J
jgm63
Visionary
- Oct 28, 2019
- 2,467
Written Nov 2019.
I can't advise how "safe" this guide is in terms of your anonymity.
Bitcoin can be more or less anonymous depending on how it's used.
Some approaches are discussed which may improve anonymity, but no guarantees can be given.
There are various analytic methods that may link bitcoin addresses with people, so it may be wise to assume non-anonymity.
You therefore have to weigh up the risks by considering local laws, researching what happened in other cases, etc.
You can try to improve anonymity (discussed below), but should assume you might not be anonymous, and consider the possible outcomes.
There are "safer" ways to use bitcoin than those in this guide, but they tend to require more effort (sometimes prohibitively so for some people).
This guide is for people who want something simple and easy, and are willing to accept the calculated risk (discussed above).
The exact buttons / button names, etc, on websites / programs, may change over time, so you may not be able to follow this guide "to the letter", and may have to "read between the lines".
This guide is based on using "coinbase". An alternative would be to buy bitcoins on "LocalCoinSwap", which can improve anonymity, however some people might find that to be too involved. "LocalBitcoins" was previously another option, but now requires personal ID. If "LocalCoinSwap" does the same, then it may cease to be a worthwhile alternative.
============================
Create a coinbase account
============================
This account won't be anonymous.
It will be created in your name. You'll need to upload ID photos, eg :
1) front of driving licence
2) rear of driving licence
You'll also have to give a phone number which can receive text messages (for authentication codes).
There may be a time lag while your ID is verified, although it can be near instant.
============================
Buy bitcoin
============================
Before we can send bitcoin to a seller, we must first buy it.
Login to coinbase and use the "Trade" button (top right corner)
Because bitcoin has transfer fees, you should add 2% on to the amount you are buying.
The 2% figure is just a "guess" since I haven't researched the fees in detail (you may be able to get away with a smaller amount).
e.g. If the seller asks you to send 200 USD worth of bitcoin, then buy 204 USD worth,
or if the seller asks you to send 0.1 bitcoin, then buy 0.102 bitcoin
You can enter the amount in your currency, such as GBP or USD etc.
Alternatively you can click the "BTC" button on the right, and enter a bitcoin amount.
In this case, it will usually be less than 1, since 1 BTC is about 7000 USD (at time of writing - it constantly changes), so check you have a zero, then a decimal point, eg "0.1", which would be about 700 USD at time of writing.
note : *Don't* buy "Bitcoin Cash" (BCH), you want "Bitcoin" (BTC)
Once you've entered the amount, click "Preview purchase".
Check everything seems okay, then click "Buy now".
Once the payment goes through you should see a "purchase successful" page.
There may be limits on how many bitcoin you can buy per week, so in some cases you might have to buy some, wait, then buy some more.
============================
Bitcoin addresses
============================
A "bitcoin address" is essentially the same idea as a bank account number, except it consists of letters and numbers, and is much longer.
e.g. an address looks something like : bc1qar0srrr7xfkvy5l643lydnw9re59gtzzwf5mdq
You should use copy/paste where possible (typing manually will be tiresome).
"Address" will be used to mean "bitcoin address" in the rest of this document.
When buying from a seller, you'll need to ask them the address they want the payment sent to.
*IMPORTANT* Ask the seller if they can create a brand new address exclusively for the payment you are making. "Clued up" sellers often do this already, so don't be shy to ask as it shouldn't be difficult to do. This improves anonymity.
It will also help if the seller has a good awareness of privacy, and performs some type of "coin mixing", or uses "wasabi wallet" and the "CoinJoin" feature, etc, so this could be a criteria in choosing who to buy from if multiple sellers were available.
============================
Method and anonymity
============================
Method 1 is simpler, but less anonymous.
Method 2 is better (more anonymous), but slightly more complex, and people who aren't good with technology may struggle a bit.
For both methods, anonymity is improved if the seller creates a new address exclusively for your payment (as mentioned above).
If you use method 1, and the seller doesn't create a new address, then that's the least anonymous case.
The highest anonymity (in terms of this guide), would be method 2, plus a "CoinJoin", plus the seller creating a new address.
=====================================
METHOD 1 ( SIMPLE, LESS ANONYMOUS )
=====================================
For this method, we send from your coinbase account straight to the seller's receiving address.
As mentioned, anonymity is improved if the seller creates a new address exclusively for your payment (see "Bitcoin addresses" above).
Login to coinbase and go to the main page (click "coinbase", top left corner).
Scroll down to the "Your Portfolio" section.
Click on "Bitcoin".
