Buy Bitcoin Anonymously (Non-KYC)
Bitcoin is a public ledger. Full anonymity is not inherent to the network. Every transaction is stored on this public blockchain forever. Giving up too much data when creating these transactions can link addresses, wallets and balances back to your identity. When dealing with personal finance, especially in today’s geopolitical climate, linking your identity and funds may pose risks.
Some of these risks have been made abundantly clear in 2022, as we’ve seen in Canada and now Russia, where bank accounts have been frozen and funds of citizens have been restricted. The ability for governments to restrict funds do not just apply to banks, as we may see them also pressuring Bitcoin/Crypto exchanges.
The risk mentioned above is partially mitigated once you remove your Bitcoin from those exchanges, however the honeypot of data from these exchanges linking your identity to your bitcoin opens up the risk of government persecution, tracking your spending and/or prevention of using regulated services.
You may also imagine a scenario where this data is leaked to the public. This opens up the risk of theft and extortion.
Luckily there are several practices and tools to improve your privacy. While some practices can help improve your future privacy for bitcoin you’ve been clumsy with, there are other practices that help introduce more privacy from the start. Though this may sound overwhelming, remember privacy is a journey and you do not need to be a privacy expert with your first purchase.
In this article we will be talking about the most basic way to improve your privacy from the start: Buying Bitcoin without KYC
(Protip #1: Make sure to keep your KYC and Non-KYC bitcoin Separate)
What is KYC?
KYC stands for Know Your Customer and is a standard for verifying customer identity prior to establishing service with regulated financial institutions. Under KYC, customers must provide credentials such as Government ID card verification, face verification, biometric, and documents to prove address. KYC is a legal requirement for these institutions to comply with AML (Anti-Money Laundering laws). This same regulation is a requirement for most Cryptocurrecy exchanges today.
So how do we buy Bitcoin without KYC?
A great way to get some of your initial KYC-free bitcoin is through Bitcoin ATMs. Buying bitcoin through these ATMs are can be achieved in a few steps:
Step 1. Find a bitcoin ATM near you from Coin ATM Radar or Coin Flip
Step 2. Click the specific ATM near you and check verification requirements. (ATMs often have different requirements based on dollar limits)
Step 3. Download Bitcoin Wallet
Step 4. Insert Cash , scan QR code and receive Bitcoin.
Now, I would not run off to the ATM without understanding a few caveats to these simplified steps first.
Almost all of these ATMs require some identity verification in the form of name and phone number. This is usually the minimal requirement with full KYC at higher limit amounts usually starting >$250.
“But I thought this was KYC free? I just gave up my name and number”
The way to avoid giving up your number is through a website such as textverified.com or by using a 2nd phone not linked to your identity (prepaid sim cards can often be bought at local gas stations).
Aside from having to use a second phone or a different number at these ATMS, one of the major drawbacks are these low dollar limits for the POSSIBILITY of Non-KYC bitcoin. The other major drawback is these ATMS usually come with a steep price premium (often around 10% or more). With that being said, if you can find a Bitcoin ATM near you with lenient verification requirements it is a good way to get your initial purchases to use as an escrow deposit for our favorite method mentioned below.
Bisq is a decentralized peer-to-peer network for trading bitcoin. Unlike most cryptocurrency exchanges, Bisq is not web-based running on a centralized server. Because of this, it requires you to download the Bisq Software from their website. Bisq is private and secure as the software serves as an individual node running over Tor.
On Bisq, you will notice that there are several trading pairs for bitcoin. You can buy with Amazon gift cards (most private, but often comes with the most premium), Dollars/Euros through Revolut and Dollars through Zelle or Strike etc.
Once you have Bisq downloaded, the first thing you will want to do is create an account with a payment method you would like to use.
The most popular methods you’ll see on the Buy BTC / Sell BTC tabs are through Zelle and Strike. The first thing you’ll notice if setting up a Zelle account is that you have to give up your real name, email and/or phone number attached to your account.
Again, “I thought this was KYC Free, now I have to give up my name here too”
Remember, this is a peer-to-peer, the only person who will see this information is the person you are buying bitcoin from or selling bitcoin to. Still, there are ways to mitigate the risk of leaking your identity by using a Zelle with a dedicated email without personal identifiers.
Or you can just not use Zelle entirely.
Strike is a much more private way to conduct dollar for bitcoin transactions in Bisq as it only requires giving up your username. (Also note: purchasing bitcoin IN THE Strike app is NOT KYC-Free, this method only works if you pair it with Bisq as you are sending dollars to a peer, the app does not know that you received bitcoin through Bisq)
Now that your payment account is created you can Go to ‘Buy BTC” and find sellers offering bitcoin in exchange for your payment method.
