3 legitimate ways to buy Bitcoin with a credit card and without verification:
- P2P exchanges
- Bitcoin ATMs
- Gift cards
Although Bitcoin is a decentralized and highly transparent blockchain, where every transaction is recorded into the public ledger, the anonymity it provides is also highly valued.
Anonymity has multiple advantages, like the ability to buy Bitcoin without disclosing identity or personal information. However, it also comes as a double-sided sword, which brings risks alongside the possibilities. Despite the fact that anonymousness is one of the key features of cryptocurrencies like Bitcoin, those planning to benefit from it will have the issues to overcome. In this article, we will review the advantages and shortages of anonymous transactions and also run through the ways of how to buy Bitcoin with credit card and no verification.
Is Bitcoin anonymous?
Bitcoin is a transparent decentralized blockchain. Generally speaking, it is not completely anonymous as all the transactions and payments ever made on the Bitcoin network are recorded into the public ledger. This means that data including both sender and recipient’s wallet addresses, the account balance, the amount, the time and date of the transaction is stored and visible.
Despite the fact that the names of the address owners are not publicly listed, they can be connected to the real person by following the IP addresses or transaction history.
The only way to make truly anonymous transactions is by not revealing the identity of the address owner or not connecting them at all. This is one of the reasons why numbers of Bitcoin addresses are only used once.
Pros of anonymous transactions
Since data is one of the nowadays most valuable currencies, privacy is as relevant as ever. Anonymity does not always mean the illicit activity is used, however, cryptocurrencies are one of the most favorite payment methods within the shady actors and the criminal community of the dark web.
There are various legitimate reasons though when anyone would prefer to use the unverified, or in other words, unidentified way to buy a Bitcoin:
- No proof of ID. There are over 1.1 billion people in the world nowadays without the proper proof of identity and thus without a proper bank account. Digital currencies like Bitcoin might be a possible store of value for such people. However, there are not many possibilities for them except cash to pay for digital currencies without ID verification.
- Confidentiality. The vast majority of cryptocurrency users that want to buy Bitcoin with credit card and no verification, are not the unbanked ones. These users value their privacy due to various reasons, including the confidentiality of a wide range of personal information and higher security of transactions.
- Security. Even the best-secured cryptocurrency exchanges might be attacked by the hackers, which in result means that your digital assets and also your private data (like passport details, address, contacts, account, and credit card numbers) might be stolen and used for various purposes including money laundering. Buying bitcoins without ID verification means there are no chances of identity thefts, which is of major interest to anyone looking for online security. Moreover, the unidentified transactions keep accounts safer from unpredictable governmental movements and cryptocurrency bans. The ability to keep your identity undisclosed might be the only way to keep your Bitcoins secure in the jurisdictions with the highly unpredictable authorities and the implemented cryptocurrency bans or even the possible confiscation.
Cons of unverified transactions
Frankly, buying Bitcoin with a credit card but without identity verification is not completely anonymous. A credit card as well as any bank account is linked with your name, meaning that buying Bitcoin with a bank transfer will be always traceable and easily connected back to the account owner.
Despite the fact of not being completely anonymous, buying Bitcoin with a credit card and no ID might come with a variety of shortages and bring certain security risks, including:
- Suspicion. Cryptocurrencies like Bitcoin as well as privacy coins are still one of the most used payment methods for illicit transfers, money laundering or terrorist financing. The popularity among shady actors, scammers, and tax evaders attracts a higher level of interest from law enforcement accordingly.
- Scams. Since unverified transactions are only available across the unregistered platforms like peer-to-peer (P2P) exchanges, there always remains the possibility of encountering the scammers, which means that you may not actually get the Bitcoin you have paid for.
- Higher price. Anonymity comes at its cost, meaning that buying Bitcoin without identification might cost more than doing it on the regulated exchange with the verified ID.
Three ways to buy Bitcoin with credit card and no ID
Since the cryptocurrency regulations increased across various jurisdictions, it has become more difficult to buy Bitcoins without identity verification. However, there are still legitimate ways to buy Bitcoin with a credit card and without authentication.
1. P2P exchanges
One of the most popular ways to buy crypto without ID checks is peer-to-peer (P2P) cryptocurrency exchanges. These exchanges do not hold your funds by themselves but act as intermediaries between two counterparties.
Since there are numbers of P2P exchanges supporting Bitcoin transactions, here are the most common and popular ones:
One of the oldest and most reputable P2P exchanges allows buying and selling Bitcoins anonymously by using various payment methods except cash. The phone number or email verification is enough, meanwhile, ID verification is not required.
The exchange applies the reputation rank for each user and also makes his public trading history available for anyone to check. It also offers escrow service, when the seller’s Bitcoins are held until he gets payment. The exchange applies 0.75% buyer’s fee and 0.25% buyer fee, additional escrow fees are also calculated.
LocalCryptos also creates a new wallet address every time the user makes a transaction. The wallet addresses however are tied to the user’s private key.
Another global non-custodial peer-to-peer exchange that trades Bitcoins without Know Your Customer (KYC) policies and Anti Money Laundering (AML) requirements is HodlHodl.
The exchange is also the first non-custodial Bitcoin trading platform integrated with the Bitcoin-focused mobile app Blue Wallet.
HodlHodl also supports escrow service and allows various payment methods, including credit cards and bank transfers. The exchange applies a 0.6% fee for every newly registered user and accordingly a 0.5% trading fee for anyone who passed the verification process.
Similar to LocalCryptos and HodlHodl, another P2P exchange Paxful does not require ID verification for creating an account. The exchange offers over 300 payment methods including credit card payments.
Paxful however allows buying up to $1.500 worth of Bitcoins without the ID verification. It also charges a 1% service fee. Although the exchange does not apply fees for buying Bitcoin, it does charge the sellers with the fee based on the market rate of Bitcoin at the time of the transaction.
2. Bitcoin ATMs
The second available option to buy Bitcoin with credit card an no verification is by using Bitcoin ATMs. There are numbers of Bitcoin ATMs around the globe, where it is possible to buy Bitcoins by paying in cash or by debit or credit card.
The vast majority of these ATMs allow buying digital assets anonymously, with only phone number identification needed. Since ATMs do not ask for KYC policies or Anti Money Laundering (AML) requirements they are a convenient option to secure the identity.
The disadvantage however comes with the relatively small number of Bitcoin ATMs across the globe. Although there are online tools like Coin ATM Radar or Coin Source to identify the location of any single Bitcoin ATM worldwide, they are mainly located in the big cities, leaving the periphery behind. Moreover, the crypto ATMs usually charge the high fees (7%-10%), that are not always worth paying for Bitcoin users.
3. Gift cards
Trading gift cards for Bitcoins is one of the trending options, especially since the coronavirus pandemic. The method is simple here as all you need to do is to buy a recognized gift card at a local store and sell it for Bitcoins on the digital asset exchange.
There are also online shops like eGifter, where you may find hundreds of various gift cards. Since there are discounts on different gift cards, there is always a possibility to make a great deal.
By making various payments and online purchases, we leave our digital traces. And as there are plenty of bad actors and hackers willing to use this information for their own purposes, the need to protect the sensitive data is growing.
Anonymity has multiple advantages, however, making the unverified purchases on cryptocurrency exchanges might come with certain risks. Cryptocurrencies including Bitcoins are still one of the most popular payment methods among cybercriminals, money launderers, or terrorists, which means that anonymous Bitcoin transactions may be of interest to the law enforcement or tax administrators.