When making an online transaction, several people like to stay anonymous for various reasons. And to achieve anonymity, they tend to use Bitcoin – a peer to peer, decentralized, digital currency.
It is often said about Bitcoin that it provides complete anonymity – which is not true. The Bitcoin transactions are not completely anonymous. They are made through Bitcoin exchanges. And the exchanges involved in a transaction may request you to provide your personal information, such as email address, a photo of yours, government ID, etc. and by using this information, they can trace and keep track of all your Bitcoin transactions.
(Learn about what are the top Bitcoin exchanges to trade coins)
To sort this out, we are going to discuss here some simple methods that will help you make anonymous transactions. Read carefully.
Stay Anonymous – Buy Bitcoin with Cash:
Wondering how to buy Bitcoin anonymously? Use cash! Yes, this is one of the simplest methods to buy Bitcoin anonymously. However, cash is not the only option – there are some other methods too, and we are going to discuss three of the most common ones here.
Buy Bitcoin Through ATM:
The ATMs give you complete anonymity to buy Bitcoin through cash. The machines don’t require any personal information or something else that a third party can trace. All you have to do is to go to your nearest ATM and make the transaction.
To buy the coins, all you have to do is enter your Bitcoin address and the number of coins you wish to buy. If you don’t have an address, just specify that you don’t have one and the machine will automatically generate a paper address for you.
Later on, using that address, you can import the private key and transfer your bitcoins to PayPal, or wherever you like.
Buy Through Local Bitcoin:
Another way to buy Bitcoin anonymously is Local Bitcoins. It’s a way of buying cryptocurrency through cash and in person. Through Local Bitcoins, you can find someone who is willing to sell bitcoins in exchange for cash in or near your area.
In order to use the service, you will need to sign up to their website. There is no documentation involved, so the process is completely untraceable.
Use Your Prepaid Card to Buy Bitcoin:
Prepaid credit card is another option to stay anonymous. The card is easily available at any supermarket or a convince store. Once you have the card, you can use it to buy the cryptocurrency without having to provide any personal information.
Some Methods That Are Just Partially Anonymous:
If you don’t have access to the above-mentioned methods, you can use the ones that are partially anonymous. These methods don’t require you to provide any ID. However, a phone number is still needed to enjoy the service.
Let’s take a look at some of them down below:
Wall of Coins:
A peer to peer Bitcoin exchange which only requires your phone number to use the service. Wall of coins currently operates only in Latvia, US, Argentina, Canada, Poland, Philippines, and Germany.
Acts like an escrow between a buyer and a seller. BitQuick takes the cryptocurrency from a seller and instructs the buyer to deposit cash into the seller’s account. Once the cash is deposited, the coins are released.
BitQuick also requires your phone number for its services.
These are some ways to trade Bitcoin with complete/partial anonymity. If you are looking to buy coins without being traced, it will solve most of your problems.
In the month of April 2018, 17 millionth Bitcoin was mined. But why this number is significant? Well, only four million tokens are left to mine. Bitcoin’s blockchain protocol is what makes Bitcoin mining a bit difficult, and the Bitcoin reward for mining a block also splits every 210,000 blocks. As seen, 12.5 BTC reward is received by the miners for unlocking a new block.
Mining of the Last Bitcoin
At this time, miners are deeply encouraged to mine so that they can get gradually more treasured Bitcoin tokens as a reward — before the supply reaches the capacity. However, when 21 million market cap is hit, there won’t be any Bitcoin rewards for miners. Though, transactions will be still required to get validated and stored on blocks, so that miners can profit from the transaction fees.
- Last year, the issue of scalability – block capacity – transaction costs showed up.
- 1MB size limit for blocks was implemented by Nakamoto for halting miners making bigger blocks that were expected to be excluded from the network, as it could cause the blockchain to split.
- At that time, the limit was big enough because of the small number of transactions. However, apprehensions that elevated were ultimately comprehended as Bitcoin advanced in popularity.
- Ultimately, Bitcoin Core developers came up with a solution under the name “Segregated Witness,” which is more commonly known as SegWit.
- Fundamentally, Segwit splits non-signature data from signature data of all transactions — significantly reduces transaction sizes that are stored on a block.
- Moreover, it cancels out transaction flexibility by eliminating signatures from transaction data, paving the way for ‘Lightning Network’ incorporation.
