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A few years ago, there were many cryptocurrency exchanges that didn’t require users to complete a KYC (know your customer) identity verification process. Due to pressure from regulators, however, most exchanges now won’t allow users to trade crypto if they don’t verify their identity.

However, there are still some options available to users who want to buy Bitcoin without ID. In this article, we’ll show you how to buy Bitcoin anonymously and give you some useful tips on how to enhance your privacy when transacting with Bitcoin.

Use peer-to-peer (P2P) Bitcoin marketplaces that don’t require KYC

Peer-to-peer (P2P) Bitcoin marketplaces are platforms where buyers and sellers can arrange deals to buy and sell Bitcoin directly with each other. The major advantage of P2P marketplaces is flexibility, as the buyer and seller can choose the price and payment method that best suits them.

While most of the major P2P marketplaces for Bitcoin now require users to verify their identity, there are some platforms that don’t request any information from users. However, if you’re very concerned about privacy, it’s not enough that you use a P2P marketplace with no KYC. You also need to use a payment method that preserves your privacy (for example, paying with cash in person).

Here are our picks for the best P2P marketplaces that allow users to buy Bitcoin without ID:

1. Samourai - $BTCwallet with a coin mixer integration

Samourai is a privacy-focused Bitcoin wallet with a feature called Whirlpool. Whirlpool makes it difficult to track the origin of your $BTCcoins by using the CoinJoin technology.

With CoinJoin, coins from different people are mixed together in one transaction. After this process, everyone still has the same amount of $BTC(minus fees), but on different addresses. This makes it difficult for any external observer of the blockchain to determine who the original owner of the $BTCcoins is.

The Whirlpool implementation of CoinJoin involves multiple quick and small CoinJoin cycles instead of a single slow CoinJoin cycle, which makes the entire process faster. When using the Whirlpool feature, users are charged with a flat fee, which means that you’ll be paying the same regardless of the amount of Bitcoin you want to mix.

Key features:

• A privacy-centric Bitcoin wallet featuring Whirlpool, utilizing CoinJoin technology to obscure $BTCcoin origins
• CoinJoin mixes coins from different users in a single transaction, distributing them to new addresses, complicating traceability
• Employs rapid, smaller CoinJoin cycles for efficiency, charging a flat fee for mixing any amount of Bitcoin

2. Wasabi Wallet - Built-in transaction anonymizing features

Wasabi Wallet is a Bitcoin wallet with built-in support for CoinJoin. Wasabi Wallet is an example of a non-custodial wallet, which means that the user is responsible for managing their own private keys.

CoinJoin transactions through the Wasabi Wallet incur a 0.3% coordinator fee. Of course, users also have to pay the fees required by the Bitcoin network to send a transaction. A nice perk is that the Wasabi Wallet waives the coordinator fee for if you want to anonymize less than 0.01 $BTCthrough CoinJoin.

By default, all network traffic to and from the Wasabi Wallet goes through the Tor network for additional privacy. However, the user can turn this setting off.

Key features:

• A non-custodial Bitcoin wallet with integrated CoinJoin, giving users control over their private keys
• CoinJoin transactions in Wasabi Wallet have a 0.3% coordinator fee, plus Bitcoin network fees, but fees are waived for under 0.01 $BTC
• It defaults to using the Tor network for enhanced privacy, though users have the option to disable this feature

3. Electrum - Lightweight privacy-focused $BTCwallet

Electrum is a Bitcoin wallet emphasizing security and speed. It ensures private keys remain encrypted on your computer, supports the recovery of funds through a secret phrase, and utilizes servers for instant access to the Bitcoin blockchain, negating the need for downloading it. The wallet supports SPV for transaction verification, offers cold storage options, and facilitates multisig setups.

Moreover, Electrum is customizable with third-party add-ons, including for support with hardware wallets like Ledger and Trezor. It's an open-source platform, released under the MIT License, underscoring its commitment to transparency and community involvement.

Key features:

• Stores the private keys on your device and encrypts them; it supports two-factor authentication and multisig wallets, which require multiple private keys for additional security
• Open source design allows for community scrutiny and contributions, enhancing security and trustworthiness
• Can be used for cold storage, allowing you to store your private keys offline and sign transactions in a secure environment.

Additional tips for crypto privacy

In order to protect your privacy when using any of the anonymous methods to purchase Bitcoin, we strongly recommend that you use a completely fresh Bitcoin wallet that isn’t associated with any other Bitcoin wallets. For example, if you use a wallet that you have already used to withdraw Bitcoin from a KYCd crypto exchange account, that would defeat the entire purpose of buying Bitcoin anonymously.

Besides using a privacy-focused Bitcoin wallet such as Samourai and Wasabi Wallet, you could also increase the privacy of your on-chain transactions by using a Bitcoin mixer service. However, Bitcoin mixers charge extra fees and often use centralized, trust-based setups, so it’s difficult to recommend them.

If you put a lot of value on privacy, Bitcoin is not really the best option. If it’s not absolutely necessary that you use Bitcoin, consider using privacy coins such as Monero or Zcash instead.

The bottom line

Compared to the early days of Bitcoin, buying Bitcoin anonymously has become significantly more difficult. However, there are still some options available on the market for users who want to purchase Bitcoin without providing ID.

If you’re looking for more tips on buying $BTC, make sure to check out our ultimate guide to investing in Bitcoin.

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