Despite its reputation, Bitcoin is not completely anonymous. But the Good News is Cryptocurrency can be purchased and spent anonymously with a few smart steps
Because every transaction uses bitcoins from a prior transaction, and the blockchain is public data, every Bitcoin payment has a traceable history that can be viewed by anyone.
While addresses are 100% traceable, they can't easily be linked to a person or entity. That's why Bitcoin is often called pseudonymous. However, a person's identity can be associated with a Bitcoin address through other means. Once the association has been made, someone with enough determination, time, and resources can analyze the blockchain and determine how many bitcoins an individual has, how they receive them, and how they spend them. One slip and a mountain of transactions can be unearthed
To use Bitcoin anonymously, precautions need to be taken to prevent your identity from being associated with any transactions and any addresses.
The following will guide you on how to store, purchase, and spend cryptocurrency anonymously.
SET UP THE WALLET
Before you buy bitcoin, you'll need to have somewhere to send it to and store it. A bitcoin wallet acts as a means of storing your bitcoin by providing a secure place to keep your private keys.
We recommend Electrum Wallet https://electrum.org for software storage. It is free to download and use on desktop and mobile. The wallet runs at the device level and its code is fully open source-those wallets running at the device level are considered more secure, less vulnerable to hackers, and (this one) is 100% anonymous.
If you are looking for a hardware wallet, then the Ledger Nano offered by Trezor might be a better option. They offer 'cold storage' on a separate device (Like a USB key), which means only you have access to your private keys. Cost $59 from BestBuy or other stores, use cash for another layer of anonymity.
https://shop.ledger.com/products/ledger-nano-s
BUY BITCOIN
We recommend Bitcoin ATMs as the best way to buy Bitcoins anonymously with cash, a quick google search in your current vicinity should help – Casper have about a dozen ATMs at time of writing. When asked to enter your Bitcoin address at the ATM just specify that you don't have one – this will just generate a new paper wallet for you and you're good to go. Later, you can import the private key from that paper wallet and send those Bitcoins to your wallet. Bitcoin ATMs don't require identification, but they are limited in the amount of Bitcoins you can buy. Most ATMs charge a fee (usually between 7%-10%).
Or you can purchase a prepaid credit card you can get at any supermarket or convenience store. You can then use this card to buy Bitcoins without the need to supply any form of identification through sellers such as https://localbitcoins.com or https://paxful.com.
HAVE BITCOIN, NOW WHAT CAN I BUY?
Service and digital products mostly. Any physical product will require an address for delivery but always look for cryptocurrency options on purchases you wish to be anonymous, below are just a few ideas but the list is endless.
Encrypted email - https://protonmail.com and https://tutanota.com have great paid account options you can purchase with cryptocurrency.
VPNs – Virtual Private Network Services can be purchased with Bitcoin such as https://protonvpn.com
Domain Purchase – Purchase a domain from https://njal.la 100% anonymously