[Buy/Sell/Trade BTC Anonymously] Easy to Understand Guide on Anonymizing Bitcoin

rauza

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I'm going to quickly skip over introduction, requirements, and all that and try to just get straight to the point.

I won't dive in to the technical to avoid a long guide. If you're interested in learning the nitty gritty, you can Google some of the concepts explained here but if you're somebody who just wants to know how to work with BTC with more privacy in mind, then this is the place for you. Many people like to think BTC with privacy in mind is a criminal mind-set but it's not, some people just don't want their business on a public ledger.

Bitcoin isn't all that anonymous believe it or not - all transactions are recorded on a public ledger. In order to anonymize BTC exchange, you must be weary of how it is sourced and how it traverses between wallets so you can establish basic security protocols.

So here's a quick layered step by step to the whole process of working with Bitcoin. You might start somewhere in the middle or right at the very start if you don't have any BTC.

1. Sourcing BTC
2. Mixing BTC
3. Secure Software Wallet
4. Converting to Real Money


So let's look at this quickly step by step.

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#1 - Sourcing Bitcoin

This step would be if you were to want to either buy or receive bitcoin. The key concept to understand here is to use Non-KYC exchanges (Know-Your-Customer). That means you want to use an exchange that does not have associated identification details about you. For example, if you were to register on many Bitcoin wallet platforms, you will be asked about your identification in order for them to verify you so you can use their exchange (Coinbase). This is KYC and is not something you should go for. In fact, do you remember the recent Twitter hack? Well, they made this very rookie mistake.

I wrote a quick thread about it here if you're interested: https://www.blackhatworld.com/seo/l...s-caught-in-the-dumbest-way-possible.1253398/

So basically you want to go for a Non-KYC exchange when worrying about purchasing BTC. The idea here is to go for Non-KYC P2P exchanges (Peer to Peer) for optimal security where the control of exchange of currency is mostly held responsible between two parties agreeing to perform a transaction. 2 popular examples of this are HodlHodl and Bisq where they act as light middlemen. Lots more to talk about here but I want to make this guide as short and to the point as possible for my short attention spanners out there so moving on. You can purchase them through Paypal, Payoneer, Bank transfer, Skrill or just about anything depending on whose willing to sell it to you through said mediums on these platforms.

#2 - Mixing BTC

Now let's say you purchase BTC or receive BTC through a personal or business transaction. Well where exactly is your wallet going to be? When receiving BTC, it is not a good idea to expose your receiving addresses of your original wallet that you may reuse later. Instead, you want to use an intermediary wallet before your actual main wallet.

[Buy / Receive BTC] --> [Send to Temporary Wallet & Mix] --> [Send to Actual Main Wallet]

Technically you can add more layers in between if you wanted but it's not needed. So a temporary wallet - okay. But what is this temporary wallet and where is it going to be hosted? You want to go for a wallet like if not exactly like, the Wasabi Wallet. As explained on their site "Wasabi is an open-source, non-custodial, privacy-focused Bitcoin wallet for Desktop, that implements trustless CoinJoin."

Screenshot-20191125052019-1110x539-1024x497.png


So basically it's a wallet where you can generate random receiving addresses for each transaction, get them in your temporary wasabi wallet, and then perform a coinjoin feature which basically mixes your Bitcoin. Now I don't want to go too in to the technical but the idea is that when you are receiving Bitcoin, it can be tracked through a public ledger. The idea of mixing BTC means your Bitcoin will be tumbled around through other wallets using the service over and over until it's harder to decipher the real source of your BTC. The BTC you will get back will basically be almost unrecognisable from the ones you started with. There are many tutorials on how to use Wasabi (very simple to use) online.

So you've generated a receive address from a wallet such as Wasabi (which utilises Tor), sent it to somebody to get some BTC, mixed it and now you want to send it to your main wallet.

