When you are looking to buy or sell Bitcoin, exchanges are usually the go-to platform to make these transactions. But did you know that there are other ways of buying BTC without an exchange?
Investors and traders who are concerned with privacy, especially those who don’t want to go through the KYC (know your customer) process, which involves providing your personal information and ID to these platforms, prefer to interact outside of these exchanges.
Reasons behind wanting to avoid KYC regulations could range from not wanting to give their personal financial information to government agencies to security protocol measures so that their private data isn’t a target for hackers.
In this post, we will go over the various ways that you can buy Bitcoin without an exchange.
We will share options that prioritize anonymity and give you full control of your crypto. No matter what your reasons are for not using an exchange, there are multiple ways of buying Bitcoin without using centralized exchanges.
6 Ways to Buy Bitcoin Without an Exchange
1. Material Bitcoin
Arguably the easiest way to buy Bitcoin, Material Bitcoin is a cold hardware wallet that gives you a straightforward and anonymous way to easily buy BTC. First off, from the moment you purchase your Material Bitcoin wallet, you can choose to pay in cash upon delivery; this method eliminates adding your credit or debit card info to the Materia Bitcoin online store and is one further step taken by the company to provide you with privacy.
Material Bitcoin doesn’t link Bitcoin addresses with customers, nor does the company have an obligation to report to any organization who has purchased their wallets or declare how many Bitcoins are registered to a wallet.
Your crypto is private and in your control.
Apart from keeping your digital assets private, Material Bitcoin also provides an easy way to buy Bitcoin safely without an exchange. You simply scan the QR Code on your Material Bitcoin steel card or manually type in the wallet’s address. You then indicate how much you want to buy (in fiat currency) worth of Bitcoin and then click on Buy BTC.
2. Bitcoin ATMs
This is a popular choice for accessing Bitcoin without using an exchange. Typically Bitcoin ATMs are found in convenience stores or shopping malls and allow you to buy BTC with cash or a debit card.
Depending on the ATM, you might need to provide ID but generally speaking, they require less personal details than an online crypto exchange.
CoinFlip is a Bitcoin ATM that has thousands of machines across the United States and Canada. The steps to buy BTC are easy to follow:
- Pick the cryptocurrency that you want to purchase and click BUY.
- Accept the terms of service and specify the amount you want to purchase.
- Enter your phone number and the one-time passcode sent to you.
- Click “receive” in your crypto wallet to generate your wallet QR code.
- Scan your wallet QR code on the ATM sensor.
- Insert cash to pay for your crypto.
Bitcoin Depot is another popular option with over 13,000 ATMs located in the US and Canada.
If no KYC regulations are important to you, using a Bitcoin ATM might be a useful solution as some of them don’t require KYC at all for smaller purchase amounts.
One of the downfalls of using these Bitcoin ATMs is that it needs to be done in public and there can be potential security issues with the platform. Having a secure cold wallet to transfer your Bitcoin to when making the purchase is your best bet for keeping it safe.
3. Peer-to-Peer (P2P) Platforms
P2P platforms function by connecting buyers and sellers directly, allowing you to make transactions of crypto directly without third-party interference. Some of the most popular P2P platforms include Paxful and Bisq. Both of these peer-to-peer exchanges provide a “marketplace” for you to create offers to either buy or sell BTC.
Prices and payment methods need to be specified in your listing if you are looking to sell. Both of these P2P platforms implement escrow services for secure transactions.
🚧Proceed with Caution: Many of these P2P exchanges do their due diligence to vet sellers but you always need to err on the side of caution, remembering that if something sounds too good to be true, then it probably is!
4. Mining Crypto
Now, this method of gaining Bitcoin might not be for everyone, but can be done by regular people like you and me. However, before you can begin you need to invest in a Graphics Processing Unit, also called a video card, or a more expensive Application-Specific Integrated Circuit (ASIC) that runs mining programs continuously.
There is a whole system put into play that requires you to solve algorithms, which is part of the Bitcoin proof of work process, that usually adds a new Bitcoin to the blockchain every 10 minutes.
Needless to say, these GPU and ASIC machines and programs cost a lot of money, as well as the electricity needed to run them. This means that mining Bitcoin on a personal level at home can be expensive, roughly costing about $10,000 just to get started. However, once you get past the initial upfront cost, this is the only way to get Bitcoin directly from the source.
5. Exclusively Bitcoin “Exchanges”
Some services, like Swan Bitcoin or River, are Bitcoin accumulation platforms that allow you to buy BTC directly without going through a traditional exchange.
Both of these platforms are exclusive to Bitcoin and give you the chance to set up recurring purchase plans. The idea here is that you are consistently buying and accumulating Bitcoin.
The main advantage of using these services to buy Bitcoin is the concept of dollar-cost averaging, which is an investing strategy that uses a fixed amount of fiat money to regularly buy Bitcoin in intervals. The concept is to bring down the cost of an individual share as you slowly build up your Bitcoin portfolio consistently.
6. Face-to-Face Transactions
One of the unsafest ways of buying Bitcoin is face-to-face transactions, which involve meeting someone in person to buy Bitcoin.
Sure, it’s a great way to keep transactions off of online platforms, but there are many risks with meeting strangers to complete transactions, especially when an exchange of money or goods is involved.
It is not recommended unless both the buyer and seller are known and trusted.
Case Study: Richard Weston
Weston has been selling Bitcoins (or portions of them) since the mid-2000s in face-to-face transactions. Although he has never been physically assaulted, he has been scammed himself as a seller!
Store Your Bitcoins Without an Exchange
If you are buying your Bitcoin off of an exchange for privacy and security reasons, then storing your BTC should be no different.
To securely store Bitcoin, using a cold hard wallet is vital.
Material Bitcoin is one of the best hardware wallets available, made of stainless steel, and has no electronic components. This means that your private keys are stored securely and you can even purchase a separate seed phrase storage wallet.
The metal card is damage-resistant to fire and water and you’ll never need to worry about hacking as it’s completely offline.
FAQs
Can you buy crypto without using an exchange?
- Yes, there are methods like using Bitcoin ATMs, P2P platforms, direct purchases like Swan Bitcoin, mining, face-to-face transactions, and the most efficient, buying it directly from your Material Bitcoin cold wallet.
How do I hold Bitcoins without an exchange?
- You need to use a crypto wallet: hardware, paper, or software. Material Bitcoin is a cold hardware wallet that offers secure storage options.
Can you buy Bitcoin directly?
- Yes, you can buy Bitcoin directly from individual investors and traders, P2P platforms, and Bitcoin-only accumulation services.
Can I sell Bitcoin without an exchange?
- Yes, you can sell via P2P platforms, Bitcoin ATMs, and face-to-face transactions (although not recommended for safety concerns).
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