How Anonymous is Bitcoin?
Anyone can create a Bitcoin address without giving any personal information. The address is completely random. This is what makes Bitcoin anonymous. Secondly, transactions do not require personal information. If you own the public key and private key, you can send and receive Bitcoin without the need to disclose your personal information. The way transaction data is transmitted through the network makes it even more anonymous. When transaction data is transmitted through a node, it is sent to a random set of nodes. The nodes that received the data cannot tell if the transaction was originated from the sender node or just passed through the network
What Makes Bitcoin Not Anonymous?
Bitcoin is not completely anonymous as most would think. It is pseudo-anonymous. Bitcoin transactions can be linked to real identities. If you signup to an exchange or wallet, chances are you have entered your real information when signing up. Bitcoin addresses on your wallet or exchange are tied to your real identity. If someone links your bitcoin address to your real identity, all your transactions can be tracked.
How To Cash-out Bitcoin Anonymously
Step 1: Create a new Wallet Using TOR Browser.
You can use Blockchain wallet or any other online wallet to create a wallet. Using TOR browser will hide your real IP. When signing up, don’t put your real name or email address. Use fake ones. For this, you need to create a new email address with fake details using TOR.
Step 2: Use a Bitcoin mixer
After you create a Blockchain wallet, you need to use a Bitcoin mixer service. You can use SmartMix for this. You can really use any mixer service you want but be aware of the fees. A bitcoin mixer or tumbler mixes your identifiable bitcoins with others to obscure the trail of the original owner. Some mixers have random transaction fees to obscure it even more.
Put Blockchain wallet’s deposit address on SmartMix. Send Bitcoin from your old wallet to the Bitcoin address they give. SmartMix will mix your coins and send untraceable Bitcoins to your Blockchain wallet.
Step 3: Buy a Virtual Visa Card
Using TOR browser, go to Egifter and search for “Visa”. You do not need to signup to use Egifter. Select Bitcoin as payment on the checkout page. Put your new fake email created using TOR to receive the virtual Visa card via email. Pay with your Blockchain wallet and wait for your visa card to arrive at your email address.
Step 4: Spend your card
You can spend this card online or in-store. Just avoid signing up for services that require your real identity when using this card.
Using a Bitcoin ATM is not anonymous.
Bitcoin ATMs require you to verify your identity. They need some form of verification. Either your mobile number, ID or using their app. These can be tracked. Never use an ATM if you want to cash out anonymously. Just use TOR, online wallet, and Visa card in combination as described above!