Until and unless the information is revealed through purchase or other such circumstances, the identity of Bitcoin user behind the address is not known. However, by learning some advance techniques mentioned in this article, you will learn how to better protect your user privacy if you are bitcoin holder. If you are looking for how to cash out bitcoin anonymously, you are right at the right place.
Anyone can see the transactions and balance of any Bitcoin address because the Bitcoin transactions are stored permanently and publicly on the network. It is always sensible to adapt to better practices to protect your privacy.
Is Bitcoin Anonymous?
Bitcoin isn’t fully anonymous. The truth is Bitcoin is pseudonymous since every user has one public BTC blockchain address that you can tie back to that person’s crypto exchange account or their IP address, which truly identifies them if someone is willing put in effort to do some research.
Instead of asking “Is Bitcoin Anonymous”, it is better to ask, “to what level is Bitcoin anonymous”?
Bitcoin blockchain has a public key and transaction that can be seen publicly by everyone. But, no one will be able to tell who the person behind that public key is easily. Not revealing any identity to majority people makes it awesome.
The address of Bitcoin is totally random, and anyone can create information without giving out any personal information. The owner can send or receive bitcoins if he has either a public or a private key, without disclosing the identity.
When the transaction data is transmitted through the network nodes, it is sent to a random set of nodes. Therefore, the nodes can’t tell if the data is coming through the network or is sent from the sender.
But, if you sign up for an exchange that implements Know your Customer (KYC) before accepting you as a customer, then the exchanges already know you are the owner of that account. Then, it is also not too tough to tie public Bitcoin address to IP addresses. So, Bitcoin blockchain itself doesn’t reveal identity but external factors may contribute it to being only pseudonymous and not anonymous.
At this time, there are not many exchanges where you can do Crypto to Fiat trade without completing KYC. Public still doesn’t have full understanding of how Bitcoin works and how it is not anonymous. The understanding level is getting better but still lots to improve.
How Bitcoin Stores All Transactions In The Immutable Ledger?
Some of my friends still call Bitcoin is providing criminals a safe haven. According to them, it is untraceable and fully anonymous but that’s far from true. It’s actually the opposite. The blockchain is fully transparent and easy for cops to catch you if you do any wrongdoings.
Blockchain is a goldmine for cops and authorities trying to crack down lawlessness at any time for past illegal transactions. Any bitcoin transaction that ever took place will always be forever stored in the immutable ledger.
All transactions show up on public ledger and as such, Bitcoin public addresses are privacy preserving. But, it is not tough to extend and use analytical tools to get the real identity for cops and authorities. So, Bitcoin offers no privacy and you are not immune to law.
Mostly Know Your Customer (KYC) or Anti Money Laundering (AML) laws policies that exchanges strictly follow and Address Clustering techniques through blockchain analytical tools help provide identity to a Bitcoin address. So, you know now that Bitcoin offers little privacy but how can you convert bitcoin into cash anonymously?
There’s a slew of privacy preserving and privacy enhancing tools present for Bitcoin blockchain but they are all slightly advanced. You need to know what you are doing with them. If you want to become privacy expert in Bitcoin, please read on.
Different ways of converting Bitcoin into cash Anonymously
The following ways can help convert Bitcoin into cash anonymously.
Buy or Send Gift Cards with Bitcoin
There are a number of platforms that allow buying Gift cards using Bitcoins. Bitcoin is more mainstream in the last few years than the initial days.
Some of the platforms that offer buying gift cards with Bitcoin are
You just have to choose the gift cards you need to buy and add them to your shopping cart online. Select the payment method of Bitcoin payments, and make your payment with a blockchain transfer. Once a few confirmations are done on the blockchain by the miners, your gift card will be released to you. The process is as simple as that!
Trade Bitcoin Locally
LocalBitcoins is a service that enables trading Bitcoins locally in exchange for local currency. This service allows trading Bitcoins to almost 248 countries in total. The only thing they require in return is to complete your registration and verification.
The LocalBitcoins service has an android application that will provide you all the information that you require.
LocalBitcoins leaves it to the customer or community to deal with other customers directly in a true peer to peer fashion. They just exist as a platform to connect buyer and seller. You can think of LocalBitcoins as an analogy for Craigslist in the real world with one difference, where you buy and sell Bitcoin. There are generally multiple options of payment methods depending on your country. It’s totally secure with the great escrow service for buyers and sellers to transact.
Don’t opt for in-person transactions as a seller since there is a potential risk of meeting someone who you don’t know and they know that you have bitcoin. Malicious things can happen to you. On the other side, sellers know buyers will come with cash. So, avoiding in-person transaction is better.
The bottomline is that LocalBitcoins is still a great place to buy Bitcoins if you have some specific payment methods you want to buy bitcoin on. But, beware that prices always have a premium on top of exchange rates to transact on the platform. So, it is better to just transact on a trustworthy exchange if you are just going to do a vanilla transaction with normal payment method.
Use Tor-Onion Router To Convert Bitcoin Anonymously
There is a Tor browser that runs on the basic principle of anonymity, and it can be your preferred browser for converting Bitcoin anonymously. This browser doesn’t allow the tracking of the transactions made on its IP, thus keeping it anonymous.
If you are looking on how to cash out bitcoin anonymously, then you need to learn how to properly use technology. In this case, you need to know how to use Tor network and learn how to find and browse .onion websites.
