There’s no denying that it’s easy to buy Bitcoin today, with a huge array of exchanges to choose from. But with this industry still being relatively new, it’s natural to worry about your privacy when stepping into the market.
So, this begs the question: Can you buy Bitcoin without ID verification using your credit card, or is this impossible?
Bitcoin and Privacy
What’s important to remember here is that privacy is a huge part of the cryptocurrency industry and stands as one of the cornerstones of Bitcoin’s design. Blockchains are incredibly secure and allow you to add transactions to the network without displaying 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 focus on security and privacy has given it the untrue 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 this, the Bitcoin blockchain ledger is entirely public, meaning anyone can view it, along with the transactions you have made. While your name and contact details will not be displayed on this ledger, your wallet address will be shown.
What’s more, 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? While you cannot prevent your transaction from being shown on the blockchain record, you can buy Bitcoin with your credit card without verifying your identity.
How to Buy Bitcoin Anonymously With a Credit Card
If you want to buy Bitcoin without ID verification, you’ll still need a cryptocurrency wallet. So, before making your purchase, ensure you’ve got a hardware or software crypto wallet set up that’s compatible with Bitcoin. Examples of good Bitcoin-friendly wallets are Exodus, Mycelium, and the Ledger Nano X.
Now, there are a variety of different ways through which you can buy Bitcoin 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 eliminate the middleman, allowing you to purchase BTC directly without ID verification. Some peer-to-peer marketplaces even allow you to pay the seller in-person with cash.
Take Paxful, for example. This peer-to-peer marketplace allows you to buy Bitcoin from individual sellers using a huge variety of different payment methods, such as Payoneer, PayPal, and, of course, your credit card. You can also do this without incurring any additional charges, as Paxful doesn’t issue a fee to buyers. However, sellers are charged a 1% fee for each transaction.
Another popular peer-to-peer platform, LocalBitcoins, is also great for buying Bitcoin without ID 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 marketplaces, you may have to settle for a higher purchase price than you would on a typical exchange, so keep this in mind if you’re trying to stick to a budget.
2. Software Wallets
While many software wallets require ID verification, this is not always the case. For example, some wallets allow you to buy Bitcoin anonymously to keep your identity a secret.
Take Lobstr wallet, for example. This software crypto wallet allows you to buy Bitcoin without providing ID verification. While Lobstr is mainly designed for storing Stellar, or XLM, it supports a wide range of additional cryptocurrencies and allows for the purchase of Bitcoin. This wallet also uses a PIN and two-factor authentication to increase your security levels.
Verification processes vary with each cryptocurrency exchange out there. Some have made ID verification mandatory, while others have left it optional. So, if you want to buy Bitcoin while skipping identity verification, the latter kind of exchange may work for you.
KuCoin is an example of a crypto exchange that leaves ID verification up to the user. Perks are offered for ID verification, but you’ll still be able to trade without them. KuCoin supports the trade of hundreds of cryptocurrencies, including Bitcoin.
It’s also worth noting that you can buy Bitcoin without ID verification using Bitcoin ATMs, but 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 online identity.