long-term investors are worried about this. Does it mean that there is no way to make anonymous crypto transactions? Of course, there are!
Top Wallets and Services for Anonymous Crypto Transactions
Here is our curated list of the best wallets and digital platforms to use for anonymous crypto transactions. They are reputable, safe, secure, and easy to use.
Go to ZenGo for the crypto wallet that uses facial recognition technology in place of private keys! It gives you a very high layer of security for your anonymous payments.
ZenGo offers arguably the most secure non-custodial crypto wallet on the market. It keeps you free from private key vulnerability by using an advanced technology known as Multi-Party Computation (MPC) to enable you to use a very secure multi-chain wallet. This means that you can hold BTC, ETH, and more than 70 other crypto assets, which include non-fungible tokens (NFTs), with ZenGo.
Exodus is a software wallet that supports multiple cryptocurrencies, including Bitcoin, Ethereum, Litecoin, and others. One of its key features is its user-friendly interface, which makes it easy for beginners to manage their cryptocurrency holdings. Exodus also offers built-in exchange services, which allow users to exchange one cryptocurrency for another directly within the wallet. Exodus prioritizes security and offers users the ability to set up two-factor authentication and backup their private keys.
Trust Wallet, on the other hand, is a mobile wallet that supports a wide range of cryptocurrencies and tokens. It is known for its easy-to-use interface and its ability to store and manage multiple wallets within a single app. Trust Wallet offers users the ability to connect to decentralized exchanges and trade cryptocurrencies directly within the app. It also offers features like biometric authentication and backup and recovery options to keep users' funds safe.
This wallet is designed for users who prioritize privacy and security. Wasabi Wallet uses a mixing technique called CoinJoin to combine several transactions into one, making it difficult for third parties to track individual transactions.
Another privacy-focused wallet, Samourai Wallet offers features like stealth mode, which hides the app on your phone and makes it harder to trace your transactions. Samourai Wallet also has a feature called Ricochet, which bounces your transactions through several addresses, making it difficult for anyone to track your payments.
Electrum Personal Server
This is a self-hosted wallet that provides users with complete control over their private keys. Electrum Personal Server allows users to connect to their own Bitcoin full node, providing an added layer of privacy.
MEW is a popular wallet for Ethereum and other ERC-20 tokens. It allows users to create an anonymous wallet without having to provide any personal information. MEW also offers a feature called "Swap," which allows users to exchange tokens without going through a centralized exchange.
Hodl Hodl is a non-custodial Bitcoin P2P service for anonymous crypto transactions. The platform takes pride in caring about the privacy of its users. It is different from many other exchanges in that it does not hold customer funds and does not require KYC verification.
Yes, there are various ways to send or receive Bitcoin anonymously. They include using cash for the transaction, in the case of a P2P crypto payment, covering your tracks with an untraceable wallet, using a VPN to hide your IP address, and other methods already discussed in this article.
Yes, sending Bitcoin is typically a traceable transaction. The reason is that all transactions are recorded on a blockchain (or public ledger), even though the identity of the sender is not directly linked to the address of their Bitcoin.
No, Coinbase does not provide anonymity for sending Bitcoin. All transactions on this exchange are traceable. Besides, the company is legally required to carry out KYC checks and report transactions to the appropriate agencies of government, including the IRS (Internal Revenue Service).
The Bitcoin wallets that do not require identity checks are notably those of LocalBitcoins, Bisq, BitQuick, CoinCorner, Hodl Hodl, and Bybit. Learn more about them in our article on the best P2P crypto exchanges with low fees.
Many Bitcoin wallets require identity verification. Besides, even most of those that claim not to require passing identity checks do limit the services accessible to unverified users. For example, Bybit requires KYC verification for access to more services, such as participating in Bybit Earn projects.
To buy and send Bitcoin without revealing your identity, there are several options available to you. They include:
- using a P2P platform where cash is accepted for transactions,
- going completely anonymous with Tor and VPN services,
- registering an account with a crypto exchange that does not require KYC or identity verification, or
- finding a nearby Bitcoin ATM for crypto-to-crypto or crypto-to-cash transactions.
Make Your Crypto Payments Anonymously!
It takes effort and expertise to make anonymous crypto payments. In other words, the level of privacy you desire for your blockchain transactions depends on how much effort and skill you are determined to put in.
Whether you are using an exchange, a wallet, or a crypto card, there is definitely a method you can try among the options discussed in this article. You just need to note the one that could work best for you and try it. Good luck!