Cryptocurrencies are considered to be anonymous, private, secure and fully untraceable. Nothing can be further from the truth. Cryptocurrencies should not be considered private and they can be traced down to the blockchain wallet that either sent or received them. The same applies to Bitcoin and any other digital currency. The myths about buying Bitcoin for carrying out a series of anonymous transactions in the Darknet are just urban legends and have nothing to do with reality, since the authorities have long developed the necessary instruments to track and trace any digital assets.
When it comes to the question of how to protect your privacy, the user must think first and foremost about their access credentials and the safety of their devices. Most platforms and mobile applications for trading now apply two-factor authentication, as well as a host of other devious measures for ensuring user privacy. But over and out ID verification is still the norm for any centralized financial platform, as the authorities will be pressing said platforms to force their users to abide by Know Your Customer and Anti-Money Laundering requirements.
The blockchain may be considered immutable, but using a blockchain locally for business purposes makes no sense due to its cumbersome nature. As such, only large enterprises and sprawling financial ecosystems need the distributed ledger. Needless to say, cookies are used on such platforms as the Binance exchange, which tracks its users and provides exhaustive reports on their behavior to the relevant authorities upon request. All users are monitored and there are myriad stories of people having their accounts blocked after the slightest suspicion that they are performing any actions deemed in violation of sanctions regimes or any other requirement stipulated by the overseeing authorities.
So, when you decide that you have to buy Bitcoin anonymously, think first about whether you really need that Bitcoin in the first place. If it is imperative and you cannot live without the digital asset, then there are actually some ways that will allow you to acquire the coveted Bitcoin in an anonymous fashion.
There are some cryptocurrencies like Dash, which allow their holders to remain hidden from oversight when making purchases. Essentially, these cryptocurrencies use an untraceable cipher that does not allow any individual coin to be linked to a specific wallet address. Since the wallet address is used as the unique identifier of its holder, when tracing cryptocurrencies of that could be of interest, the authorities always try to identify the wallet. It acts as both the contact address and immutable proof of the transaction in question which resulted in the investigation.
Bitcoin is far from anonymous, since its blockchain is in open access and anyone with a blockchain explorer and view which coin is located on which address and how it traced its path. The records of every transaction of every coin are hashed in the blockchain, making it the issue of just a few clicks to identify and trace any specific asset. However, if one wants to acquire Bitcoin, there are some truly creative ways, such as using a Bitcoin ATM. Though less popular nowadays than during the initial cryptocurrency craze, Bitcoin ATMs give the ability to buy Bitcoin using fiat or other cryptocurrencies. The surviving units can be found in some cities in Japan, and a few in Dubai. However, the unreliability of the devices and the limited use they provide has spelled their downfall in recent years.
Some go so far as to buy Bitcoin anonymously in the UK using cash that is handed over in person, with the asset being transferred to a designated wallet address or handed over on a cold wallet. Other ways to buy Bitcoin anonymously include the following: Peer-to-Peer exchanges; Decentralized exchanges.
The decentralized exchange is becoming one of the leading methods to buy Bitcoin using credit card. The given approach is both anonymous and reliable, since decentralized exchanges offer almost the same functionality as their centralized counterparts and give the benefit of even higher security. By having no centralized authority, decentralized exchanges are freed from the requirement to abide by the regulations imposed by the authorities, leaving their users free to sign up without providing any personal data.
Bitcoin is still the heavyweight of the cryptocurrency market in every respect, Thousands of retail investors are salivating at the thought of having at least one such digital asset in their portfolios. For example, in order to buy Bitcoin in Australia, one farmer spent a week in the bush hunting for bullfrogs that he flash-froze and sold only to realize that the price of Bitcoin had risen by the time he returned from the wilderness. Anonymity can be thrown out the window if one decides to buy Bitcoin with a debit card, as the card’s details will instantly identify the holder and give the related authorities the necessary leads they need. Needless to say, such extremes are only applicable if one has something to hide or is planning on committing a crime with the cryptocurrency they are purchasing. If the means and aims are clear and true, users first have no need to buy Bitcoin anonymously, and secondly the authorities will not have any reason to track them down.
With 2023 underway with all of its difficult inheritances from the past year, chances are quite high that Bitcoin will remain within the same price range it is currently lingering in. If such a prospect does hold true, then there is a good chance that the digital currencies market in general will stagnate and no innovation will be seen. We can, however, witness the collapse of some other major market players as the weight of interdependence and general corruption presses hard on the bloated investment firms and infrastructures catering to exchanges.