Anonymous Bitcoin Purchases Become More Difficult

Despite Bitcoin far a far cry from anonymous, there are lots of people who still prefer to remain anonymous when buying or selling Bitcoin in their area. Platforms like LocalBitcoins allow users to do so, as cash is one of the most often used payment methods when trading on this platform. But it looks like buying Bitcoin anonymously is becoming more and more difficult in certain regions, as even cash deposits require SMS verification these days.

Also read: Various Bitcoin Exchanges Faced DDoS Attacks This Past Week

LocalBitcoins Cracks Down on Anonymous Buying

Even though LocalBitcoins is not responsible for holding customer funds directly in most cases, things are slightly different when it comes to cash deposits in some countries. Australian Bitcoin buyers, for example, might need verify their identity by submitting a mobile phone number before a deposit can be made.

Other countries, such as pretty much anywhere in Europe, do not have these requirements, allowing for anonymous Bitcoin purchases by using cash. All it takes is finding someone who sells Bitcoin in exchange for cash, and you are all set. But that situation might come to a change in the future as well, as the EU is working on regulating these types of transactions.

There are different ways to circumvent this problem, such as using a prepaid disposable mobile phone number to complete the verification procedure. Alternative, users could buy Bitcoins from the site through an account registered in a different country, and then transfer the funds by using intermediary services, such as a Bitcoin mixer, or even Darknet marketplaces.

People should ask themselves the question as to why they need to buy bitcoin anonymously, as there is no real need in doing so. Granted, based on the country one is residing in, capital gains from Bitcoin might be subject to taxation,  which could be something people might want to avoid. Then again, attempting to evade taxes will catch up with a person sooner or later.

The Future of Bitcoin Purchases?

Bitcoin was never intended to be used for anonymous purposes, regardless of whether it is obtaining the digital currency or using it for illegal purposes. While some people may feel the need for anonymity, a large part of the Bitcoin community has no issues with the way Bitcoin works right now.

No one is saying anonymous purchases of Bitcoin should be impossible anytime soon, but at the same time, it only makes sense platforms like LocalBitcoins are looking at ways to prevent that from happening. Not because they are against it per se, but simply because they want to cover all bases regarding avoiding tainted funds flowing into the Bitcoin ecosystem.

Source: Reddit

Images credit 1,2,3

If you liked this article follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin and altcoin price analysis and the latest cryptocurrency news.