Staying unknown in the digital world might be difficult because your activities leave electronic trails. Bitcoin, for example, is known as the world’s first cryptocurrency and is considered to be an untraceable digital currency.
This isn’t, however, entirely correct. In reality, Bitcoin is a non-anonymous or pseudonymous cryptocurrency. Every Bitcoin transaction, therefore, leaves traces.
Are you looking for a way to sell your coins without being traced? Perhaps you are concerned that if you sell through an exchange like Coinbase or even LocalBitcoins, the IRS will somehow be able to see that you were the one selling the coins and now suddenly have more money in your bank account.
If this is what you’re worried about, then there is good news. There are services out there that allow people like yourself to buy and sell Bitcoin anonymously. For more information on crypto visit this site.
The first step of buying or selling anonymously is setting up Tor on your computer. This will make it nearly impossible for anyone to track what websites you are browsing, making it perfect for those who wish not to be tracked online while they purchase Bitcoin.
Next, you should sign up for a Bitcoin Mixer (a service that breaks the link between your old and new coins). There are several out there, like Helix, Bitcoin Blender, and Grams’ Dark Market.
Bitcoin Blender is pretty simple to use. It is important that after each deposit, you “clean” your coins with the provided cleaning tool (the Tor browser will automatically download it when you start this process).
If done correctly, anyone looking at blockchain activity will not be able to tell where your money came from or where it went. When making a withdrawal, make sure you send exactly one bitcoin’s worth of coins; if you send any more than that, then it won’t work as desired.
Some people have different techniques for further anonymizing their coins, but many of those suggestions also risk screwing up the process.
Table of Contents
Are Bitcoin Transactions Anonymous?
As we said previously, Bitcoin was mostly anonymous. What this means is that anyone can create an encrypted Bitcoin address on its public blockchain, and then use this address to receive and send them. However, when your transaction appears on the blockchain, you actually leave a digital footprint, and the problem is that this digital print never “fades”.
In fact, the blockchain works as a public record of all Bitcoin transactions on the network. This means that every Bitcoin transaction you make is stored immutably on the blockchain.
Your transaction history is open for everyone to see, including the addresses of the other people that were involved and the balance of your address.
To summarize, there is full-on public access to all of the Bitcoin transactions that were made until this day, even if the sender is pseudonymous (i.e. you don’t disclose your personal identity, only your wallet address). This is a double-edged sword as it makes Bitcoin a transparent cryptocurrency, but on the other hand, it jeopardizes your privacy.
Ways Crypto Markets are Fighting Anonymity
Anti-Money Laundering (AML) is a set of procedures, rules, and regulations that aim to prevent the financing of terrorism, as well as other financial crimes like identity fraud. As a result, Know Your Customer (KYC) is an AML regulatory approach, i.e., a method for verifying customers’ identities. This technique allows
Both AML and KYC protect consumers and their digital assets, but they also limit a user’s ability to remain anonymous when transacting in Bitcoin and other altcoins.
If you decide to use a cryptocurrency exchange that requires KYC verification before admitting you as a customer, keep in mind that the exchange will have access to your personal information.
This allows them to easily link the public address to your IP address. We recommend avoiding these sorts of Bitcoin exchanges if you want to convert Bitcoin into cash anonymously.
Trade Locally Using LocalBitcoins
LocalBitcoins is a peer-to-peer cryptocurrency trading website that connects buyers with sellers in their local area. The service acts as an escrow service, holding the seller’s coins until the buyer sends payment through the platform. This is a great option if you want to meet in person and exchange bitcoins for cash anonymously.
The downside of this method is that it does require some legwork on your part to find sellers who are willing to buy/sell Bitcoin without requiring identity verification. You can search for a “Bitcoin ATM” in your city or just visit LocalBitcoins.
Withdraw Cash from Bitcoin ATM Near You
The best way to anonymously convert Bitcoin into cash is by withdrawing it using a two-way Bitcoin ATM or BTM. This instrument allows you to not only buy and sell bitcoins but also withdraw the digital fiat currency in exchange for physical banknotes.
Moreover, there are hundreds of altcoins available on cryptocurrency exchanges that do not require users to complete identity verification before trading. If anonymity is your priority, buying one of these decentralized cryptocurrencies via an Altcoin Exchange will help you anonymize yourself completely.
Of course, this process requires advanced technical know-how and time commitment. But if anonymity is important for your needs, you will find no better crypto trading option than buying directly from another person without ID verification required.
Conclusion
This guide will help you stay anonymous when converting Bitcoin into cash. You can withdraw your coins using a local Bitcoin ATM or sell them on an advanced decentralized exchange that allows users to remain pseudonymous.
If you choose LocalBitcoins, keep in mind that this trading platform is not anonymous by itself and it even requires some of the most basic verification nowadays like email confirmation. If absolute anonymity is your priority, we recommend sticking with one of the options above or skipping verification altogether (like buying cryptocurrencies anonymously).
