Bitcoin is often described as an anonymous currency because it is possible to send and receive bitcoins without giving any personally identifying information. However, bitcoin by itself is in most cases not 100% anonymous. In fact, bitcoin is pseudonymous: sending and receiving bitcoins is like writing under a pseudonym. If an author’s pseudonym is ever linked to their identity, everything they ever wrote under that pseudonym will now be linked to them. In bitcoin, your pseudonym is the wallet to which you receive bitcoin. Every transaction involving that address is stored forever in the blockchain. If your address is ever linked to your identity, every transaction will be linked to you. But achieving reasonable anonymity is quite easy.
Buy Bitcoins Anonymously
What you can do in the first place is to buy bitcoins anonymously.
- The best option is to buy them with cash to avoid on-line exchanges totally. Most online exchanges require verification where you need to upload your ID and similar. You can buy bitcoins with cash on an atm or meet the seller personally. There is more information on how to do that on our buy bitcoins with cash section.
- The second best option is to buy them online at VirWox. This is not really completely anonymous as you need to reveal something, but still much better than most of the bitcoin exchanges that require a bank account and a personal document. Here you do not need anything like that, you just need a free account Virtual World Exchange. Using this account you can buy another currency – Second Life Lindens (SLL). You can buy SSL with various options, like PayPal and Skrill, but considering anonymity a good option is paysafecard that you can buy in any shop. With paysafecard, you can pay cash and anonymously fund your VirWoX account without id, bank account or credit card. Then you just easily convert your SLL to bitcoins and no verification is needed for doing that.
- Another option to get bitcoins is to get an anonymous bitcoin loan.
- Buying bitcoin with credit card anonymously is difficult, but here are a few ideas to buy bitcoin with credit card without verification.
Mix Your Bitcoins
If you already own your bitcoins, especially important is that you mix your bitcoins with other bitcoin owners. A bitcoin mixer, also known as a bitcoin laundry or bitcoin tumbler, is a service that breaks the link between you and your bitcoins, mixing your funds with others so the trail back to you is confused. While bitcoin mixing may not guarantee 100% anonymity, it does provide a very high level of anonymity, and it would be a very painful task for anybody to link you with properly mixed coins.
We recommend using a quality online mixing service such as Cryptomixer or CoinMixer to periodically exchange your bitcoins for different ones which cannot be associated with the original owner. In order to further enhance the security of your transactions they provide the opportunity to use two or more forward addresses as well as convenient time delays. They immediately delete all archival logs related to your transactions. You can also use Shared Coin for that purpose as it is free but a bit more complicated. Also, if you use anonymous Tor browser, you may want to try Bitcoinfog.
Please note that there are many scams out there that claim to offer bitcoin mixing services. The problem is that you will send them bitcoins and will never get anything back, so please stay with our recommended services to avoid the hassle and check your provider on forums!
Anonymous Bitcoin Wallet
As bitcoins are generally stored in a software program known as a bitcoin wallet and all of the above does not help, if your wallet is identifiable with your personal information. If you wish to remain fairly anonymous when using bitcoins, such as paying for an adult website, then you should at least use a wallet registered to an anonymous and disposable email address.
Also use a different wallet for each transaction to avoid multiple transactions being traced back to you. This is like maintaining multiple separate identities. An easy way to maintain multiple wallets is to use MultiBit, a simple and lightweight software wallet that allows you to manage multiple wallets from one program. As for anonymous bitcoin desktop wallets, we are still searching for the best choice. Currently, the best advice is to use Tor browser to connect to an online-wallet.
If you want even more anonymity, we suggest to make a paper bitcoin wallet. Maybe the easiest way is to use the code at bitaddress.org (beside anonymity you will increase security too, more info here).
The Open Bitcoin Privacy Project has released their first full report on the levels of privacy found in various bitcoin wallets. The best and most anonymous bitcoin wallet is Darkwallet, another two good wallets in terms of anonymity are also Armory and Mycelium.
Anonymous Bitcoin Debit Card
You can order plastic or virtual debit cards that can be nominated in USD, EUR or GBP. All it takes is a valid email address and basic personal information to sign up, and once you requested your debit card, it will be sent to your home address. Unfortunately this debit card is that is not available to residents of the United States.
Get 25% discount on all available cards if you register with this link.
Bitcoin transaction records
While using bitcoins is an excellent way to make your purchases, donations and p2p payments, transactions are never truly anonymous. Bitcoin activities are recorded and visible publicly via the blockchain. This is a comprehensive database that keeps records of bitcoin transactions.
Almost all exchanges require you to verify your identity by sending scanned personal documents. Also they are required to report large transactions to the proper governmental authority. When you use bitcoin to pay for goods and services, you will also many time need to provide your name and address to the seller for delivery purposes. This means that someone with an interest in tracking your activities can use your ID information as a basis from which to track your future transactions or to study your previous activity. In short, you have compromised your security and privacy.
That is why, if you want to stay anonymous, you must do both – get and spend bitcoins anonymously as described above.
Spend Bitcoins Anonymously
This part really depends on what you want to get for your coins. The main idea to stay anonymous is that at purchase process you do not reveal any personal information. There are many many services (mostly online) that accept bitcoins as a payment method and they do not require any kind of personal information.
Staying anonymous is easy if you need an online service. Subscription to xxx website, anonymous online casino, gambling and dice, anonymous sport bets, vpn, advertising, donating to wikileaks just to name a few.
It gets more complicated when you need some stuff to be delivered to you physically.