#3 - Secure Software Wallet

Remember when we talked about KYC exchanges? Well just like we talked about not using any KYC services and going for Non-KYC exchanges, you want to go for Non-KYC wallets. The most secure and best way to go about doing this is using a software wallet. A popular and secure one is Electrum.

seed-icon.png


Again, many tutorials on how to use this. The reason for this is because you want to have the least amount of vulnerable points to your identity as possible when it comes to your BTC, so registering on any kind of platform is usually opening yourself up. Having a software wallet allows you not only full control but almost complete privacy to your coins.

If you wanted to take it a step further, you can use an operating system called Tails and have your Electrum wallet saved on its persistent memory. Tails by default uses the Tor network for all of the TCP / IP connections including connecting to data stored in the wallet.

toolbox.svg

"Tails is a portable operating system that protects against surveillance and censorship."
- Source: https://tails.boum.org/

So now you can simply send the mixed money in your Wasabi wallet over to your Electrum main wallet and now you've got some secure dough.

#4 - Converting to Real Money

Now just as we talked about in step 1, you can use Non-KYC exchanges to actually sell the BTC this time instead of buying.

But what's nice is, your money for the most part is unidentifiable, so you can actually send the money to a KYC BTC Exchange if you like such as CoinBase and sell it through there as well. If you were utterly paranoid about using KYC at all, the Non-KYC P2P exchanges are also open to sell at but for the most part, you can use it in KYC exchanges to sell. Since you've cleaned up after yourself from keeping anybody looking at your digital footprints on a transaction by transaction basis, this leniency is granted.

This should be something everybody who has BTC should know conceptually especially if you're concerned about privacy. I didn't go in to talking too much about the technical nitty gritty or even further more draconian measures simply because they're unneeded unless you're a terrible human desperate for BTC privacy because you're committing immoral acts which I hope nobody here is.

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Tl;DR Summary

If there was a tl;dr for this... I'd say:

- Don't use KYC wallet / exchanges
- Mix your BTC (i.e. Wasabi) before sending to main wallet
- Use software wallet (i.e. Electrum) for receiving mixed coins


I made this guide because I believe everybody has a right to privacy and also for the many people who claim BTC is anonymous - I want to put it out there - it's not so if you're still in that illusion, hopefully this guide will make you rethink how you use it.

If you're interested in Cryptocurrncy that actually had privacy in mind when being developed, Monero is a great example of this.
 
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Panther28

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Great guide, you obviously know your stuff if your recommending tails, lol
 

rauza

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Great guide, you obviously know your stuff if your recommending tails, lol

Tails is a god-sent for all us security nerds out there or if you're super in to privacy. Many big names have used it too such as Edward Snowden and other big activists which is cool.

I only care about privacy when it comes to BTC so when I do use it, you can bet I'm booting up Tails!
 

V

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Wow, that's a great guide. A few days ago I was only wondering how to mix BTC and remove any footprints before I cash out the money. It's not an option anymore. We should know how to cover our tracks properly. Thanks again for the guide. :)
 

TanMan

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Hi,

I have some bitcoin already but it was bought and is stored in a KYC wallet.

Is it possible to now make this anonymous? Could I send it to a mixer and then to a non KYC wallet, would that do the trick?
 

rauza

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Wow, that's a great guide. A few days ago I was only wondering how to mix BTC and remove any footprints before I cash out the money. It's not an option anymore. We should know how to cover our tracks properly. Thanks again for the guide. :)
This is really a fantastic guide.

Thank you! :)

Thanks - hope you learned some valuable points from it!

Hi,

I have some bitcoin already but it was bought and is stored in a KYC wallet.

Is it possible to now make this anonymous? Could I send it to a mixer and then to a non KYC wallet, would that do the trick?

Well because you have already bought it - its technically attached to your identity as you probably understand. Now if you were to send this to Wasabi for example or any mixing tool, it would be shown that you're actively trying to mix your money by blockchain analysis. Now this isn't a big deal but what it means is that you've given a big hint to anybody who may want to track your transactions that you're mixing coins. Now this doesn't mean they'll successfully be able to figure out it's you - this is process intensive and would be done only if somebody wants to for some reason find you out badly. Ultimately, you don't want your new Non-KYC wallet to be found out if you're going to use it as your main wallet in concerns for privacy.