For new accounts, you will notice most offers do not match your account. This is because either they are payment methods you didn’t create an account for or it is above your initial limit. You are only allowed 0.01 bitcoin maximum per trade until a peer signs your account and the account is >30 days old.
Once you find an offer you like you will select “Take Offer”. You will now need to fund your trade wallet with bitcoin.
Since Bisq is peer-to-peer and non-custodial, both traders will put up a security deposit to fund an escrow wallet. Usually trades go smoothly, but this incentives trade completion and would be used in any disputes (disputes are handled by a third party arbitrator that also posts a security deposit).
It is good to know that: Bisq does not hold any bitcoin. This security deposit is held in a 2-of-3 multisignature address controlled solely by the trading peers. Essentially this trading deposit cannot be stolen outright by Bisq or your trading partner.
Protip #2: Your Bisq wallet should only be funded with Non-KYC Bitcoin or Whirlpool Conjoined Bitcoin to ensure your privacy
Funding your Bisq Trade Wallet should ideally be done with ATM bitcoin as in step one (which may require a few ATM trips). Or if you only have access to KYC sources of bitcoin prior to Bisq, you should run your bitcoin through several Coinjoins with Sparrow wallet or Samurai wallet. Make sure to always keep your mixed coins, Non-KYC’d coins and KYC’d coins separate.
Upon funding your trade wallet make sure to password protect your Bisq Client and make sure to write down and store your Bisq Wallet seed words in a safe place.
Once your wallet is funded, you will confirm trade and wait for 1 blockchain confirmation. You will then see the seller’s payment details to send to. You will enter the seller’s payment details into Strike, or Zelle and wait for confirmation that they received your payment. (This wait may be a bit nerve wrecking during the first trade, but remember their bitcoin is locked up until this process is complete)
Once seller confirms receipt, the bitcoin from the trade and your initial deposit will be sent into your Bisq wallet and you just completed your first Non-KYC P2P bitcoin trade! All subsequent trades will be significantly easier, and once your 30 days are up on your new account you can start trading in larger amounts.
For a detailed image on how Bisq works see below (or check out their whitepaper):
For a walkthrough follow BTC Sessions with this 30 minute youtube video:
Hodl Hodl is a Peer-to-Peer exchange similar to Bisq, however, this is web based and is not done through standalone software/node. As a result, you may lose a bit of security and privacy. Hodl Hodl is Bitcoin only, however my only other main concern is their arbitration method is slightly less robust and decentralized than Bisq’s. If you are okay with these two risks you may find some offers for Non-KYC bitcoin here that you like.
LocalCryptos is a Web based peer-to-peer marketplace similar to Hodl Hodl, the main difference is this also has several other cryptocurrencies. Buyers and sellers post ads on LocalCryptos, offering to trade crypto through different payment methods. My main issue here is again the fact that it is web based and has a bit less robust/decentralized arbitration process than Bisq if a dispute would arise. If you are okay with these potential risks you may find also find good bitcoin offers here
Other Non-Kyc Methods
Agora Desk- Another web-based Non-Kyc P2P exchange like the two mentioned above with several cash offers for Bitcoin and local meetups
Azteco Vouchers- Buying bitcoin vouchers with cash. This method requires a vendor near yrou. (they are sparse)
You can also earn Bitcoin through jobs: https://www.reddit.com/r/Jobs4Bitcoins/
Buy Bitcoin through people in person
Or Mine it (this may not be as easy as it sounds)
If you made it this far, you are likely determined to acquire some KYC-Free bitcoin. As you may have noticed, you are certainly giving up some convenience up front in doing so. You are also likely to pay higher premiums if you need bitcoin in a hurry (You can set your own price on P2P exchanges, however offers may sit for a while or not get taken if there is not at least a 2% premium).
You may also find it difficult to acquire large amounts at once.
With that being said, what you gain in going this route is more peace of mind, privacy, and more self-sovereignty which is priceless.
Reminder keep your KYC bitcoin separate from your Non-Kyc bitcoin and if you cannot acquire non-kyc bitcoin prior to using one of the above exchanges, make sure you run them through a coinjoin with Samurai Wallet or sparrow wallet. Coinjoining will give you forward looking privacy, but you are always in record as having purchased bitcoin from the centralized exchange.
If you need a refresher on Bitcoin Self-Custody make sure to read our article here.