Financial privacy is becoming more difficult to maintain than ever as we become increasingly dependent on online platforms for our everyday needs. However, there are ways to enhance your financial privacy when you want to make payments without disclosing your identity.
In this article, we will show you how to send money anonymously using a variety of methods. We have primarily focused on cryptocurrencies, although we also provide a method for making traditional payments anonymously.
How to send money anonymously?
Below, we’re featuring four methods you can use to send money anonymously or make payments online without disclosing your identity. The level of privacy you can achieve varies between different payment methods, with privacy coins such as Monero offering arguably the strongest level of privacy.
In addition, it’s important to understand that protecting your identity when making payments encompasses more than just the payment method you use. You also need to follow other best practices for preserving your privacy online.
Use a privacy coin
Privacy coins are cryptocurrencies that are specifically designed for anonymous transactions. These cryptocurrencies offer very strong privacy, and are much better suited for anonymous transactions than “traditional” cryptocurrencies such as Bitcoin and Ethereum.
The leading privacy coins at the moment are Monero and Zcash, with Monero being considerably more popular. Both of these cryptocurrencies make it extremely difficult for any outside observer to determine the sender, receiver and amount involved in any given transaction.
It’s important to keep in mind that the vast majority of cryptocurrency exchanges require you to verify your identity before they allow you to buy cryptocurrency. So, if you buy a privacy coin on a cryptocurrency exchange, it’s important to understand the privacy implications of the exchange knowing your identity and which cryptocurrencies you are buying.
For maximum anonymity, you would want to buy privacy coins using a method that doesn’t require you to verify your identity. This can be done through a P2P (peer-to-peer) marketplace. As of the time of writing this article, we were only able to find two P2P marketplaces that support Monero – Bisq and LocalMonero. Meanwhile, we weren’t able to find any good options for those who want to buy Zcash on a P2P marketplace.
Of course, one of the main issues with using privacy coins such as Monero and Zcash is that they are not commonly accepted by merchants, so it can be difficult to find places where you can actually spend them.
Another issue is that some cryptocurrency exchanges have started delisting privacy coins due to pressure from regulators, so obtaining them can be difficult, depending on the cryptocurrency exchanges that are available in the country where you live.
However, if you’re simply looking to send funds to another person and want to do it as anonymously as possible, it’s hard to beat privacy coins.
Use Bitcoin in conjunction with a wallet that supports CoinJoin
Although the Bitcoin blockchain doesn’t concern itself with the concept of identity, it’s very important to understand that Bitcoin does not offer privacy.
The Bitcoin blockchain is fully transparent. Anyone with an internet connection can see every single transaction that was ever made on the network. This includes the transaction’s sending and receiving addresses, the amount of BTC that was sent, the time at which the transaction occurred and countless other details.
So, if someone (for example, the exchange you used to purchase your Bitcoin) can tie your real-world identity to your Bitcoin addresses, you’ve effectively lost all of the “privacy” provided by the fact that the Bitcoin blockchain doesn’t concern itself with the real-world identity of its users.
However, there are ways to improve your privacy when using Bitcoin. Currently, the most popular way to anonymize Bitcoin transactions is a protocol called CoinJoin.
With CoinJoin, coins from different users are mixed together in one transaction. After this process, everyone still has the same amount of BTC (minus fees), but on different addresses. This makes it difficult for any external observer of the blockchain to determine who the original owner of the BTC coins is.
To use CoinJoin, it’s best to use a Bitcoin wallet that natively supports it. Currently, the most popular CoinJoin-enabled wallets are Samourai and Wasabi.
Another way to enhance your privacy when using Bitcoin is to acquire Bitcoin anonymously. We provide an article explaining how to buy Bitcoin anonymously.
Use a prepaid card
If you are applying for a credit card, you will have to verify your identity with the card’s issuer. If you want anonymous payments, the better choice is prepaid cards which can be used without the need to verify your identity. This includes cards such as Paysafecard, which can be bought at places like kiosks and petrol stations.
The card can be used to make payments at online shops – however, you should keep in mind that the merchant will need your personal information if there are items to be delivered physically, which would of course negate the privacy afforded by using prepaid cards.
Prepaid cards can’t be used to send money directly to other people, as they are meant for payments in online stores and platforms such as streaming services.
Use a Bitcoin ATM that doesn’t require an ID
Depending on where you live, Bitcoin ATMs in your area might not require users to provide their ID if the transaction is smaller than a specified amount. It’s possible to buy BTC with cash at the Bitcoin ATM and input the receiver’s address instead of your own. If the Bitcoin ATM in question doesn’t require an ID, it can therefore be used to send money without your identity being recorded.
However, you should keep in mind that using a Bitcoin ATM is one of the least efficient ways to purchase and send cryptocurrency, as the fees charged are usually very high. In addition, it’s important to understand that as cryptocurrency regulations become more stringent, it will likely become increasingly difficult to find Bitcoin ATMs that can be used without verifying your identity.
The bottom line
It’s possible to send money online with a fairly strong degree of privacy, although achieving perfect anonymity is very difficult online. Hopefully, our explanation of how to send money anonymously has been helpful if you are looking to remain anonymous while making payments.
Cryptocurrencies can offer better privacy than traditional payment methods, although it’s important to understand that most cryptocurrencies have transparent ledgers where all transactions are publicly recorded. If you are interested in saving money when transacting with cryptocurrencies, make sure to take a look at our article highlighting the cheapest cryptos to transfer.