Bitcoin Mixing is a strategy that lets bitcoin users mix their own coins with the coins of other users to protect their privacy. There are different types of Mixers which work in recent times.
Centralized mixers collect bitcoins and then send other coins in return. When many people use a single mixing service, it becomes difficult for the outsiders or crypto criminals to join the ingoing coins with the outgoing coins.
However, there are two major problems with Centralized mixers. The first is that the user needs to have complete trust for their privacy on the mixers because only the mixer knows which sender has sent which coins. Second, if the mixer refuses to send the return payment, they can easily steal the coins.
These mixers solved both the problems that Centralized mixers had. These mixers allow a big group of people to cooperate for making a single large payment, which means if a hundred users decide to send only 0.1 Bitcoin to a single address these mixers control, they merge all of these hundred transactions.
Every user gets back their 0.1 Bitcoin back without actually indicating where the bitcoins came from after the transactions are merged into a single transaction.
Use Bitcoin ATM
Exchanging the bitcoins in cash is the major facility the Bitcoin ATM machines provide. Bonus, these machines are present in high traffic areas such as shopping malls and railway stations.
Bitcoin ATMs are very much safe to use. Some of the Bitcoin ATMs don’t require a fingerprint or facial identity. This allows not to disclose the identity of the users.
Exchange Bitcoins in the Market
If you, as Bitcoin users, want to be on the safer side and can’t trust any website or owner to make the coins anonymous, you can try to join and exchange Bitcoins in the market. For benefits and other various reasons, you can sell Bitcoin because it is an asset in recent times.
For exchanging bitcoins in the market, you can either trade with tangible objects or Intangible objects. This is one of the easiest and most feasible ways of converting Bitcoins into cash anonymously.
Things that you can buy with Bitcoin
Bitcoin has gained very much popularity with growing popularity in many different countries and cities. You can convert your Bitcoins into cash and buy tangible or intangible objects with bitcoins, and some of the easiest ways to use your bitcoins in such a way are mentioned below:
Buy Tourism With Bitcoin
Many companies around the world are now accepting travel and booking payments with bitcoins. You can easily make a payment on their websites for booking hotels and rooms using your bitcoins. This is one of the intangible objects you can use your bitcoins in.
Some major examples include CheapAir, an Airline, which is now accepting the flights booking through Bitcoins too. Another one is Expedia, which is one of the biggest booking agencies and now accepting online payment of hotel bookings using bitcoins.
Travala is a blockchain travel project with its own token but they also accept Bitcoin for booking travel and they have a huge partnership with Booking.com
Buy Entertainment With Bitcoin
The big players in the industry like Windows Store and Xbox allows using bitcoins as the mode of payment to purchase movies, games, etc. You can load bitcoins into the account and use it every time you need it as your mode of payment. However, the only disadvantage is the bitcoins can’t refund one deposited.
For the small players, many platforms like Coinmall, Zynga, etc., allows using bitcoins for purchasing games.
Buy Foods and Drinks With Bitcoin
Having no change while paying for food is one of the basic problems we all face on a daily basis. To overcome this, many companies have now easy your life by allowing payment using Bitcoins.
Pizzacalifornia is based in California and allows purchasing Pizzas from the major Pizza houses based in California such as Pizza Hut, Papa Johns, etc. The companies are now accepting almost 50 cryptocurrencies in California. This is one of the Tangible objects you can invest your Bitcoins in.
Buy Tangible Purchases With Bitcoin
There are a number of real estates that are allowing property purchases using Bitcoins. They list the prices in US dollars or Euros in equivalence terms of the Bitcoins.
Additionally, various internet service providers, Satellites, TV dishes companies have started availing Bitcoin payment options, and you can easily purchase a one-time subscription using your bitcoins as the payment.
Shop With Bitcoin
Best of all, many online shopping stores have made it easier for cryptocurrency users. Etsy is one of the well-known stores that set Bitcoins as one of the payment methods.
Bitrefill is also one of the platforms that are now allowing purchase vouchers of top food chains located in the US like Dunkin Donuts, Cheese Cake Factory, Burger King, etc., using bitcoins.
Additionally, well-known Jewelers such as Reed Jewelers are having stores in almost 13 countries around the world and allow Bitcoin payments in both physical and online stores.
Conclusion – How To Cash Out Bitcoin Anonymously
The bitcoin transactions may or may not require personal information; however, Bitcoins are not completely anonymous. The owner must have the public or private keys to send and receive the bitcoins.
Sometimes, the Bitcoin transactions are linked to the real identities making it not so anonymous. Don’t try to perform any bad things with Bitcoin transaction. To preserve privacy, learn how to cash out bitcoin anonymously. This will protect you from criminals or terrorists that attack Crypto holders.
If you looking to earn some bitcoin in the easy way, then it is better to use crypto trading bot that’s built by reputed companies.
Some of the most prominent ways to do so are using Bitcoin ATMs if it is located in the nearby area, buy or send gift cards using bitcoins, trade your bitcoins locally, use bitcoin mixers and shop with Bitcoin.
I am a data analyst by profession who loves to crunch numbers at daytime and come home wondering how my passive income numbers for the day look like. I believe in being rich rather than looking rich. Follow me for Cryptocurrency, FIRE, Personal Finance, Credit Cards and Digital Nomad updates