Click the "Send" button (right hand side)
Enter the seller's bitcoin address in the "recipient" box
There are 2 amount boxes you can click in
Click the left box to state the amount in your currency, such as GBP or USD etc.
or click the right box to state the amount in bitcoin.
If you find you don't have enough, then you may need to return to the "buy bitcoin" step earlier.
Click continue
A verification code will be texted to your phone, which you'll need to enter in the relevant box
Click "Confirm"
You should see a "send complete" message.
Go back to the main page (click "coinbase", top left corner).
Scroll down to "Recent activity" (bottom right)
Click on the "Sent Bitcoin" item
Click "View transaction"
This should open a webpage in a new tab, showing details of the transaction
That page provides proof that the money was sent, so you should keep a note of the URL.
==========================================================
METHOD 2 ( MORE ANONYMOUS BUT SLIGHTLY MORE COMPLEX )
==========================================================
This method is intended for more technology literate people.
Due to writing time constraints it is described in outline only.
You will therefore have to do some legwork/research in figuring out how to use wasabi wallet.
For this method, we create a new bitcoin address in your own wallet.
This new address is not explicitly linked to your id, so could potentially belong to anyone.
We then send from your coinbase account to the new bitcoin address, and then from there, onto to the seller's receiving address.
So we have sent from coinbase (which is linked to your id), to "some address" that is not explicitly linked to any particular id, to the seller's address.
The steps are :
Download and install "Wasabi wallet", then run it.
Create a wallet
Make sure you safely record the "mnemonic words" and your password. If you lose those, you risk losing your money.
Generate a receive address
Send money from coinbase to the wasabi wallet receive address, by following the "METHOD 1" steps, but using the wasabi receive address instead of the seller's address.
To improve anonymity, you could do a "CoinJoin" within wasabi wallet.
Note, however, that this requires a minimum amount of money ( currently about 0.1 bitcoin, which is around 700 USD at time of writing ). It also takes time, eg 1 or 2 hours.
As mentioned, anonymity is also improved if the seller creates a new address exclusively for your payment (see "Bitcoin addresses" above).
Send money from wasabi wallet to the seller's bitcoin address.
In the "History" tab, you should see the transaction id.
You should be able to lookup that transaction id at https://www.blockchain.com/explorer
( enter the id in the search box, and click "Search" ), providing proof that the money was sent.
I can't advise how "safe" this guide is in terms of your anonymity.
Bitcoin can be more or less anonymous depending on how it's used.
Some approaches are discussed which may improve anonymity, but no guarantees can be given.
There are various analytic methods that may link bitcoin addresses with people, so it may be wise to assume non-anonymity.
You therefore have to weigh up the risks by considering local laws, researching what happened in other cases, etc.
You can try to improve anonymity (discussed below), but should assume you might not be anonymous, and consider the possible outcomes.
There are "safer" ways to use bitcoin than those in this guide, but they tend to require more effort (sometimes prohibitively so for some people).
This guide is for people who want something simple and easy, and are willing to accept the calculated risk (discussed above).
The exact buttons / button names, etc, on websites / programs, may change over time, so you may not be able to follow this guide "to the letter", and may have to "read between the lines".
This guide is based on using "coinbase". An alternative would be to buy bitcoins on "LocalCoinSwap", which can improve anonymity, however some people might find that to be too involved. "LocalBitcoins" was previously another option, but now requires personal ID. If "LocalCoinSwap" does the same, then it may cease to be a worthwhile alternative.
============================
Create a coinbase account
============================
This account won't be anonymous.
It will be created in your name. You'll need to upload ID photos, eg :
1) front of driving licence
2) rear of driving licence
You'll also have to give a phone number which can receive text messages (for authentication codes).
There may be a time lag while your ID is verified, although it can be near instant.
============================
Buy bitcoin
============================
Before we can send bitcoin to a seller, we must first buy it.
Login to coinbase and use the "Trade" button (top right corner)
Because bitcoin has transfer fees, you should add 2% on to the amount you are buying.
The 2% figure is just a "guess" since I haven't researched the fees in detail (you may be able to get away with a smaller amount).
e.g. If the seller asks you to send 200 USD worth of bitcoin, then buy 204 USD worth,
or if the seller asks you to send 0.1 bitcoin, then buy 0.102 bitcoin
You can enter the amount in your currency, such as GBP or USD etc.
Alternatively you can click the "BTC" button on the right, and enter a bitcoin amount.
