There’s no denying that it’s easy to buy Bitcoin today, with a wide range of exchanges to choose from. But since this industry is still relatively new, it is natural to be concerned about your privacy when entering the market.
So, that begs the question: can you buy Bitcoin without ID verification using your credit card, or is it impossible?
Bitcoin and privacy
What is important to remember here is that privacy is an important part of the cryptocurrency industry and is one of the cornerstones of Bitcoin’s design. Blockchains are incredibly secure and allow you to add transactions to the network without showing your real name. Blockchains also use hashing to increase user security by encrypting information to prevent transactional crimes and store private data.
But Bitcoin’s emphasis on security and privacy has given it the false reputation of being entirely anonymous. In fact, Bitcoin transactions can be tracked, which is often done by law enforcement when investigating crypto-related crimes.
On top of that, Bitcoin the blockchain ledger is entirely public, which means anyone can see it and the transactions you’ve made. Although your name and contact details will not be displayed on this register, your wallet address will be displayed.
Additionally, many exchanges require you to provide and verify your identity before you can use your account. Therefore, the exchange provider you use will know exactly who you are.
So, can this be avoided? Although you cannot prevent your transaction from appearing on the blockchain record, you can buy Bitcoin with your credit card without verifying your identity.
How to buy bitcoins anonymously with a credit card
If you want to buy Bitcoin without identity verification, you will still need a cryptocurrency wallet. So, before making your purchase, make sure you have set up a Bitcoin-compatible hardware or software crypto wallet. Examples of good Bitcoin-compatible wallets are Exodus, Mycelium and the Ledger Nano X.
Now, there are different ways to buy bitcoins anonymously.
1. Peer-to-peer (P2P) marketplaces
Peer-to-peer (P2P) marketplaces allow you to buy bitcoin from an individual seller rather than from an exchange or other large organization. These platforms cut out the middleman, allowing you to buy BTC directly without identity verification. Some peer-to-peer marketplaces even allow you to pay the seller in person in cash.
Take Paxful, for example. This peer-to-peer marketplace lets you buy Bitcoin from individual sellers using a wide variety of different payment methods, such as Payoneer, PayPal, and of course, your credit card. You can also do this without incurring any additional fees, as Paxful does not issue fees to buyers. However, sellers must pay a 1% fee for each transaction.
another popular peer-to-peer platform, LocalBitcoins, is also ideal for buying Bitcoin without identity verification. This platform allows you to buy Bitcoin using your credit card, as well as PayPal, Western Union, and several other payment processors.
However, on peer-to-peer markets, you may have to settle for a higher purchase price than on a typical exchange, so keep that in mind if you’re trying to stick to a budget.
2. Software wallets
While many software wallets require identity verification, this is not always the case. For example, some wallets allow you to buy bitcoins anonymously to keep your identity a secret.
Take the Lobstr wallet, for example. This software crypto wallet allows you to buy Bitcoin without providing identity verification. While Lobstr is primarily designed to store Stellar, or XLM, it supports a wide range of additional cryptocurrencies and allows Bitcoin to be purchased. This wallet also uses a PIN code and two-factor authentication to increase your security levels.
Verification processes vary with each cryptocurrency exchange. Some have made identity verification mandatory, while others have left it optional. So if you want to buy Bitcoin while skipping identity verification, the latter type of exchange may work for you.
KuCoin is an example of a crypto exchange that leaves identity verification up to the user. Perks are offered for identity verification, but you will still be able to trade without them. KuCoin supports trading hundreds of cryptocurrencies including Bitcoin.
It should also be noted that you can buy Bitcoin without identity verification using Bitcoin ATMsbut the majority of these machines only accept cash payments.
Buy Bitcoin Anonymously
Using the methods and platforms listed above, you can buy Bitcoin without verifying who you are. This allows you to maintain your privacy when buying cryptocurrency, which is a big plus if you value your identity online.