As a peer-to-peer cryptocurrency, Bitcoin is a symbol of financial inclusion. Satoshi Nakamoto has explicitly designed the cryptocurrency so that it can be used without an intermediary. To get started, all you need is a wallet software, which you need to install on your smartphone or computer. Really.
Because if you don’t get Bitcoin as a free airdrop, you have to take a small but important intermediate step: buy Bitcoin. And here it used to be the peer-to-peer method, because without an intermediary there are no currencies. This is not a problem at first; Most of the exchanges these days are serious (if you are looking for tips on choosing the Bitcoin exchange, you will find them in our guide). However, when buying BTC through usual brokers like Bitpanda Y bison quite extensive KYC processes. KYC stands for Know Your Customer and describes the due diligence process that the legislator imposes on financial institutions to hinder crimes such as money laundering, terrorist financing or tax evasion. There is nothing wrong with that at first. However, in concrete terms, KYC means that customers have to leave a wide range of confidential information with the company: identity documents, insurance numbers, bank details and personal addresses are part of the standard repertoire.
And that can backfire. Data leaks like that from Binance in August 2019 or the Ledger leak about a year later they are just the spearhead of a history of data theft in the crypto ecosystem. Information that allows conclusions to be drawn about financial data is particularly worth protecting.
But even if nothing goes wrong, Binance has Octopus and Co. Access to confidential information that not everyone would like to see in the hands of the company: for example, exchanges can see which address the purchased coins are sent to and how high the Hodl stack is. So there are good reasons to think about buying Bitcoin that leaves as little data behind as possible. And there are ways to do it.
Receive payments in Bitcoin
Probably the most obvious way to get Bitcoin without having to use an exchange is to receive your salary in Bitcoin. Because, just like fiat money, you can also earn Bitcoin. For many, the incentive to receive a payment with deflationary money is likely to be greater than having inflationary money in the paycheck.
However, there are some fiscal difficulties to be aware of. Because if you only earn Bitcoin, for better or for worse, you will have to change one or the other Satoshi to euros and company. To pay the rent, for example. However, the proceeds of the sale should be subject to income tax.
Mine to yourself
Intact Bitcoins are only available fresh from the mine. Each block (currently) 6.25 BTC enters the network, that is, approximately every ten minutes. Contrary to what is often assumed, you don’t have to dig too deep into your wallet for this: if you join a mining pool, the BTC is paid proportionally, measured by the hashrate you contribute.
In theory, a single miner used is sufficient for this. Untouched and non-KYC coins are paid for in Germany at a hefty surcharge. Because electricity prices in this country do not usually allow a profitable operation of ASICs.
Bisq, the decentralized exchange
The gold standard for Otto-Normal-Bitcoiner is likely to be decentralized exchanges like Bisq to be. Bisq is more of a network than an exchange. Since the software does not have a centralized middleman, it can be called a decentralized exchange, or DEX for short.
In Bisq there are several ways to get in touch with other peers and thus reach agreements with other network participants completely independent of the centralized algorithms of the order book. Anyone who chooses to exchange for cash by mail, for example, can be assured of anonymity. Trading Bitcoin on Bisq is not completely risk-free. Despite the mandatory security deposit, it is conceivable that the other party would get away with the money and not release the BTC.
However, as a general rule, business in Bisq is going well, and just in case there are arbitrators with “arbitrators” who moderate the disagreements.
HodlHodl and Localbitcoins
Exchanges work similar to HodlHodl or Localbitcoins.com. It is true that these cannot be called DEX in the strict sense of the word, since they do not process the operations automatically. But like Bisq, merchants also establish a peer-to-peer relationship with their counterpart. Localbitcoins, in particular, has made a name for itself in countries with little financial inclusion, as Bitcoin can also be purchased there for cash. So even people who don’t have a bank account can invest in Bitcoin. Therefore, it is not surprising that around 10 percent of the traffic on Localbitcoins is in Venezuela.
Nigeria is also in high demand – with a trade volume of $ 182 million, Nigeria accounts for the second largest share of trade volume at the time of this writing.
If Bitcoin is really going to be turned into money, everyone must have access. This is ensured by decentralized solutions like Bisq or Localbitcoins. But even in this country there may be legitimate reasons to turn your back on conventional exchanges, for example for data protection reasons.