Scammer Warning

Scammers are incredibly prevalent in the cryptocurrency atmosphere. Unlike government currencies, there is no bank or fraud prevention. Once you click “Send,” that crypto is gone and you can’t get it back.

So please, always triple check who you’re buying from and sending to.

Another thing, depending on the market the price of the respective cryptocurrency may drop if held onto for a long duration of time. Which will decrease the amount of money in your wallet. For that reason, try spending the crypto within the same few days as you originally bought it.

What is Cryptocurrency?

Cryptocurrencies are digital currencies, there are multiple cryptos (ie. Bitcoin, Monero, Litecoin, etc) and they do not rely on any banks, governments or other authority figures to regulate them. Which is why they’re heavily utilized in underground markets. 1

However, a common misconception is that cryptocurrency is inherently private and untraceable due to the lack of imposing authority figures. This is wrong, crypto isn’t inherently private, it instead just gives you the opportunity to practice privacy.

This is because cryptocurrencies rely on something called a blockchain. A blockchain is a list of all the transactions ever recorded, they include the wheres, whens and hows a transaction was completed. Some cryptos have private blockchains and hide these details (ie. Monero) but most have public blockchains and display these details (ie. Bitcoin).

So now you may be wondering, should you avoid using Bitcoin? Not necessarily, you can still be anonymous and private with public coins despite how oxymoronic that sounds. In fact, this guide is dedicated exclusively for Bitcoin.

How to store Bitcoin (Bitcoin Wallets)

The first thing you need to do before buying Bitcoin (BTC) is downloading a Bitcoin Wallet.

  • It’s fine if you don’t understand everything below at first. You can usually just skip to Bitcoin Wallets Recommendations since these wallets are rather user-friendly.

When you make a Bitcoin wallet, you’ll receive something called a Seed Phrase. A seed phrase is a randomized 12-word list. The seed phrase’s job is to generate a Master Private Key, which can generate millions of Private Keys. 2

Each private key will create something known as a Public Address, imagine a public address as a Paypal username. You send money to people using their Paypal username, you get sent money from people using your Paypal username. So similar to Paypal usernames, your public address serves as your personal identifier to be sent Bitcoin.

Each public address has it’s own balance, so if you buy 0.5 BTC on Address A and 2 BTC on Address B. In total, you’ll have 2.5 BTC in your wallet. Wallets can also send Bitcoin from multiple addresses at the same time to a recipient address.

Your Seed Phrase is what generates all your keys, write down your Seed Phrase when you make a wallet in case you need to recover your Bitcoin.

Back to the millions of private keys, yes, you could theoretically have millions of generated public addresses under your bitcoin wallet. So you’ll virtually never run out of addresses in your wallet. Addresses will also automatically rotate in your wallet to help prevent tracking.

Bitcoin Wallets Recommendations

There are a lot of Bitcoin Wallets out there in the world. So to form a small list of recommendations, I decided to pick based on mainly 4 factors in priority order.

  1. Transparency/Open Source
  2. User-Friendliness
  3. Features
  4. Reputation/Popularity

I tested all of these wallets myself and researched each one individually. All of the wallets listed are open-source, mobile & desktop supported and allows you to create multiple wallets.

  1. BlueWallet

    1. Basically just a scan, send and receive button
    2. Very simple and user-friendly
    3. Only On-Chain BTC
    • Pick for an incredibly simple experience

  2. Electrum

    1. Offers basic features
    2. Offers advanced control
    3. Only Lighting & On-Chain
    • Pick if you’re decently experienced

  3. CakeWallet

    1. Incredibly rich in features & control
    2. Can create most coin wallets
    3. Swap, buy & sell features
    4. Can be confusing for a beginner
    5. Includes Lighting & On-Chain
    • Pick if you’re relatively advanced

How to buy Bitcoin

Now here comes the tricky part, actually buying the Bitcoin. Below, I’ve included exactly 3 Bitcoin purchasing methods.

But before we get into that, it’s absolutely necessary you learn about KYC (Know-your-Customer) policies.