Eventually, Segwit was implemented in August 2017, as a foremost stakeholder from the major Bitcoin mining pools and Bitcoin companies – for a solution to high transactions fees instigated by an accumulation due to the block size limits.
Core warning — the implementation of Segwit was possible because of the consent of the Bitcoin community. Even though there were huge concerns such as the inadequacies of Segwit2X, the community was divided up and the change was certainly not implemented.
- Since August 2017, the implementation of Segwit has been slow across the global network. However, Bitfinex and Coinbase only presented the alteration in February 2018.
- The launch matched with reducing the transaction fees – a testament to the envisioned outcome of Segwit incorporation.
- SegWit’s implementation laid the foundation for second layer solutions as well, in order to improve the network of Bitcoin.
- The most projected one is the Lightning Network – it will do the same as the SegWit – though on a grander scale.
- In terms of layman, the Lightning Network lets users excavate many payment channels amid themselves – off the Bitcoin blockchain.
- The channel is going to be opened and recorded on the blockchain, though transactions will be made “off chain” till the payment channel is closed.
- Basically, Bitcoin is deposited in this channel by users, so that they could make transactions by transferring potential of possession to each other.
- When they plan to close the channel, users take their part of the total sum – the ownership of those sums is recorded on the blockchain.
This second layer solution matters a lot, as it will significantly upsurge the speed of transactions and the whole network. But if we talk about the future of bitcoin mining, this does stance few interesting questions for miners in the upcoming time. Once all 21 million Bitcoin have been mined – transaction fees would be the one and only incentive for miners. If the Lightning Network is completely integrated by that time, there’d be quite fewer transactions being recorded per-day. This could at the same time affect the amount of money that miners will be getting from transactions. Though, if we look 100 years from now, it is expected that all of these issues will have been solved by the wider crypto-community and Bitcoin Core developers.
Did you know that currently, such a large number of individuals are purchasing and using Bitcoin that the system is really encountering surprising delays? It’s hard to believe, but it’s true – bitcoin is so prominent with individuals rushing from all areas of life because digital cash brings a massively wide spectrum when compared with all other payment arrangements.
With mass adoption comes a storm of queries, most prominent one being “where to buy Bitcoin” on wiki sites.
Here we have discussed the top three Bitcoin exchanges to buy bitcoins from:
Kraken is turning into a reputed bitcoin exchange, with many markets served. Europeans cherish it just as much as Americans since they function admirably through SEPA, have a simple confirmation process, and are extremely knowledgeable when it comes to cryptography and security. Since the start of 2017, Kraken has been re-positioning themselves as a crypto exchange by including different new altcoins.
Bisq (otherwise known as “Bitsquare”) isn’t to be missed for the more technically progressed. A decentralized p2p stage that keeps you super protected. More than 60 digital currencies can be exchanged and you can even buy BTC utilizing a bank exchange, escrow, and trusted outsiders.
GDAX is incredible for specialized merchants and offers great liquidity. Deposits are in USD and can be processed just as quickly as withdrawals. It likewise happens to be the best Ethereum trade for genuine players in this space.
So these are the best bitcoin exchanges in our opinion. Next time, hopefully, you won’t have to ask where to buy bitcoins because now you know the best places to buy it.
Bitcoin and other virtual currencies are assets, but calling them currency is a bit exaggeration. The digital coins do not meet the fundamental attributes needed to be classified as currency. These are the words of the Chinese Central Bank adviser, Sheng Songcheng.
The advisor made these comments in an interview with a financial magazine ‘Yicai’ this late Thursday.
The Main Story:
“Bitcoin does not have the fundamental attributes needed to be a currency as it is a string of code generated by complex algorithms… But I do not deny that virtual currencies have technical value and fall under the category of ‘assets’,” he said.
He made these comments after the Chinese Central Bank increased the scrutiny of Bitcoin exchanges in the country earlier this year. The move introduced trading fees and prompted the companies to stop margin lending.
While many governments around the world are still contemplating on how to regulate and classify Bitcoin, the Chinese authorities have already classified Bitcoin as a ‘virtual good’.
Sheng also believes that Bitcoin after being capped in 2140 would make it impossible for it to become a medium of exchange as to become a medium of exchange a currency must meet modern economic development needs which Bitcoin lacks due to it being in an exceedingly small quantity.
He concluded by saying that the fiscal authorities in China should chip away at issuing a central bank virtual currency that it could direct and run properly.
News Credits: CNBC