There are many ways to buy Bitcoins, a situation complicated by the fact that these vary depending on which country you are in, so it is probably best to search online for options available in your area. Check out How to Buy Bitcoins for an excellent list of resources for almost every country.
We decided on LocalBitcoins.com, which is an international (which suits our purposes for this guide) online marketplace for in-person Bitcoin trading. For maximum anonymity you can search for someone who lives nearby and arrange a face-to-face meeting with them to buy the Bitcoins with cash, or you can buy online and pay with a bank transfer or other agreed method.
We opted for the second option as it is easy, still affords a fairly high degree of anonymity as we are dealing with an individual private seller (and we plan to wash the coins afterwards anyway), and there was no one nearby willing to meet up for the small amount of coins we wanted to buy anyway!
1. You can search to find a seller who matches your criteria.
2. You can check out a seller’s history and feedback in much the same way as with eBay.
3. Once you have decided on a trader, you need to sign up for the website. This is free, although LocalBitcoins.com charges a 1% fee for purchases, and 0.0005 BTC (aprox. $0.07 at time of writing) per outgoing transfer from the wallet.
4. Click on ‘Buy’ next to your chosen seller on the main trading page, then enter how many Bitcoins you want to buy. We only want to buy enough to pay for a VPN service, so 0.1 BTC (aprox. $14) should be plenty.
5. The requested coins are held in escrow (i.e. temporarily by LocalBitcoins.com) until the seller receives payment. We opted to pay by bank transfer, which while not totally anonymous as the seller will see our bank number, is good enough for us since we plan to transfer the funds to another wallet, and then ‘wash’ them before using.
6. You will be notified by email once the transaction has been finalized and the funds released from escrow into a wallet created when you signed up for LocalBitcoins.com, and you will be asked to leave feedback for the seller. It took about five minutes from payment to our funds being released.
7. You can pay for services directly from the LocalBitcoins.com wallet (or send the coins to a mixer), but we’ll add another layer of distance between ourselves and the coin purchase by transferring them to the wallet we created in Part 2 of this guide.
Buying coins in this way was quick and reasonably anonymous (and if you wish to be even more anonymous you can arrange for a face-to-face meet up instead). The feedback system, together with the fact that money is held in escrow until the deal is completed, help ensure that problems are unlikely to occur (and an arbitration system is in place if they do). All in all we found buying Bitcoins on LocalBitcoins.com to be a quick and painless process.
In Part 4 of this guide we’ll look at further anonymising our Bitcoins with a mixer service.
Check out the rest of this Guide:
Part 1: An introduction
Part 4: Mixing your Bitcoins
Part 5: Paying for VPN with Bitcoins