Bitcoin was first released to the public in the year 2010. As it was the world's first form of cryptocurrency, no one knew what to expect. As a result, the popular cryptocurrency was largely unregulated. The online crypto trading platforms and online cryptocurrency exchanges where it was traditionally traded were equally unregulated. However, as the years progressed and Bitcoin exploded in popularity, the world's governments decided it would be best to establish a set of laws to regulate this global currency.
This global regulatory push has caused Bitcoin trading platforms and exchanges to face increasingly tight government regulation on a global scale. These platforms are now treated just like any other financial services business and are required to retain personally identifiable KYC, or know-your-customer, data. Many Bitcoin traders would prefer to keep their data to themselves but, as a result of these government actions, conveniently maintaining online data privacy when buying bitcoins has been made more difficult. Fortunately, there are still ways to buy bitcoins anonymously online, but you'll need a few software tools.
You'll need to use a peer-to-peer exchange like LocalCryptos and LocalBitcoins. These sites allow you to find a suitable Bitcoin trader by filtering by location, fiat currency, and bitcoin amount. By connecting directly with other traders, users can reduce the likelihood of exposing their data to unrelated third parties. However, this alone is not enough to establish complete anonymity.
Tor Browser Network Encryption Stack
The first part of this software stack is the Tor browser network itself. The Tor browser network is a free internet browser that operates by routing your internet activity through a heavily encrypted overlay network that features over 6,000 relays worldwide. This makes it incredibly difficult (but not impossible) for an individual to be identified.
The second part is a VPN, also known as a virtual private network. VPNs protect your data by creating an encrypted tunnel that hides your IP address. Nord VPN is a popular example.
The final part of the stack is a software called TAILS, or The Amnesic Incognito Live System. This software forces all incoming and outgoing connections to go through the Tor browser network while also automatically blocking any non-anonymous connection attempts.
Decentralized Bitcoin Tumblers
Bitcoin tumblers are a relatively new service designed to improve Bitcoin privacy. They operate by randomly mixing a pool of bitcoins. Your bitcoins are then returned to you at a different address. It is important to use a decentralized tumbler like Bitcoin Mixer, which creates a direct connection to the tumbling infrastructure without storing any personally identifiable data.
Maintaining privacy is getting more and more difficult for Bitcoin traders. However, if you're willing to be resourceful, there are still great ways to protect your bitcoins and your data now and in the future. If you're ready to buy bitcoin, start reaching out to cryptocurrency services.