So even after mixing your coins, and upon reaching a new wallet destination address, you are still identifiable but that's a low probability unless lots of resources are being put into analyze the blockchain for your addresses for whatever reason. At least when you source bitcoins from a Non-KYC P2P, you're already starting an anonymous point as it directly hits Wasabi, tumbles and then sent to your hardware wallet.

Basically, mixing isn't foolproof but it makes it damn hard to track which is why making sure how you source the BTC is important. Technically yes, you can just send it through a mixer and you'll probably be fine for the most part but I wouldn't say you'd be airtight.

In your situation, I would just sell the current BTC and then buy back using a Non-KYC exchange to have it sourced properly if you're super concerned about it - hope that helped!
 

JessonM

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Just use monero it is anonymous. You don't need any mixer at all.
 

rauza

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Just use monero it is anonymous. You don't need any mixer at all.

Yup. I love Monero and recommend it to everybody. The issue is that Bitcoin has become more standardised in the crypto world and shows promise of growing so majority of crypto wallets are Bitcoin. Because of this market, aside from exchanging of BTC, many business transactions which are crypto related at all are usually in BTC.

Any business I've done usually gives out multiple crypto currencies as payment methods but majority of people select BTC because that's what they have or are more familiar with. I think Monero will grow and have it's time in the future though. It's kind of like Paypal vs Stripe - while Stripe is very convenient and great, because Paypal has become such a standard online wallet, many people pick that as a payment method over Stripe.

I think Monero will get its time as people get more educated about cryptocurrency.
 
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Electrum is not a hardware wallet. It is a software program. A hardware wallet would be a physical device like Trezor or Coldcard. Wasabi already has hardware wallet support so you can just connect the wallet and use Wasabi as the interface. You can't mix coins from the hardware wallet so you will have to create a seperate mixing wallet inside Wasabi.
 

rauza

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Electrum is not a hardware wallet. It is a software program. A hardware wallet would be a physical device like Trezor or Coldcard. Wasabi already has hardware wallet support so you can just connect the wallet and use Wasabi as the interface. You can't mix coins from the hardware wallet so you will have to create a seperate mixing wallet inside Wasabi.
Oo yeah realised I kept interchanging the terms, good catch! It's because Trezor is a hardware wallet that can be carried around & I have my Electrum wallet installed on a Raspberry Pi that has Tails installed with persistence so I'd always just call my mini raspberry a BTC hardware wallet which is probably why I termed it as such. I guess something less confusing would be a cold vs hot wallet as cold implies cold storage. Or an offline hardware wallet lmao.

But yes, Electrum is a software wallet and can be installed anywhere - although I'd recommend installing it on an OS like Tails or even in a VirtualBox.

On another note, I personally like Electrum better & think it's better for casual tech users because of the very fact that it's more accessible than Wasabi's wallet so I always recommend it. But yeah, using Wasabi's support for interfacing with hardware is always an option if you wanted to go for a "true" hw wallet.

**Main post re-edited to change some the of the "hardware" terms to "software"
 
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TanMan

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@rauza Thank you for taking the time to explain. It isn’t a lot of bitcoin that I have, so no real concern.

I will consider buying some by the methods mentioned, if bitcoin drops in value. I feel that in the long term bitcoin will keep going up as the world becomes more and more digital. Worth having some anonymous coin.
 

HustleTong

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Thanks for putting this together. Loved how you depicted all fundamentals. Great write-up, buddy!
 
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Slowly, but surely I'm learning every day how to take the most out of cryptocurrencies.

Thank you for offering your words of wisdom @rauza
 

dphilch

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Thanks a lot for this guide. I have been interested in managin my transactions through bitcoins but was a bit worried about not being as private as one thinks. This guide is straight to the point, will definately help a lot of people like myself.
 

kendzalo

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This is a great tutorial for newbies and pros alike! Thank you very much.
 

TheBragi

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Great read, I enjoyed it. Actionable and it shows your experience in the crypto-space. Thanks @rauza
 
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