KYC is a term used to describe the business practice of verifying their customer’s identity, thus the “Know your Customer” name. The most common KYC methods include providing Social Security Numbers (SSN), driver licenses, home addresses and legal names. In order to purchase Bitcoin from an official business (ie. Cashapp, Strike) they are required to verify your identity and age.

Below I tiered these purchasing methods by KYC requirements. Even if a method includes KYC, I recommend going through it.

Mobile Exchange Apps (KYC)

You can purchase Bitcoin from certain mobile digital wallets like Cashapp and Strike. However, in order to setup an account you need to verify your ID. If for some reason you can’t verify your ID, I recommend asking friends, siblings or parents to purchase for you.

Here’s a how-to on purchasing BTC from Cashapp, it should be generally the same in other apps.

If you/them don’t already have Cashapp

  1. Download Cashapp
  2. Register an account and verify

If you/them have Cashapp

  1. Buy 60-120$ in Bitcoin
  2. Pull out your mobile Bitcoin wallet
  3. Press the “Receive” button and open up the QR Code/Bitcoin Address
  4. Go to Cashapp and select the Bitcoin section
  5. Use either of these two methods to send Bitcoin from Cashapp.
  6. You’re done, you now have Bitcoin

Bitcoin ATMs (KYC Depends)

Watch the video

Click the thumbnail above to watch a Youtube tutorial on how to use a Bitcoin ATM.

Bitcoin ATMs (BTMs) are exactly what the name say they are. You can convert cash to bitcoin and vice versa. BTMs are a great way to buy bitcoin without the presence of KYC policies. Especially for individuals without access to online purchasing.

When approaching a BTM you deposit physical money in exchange for Bitcoin. This makes BTMs the most viable option for those who do not have bank accounts. Although there 2 primary drawbacks to BTMs, they tend to have large fees and require distanced travel.

For the fees, a range of 5% to 25% fee will be taken from the Bitcoin Purchase. As for the travel, BTMs are usually located in grocery stores or gas stations. Some times being miles away or in another adjacent city from yours.

So before going to a Bitcoin ATM, make sure you consider the fee deductions and the method of traveling you’ll use. I suggest doing research on calculating the amount of bitcoin you’ll be obtaining before exchanging anything.

BTM FInders

Some BTMs on the Global Bitcoin ATM Map may require KYC, please check before traveling.

P2P (Peer-to-Peer) (No-KYC)

Peer-to-Peer (P2P) describes the practice of directly trading a currency for crypto with another person. This currency can be government money (fiat) or other cryptocurrencies.

Since this is a guide for purchasing Bitcoin, we’ll be discussing fiat to Bitcoin P2P trading.

Versus buying bitcoin off an exchange or visiting an BTM, this is the only method where no company exists to impose KYC. Nevertheless this comes with a risk, you’re more likely to get scammed since there isn’t a 3rd company bounded by law to protect you as their client.

To avoid being a victim to scamming, we use P2P sites with escrow middlemans. Escrow refers to a process where a trusted third party temporarily holds funds during a transaction between two parties. If an attempt at fraud is detected, it will stop the transaction and refund your money.

P2P Sites

P2P is generally less reserved for those not familiar with Bitcoin. A tiered difficultly list was made as a result of this.

  1. Easy Trading

  2. Medium Trading

  3. Hard Trading

KYCnot.me

KYCnot.me is a directory of trustworthy alternatives for buying, exchanging, trading, and using cryptocurrencies without having to disclose your identity, thus preserving your right to privacy. It’s a great resource to have and you could find other no-KYC bitcoin exchanges here if you want.

  1. Van Wegberg R, Oerlemans JJ, Van Deventer O. Bitcoin money laundering: mixed results? An explorative study on money laundering of cybercrime proceeds using bitcoin. Journal of Financial Crime. Published online March 7, 2018:00. doi:10.1108/jfc-11-2016-0067 ↩︎

  2. Info on Seed Phrases ↩︎