In this case, it will usually be less than 1, since 1 BTC is about 7000 USD (at time of writing - it constantly changes), so check you have a zero, then a decimal point, eg "0.1", which would be about 700 USD at time of writing.
note : *Don't* buy "Bitcoin Cash" (BCH), you want "Bitcoin" (BTC)
Once you've entered the amount, click "Preview purchase".
Check everything seems okay, then click "Buy now".
Once the payment goes through you should see a "purchase successful" page.
There may be limits on how many bitcoin you can buy per week, so in some cases you might have to buy some, wait, then buy some more.
============================
Bitcoin addresses
============================
A "bitcoin address" is essentially the same idea as a bank account number, except it consists of letters and numbers, and is much longer.
e.g. an address looks something like : bc1qar0srrr7xfkvy5l643lydnw9re59gtzzwf5mdq
You should use copy/paste where possible (typing manually will be tiresome).
"Address" will be used to mean "bitcoin address" in the rest of this document.
When buying from a seller, you'll need to ask them the address they want the payment sent to.
*IMPORTANT* Ask the seller if they can create a brand new address exclusively for the payment you are making. "Clued up" sellers often do this already, so don't be shy to ask as it shouldn't be difficult to do. This improves anonymity.
It will also help if the seller has a good awareness of privacy, and performs some type of "coin mixing", or uses "wasabi wallet" and the "CoinJoin" feature, etc, so this could be a criteria in choosing who to buy from if multiple sellers were available.
============================
Method and anonymity
============================
Method 1 is simpler, but less anonymous.
Method 2 is better (more anonymous), but slightly more complex, and people who aren't good with technology may struggle a bit.
For both methods, anonymity is improved if the seller creates a new address exclusively for your payment (as mentioned above).
If you use method 1, and the seller doesn't create a new address, then that's the least anonymous case.
The highest anonymity (in terms of this guide), would be method 2, plus a "CoinJoin", plus the seller creating a new address.
=====================================
METHOD 1 ( SIMPLE, LESS ANONYMOUS )
=====================================
For this method, we send from your coinbase account straight to the seller's receiving address.
As mentioned, anonymity is improved if the seller creates a new address exclusively for your payment (see "Bitcoin addresses" above).
Login to coinbase and go to the main page (click "coinbase", top left corner).
Scroll down to the "Your Portfolio" section.
Click on "Bitcoin".
Click the "Send" button (right hand side)
Enter the seller's bitcoin address in the "recipient" box
There are 2 amount boxes you can click in
Click the left box to state the amount in your currency, such as GBP or USD etc.
or click the right box to state the amount in bitcoin.
If you find you don't have enough, then you may need to return to the "buy bitcoin" step earlier.
Click continue
A verification code will be texted to your phone, which you'll need to enter in the relevant box
Click "Confirm"
You should see a "send complete" message.
Go back to the main page (click "coinbase", top left corner).
Scroll down to "Recent activity" (bottom right)
Click on the "Sent Bitcoin" item
Click "View transaction"
This should open a webpage in a new tab, showing details of the transaction
That page provides proof that the money was sent, so you should keep a note of the URL.
==========================================================
METHOD 2 ( MORE ANONYMOUS BUT SLIGHTLY MORE COMPLEX )
==========================================================
This method is intended for more technology literate people.
Due to writing time constraints it is described in outline only.
You will therefore have to do some legwork/research in figuring out how to use wasabi wallet.
For this method, we create a new bitcoin address in your own wallet.
This new address is not explicitly linked to your id, so could potentially belong to anyone.
We then send from your coinbase account to the new bitcoin address, and then from there, onto to the seller's receiving address.
So we have sent from coinbase (which is linked to your id), to "some address" that is not explicitly linked to any particular id, to the seller's address.
The steps are :
Download and install "Wasabi wallet", then run it.
Create a wallet
Make sure you safely record the "mnemonic words" and your password. If you lose those, you risk losing your money.
Generate a receive address
Send money from coinbase to the wasabi wallet receive address, by following the "METHOD 1" steps, but using the wasabi receive address instead of the seller's address.
To improve anonymity, you could do a "CoinJoin" within wasabi wallet.
Note, however, that this requires a minimum amount of money ( currently about 0.1 bitcoin, which is around 700 USD at time of writing ). It also takes time, eg 1 or 2 hours.
As mentioned, anonymity is also improved if the seller creates a new address exclusively for your payment (see "Bitcoin addresses" above).
Send money from wasabi wallet to the seller's bitcoin address.
In the "History" tab, you should see the transaction id.
You should be able to lookup that transaction id at https://www.blockchain.com/explorer
( enter the id in the search box, and click "Search" ), providing proof that the money was sent.