Nowadays, the need for privacy is being felt more than at any other time in human history. With Big Tech rapidly expanding to engulf pretty much every aspect of human life, the concern for maintaining your private life is without a doubt a valid point to have. We are all on social media; we are all the subject of targeted ads; we are all subject to the algorithm of different social media outlets that use the information to target us with related content; The internet of things (IoT) is becoming more and more part of our houses every day; and perhaps the most important of it all: the big tech and governments without a doubt trace our payment history and preferences too. While many people may argue that these monitors are non-malicious (at least for the time being), It is equally important to understand that a person’s privacy needs to be respected. To that end, there has been an influx of tech-related innovations that enable users to maintain anonymity. Today we’re going to cover those innovations that enable us to make financial transactions anonymously and discuss the best anonymous payment method for you. Before getting to that, however, let’s start with definitions and “why and hows.”
Root Causes: Why Do You Need Anonymous Payment?
Starting with basic principles, Cash has always been the dominant payment method in the world up until very recently. With Cash, the anonymity of the paying parties was all but guaranteed, at least as far as the payment itself went. However, as we have moved on to an online and rather cashless world, the principles of purchase have remained more or less the same, with the notable exception of the fact that almost all payment information, including the payer’s email, purchase type, identity, and even address can and potentially are stored by the respective payment service provider. The importance of this fact is further highlighted when we consider that according to the European Central Bank, the total amount of online payments had a notable increase of 18% in 2021 compared to the year before.
This means that while the payment, in essence, has remained the same, now you also pay a fee to the service provider, but in exchange, you now have lost your previously precious privacy. It’s not hard to see that this is a losing situation on the side of normal people who are basically paying more to have less privacy. Apart from this, any large purchase or financial transaction that you have will definitely invoke the presence of related tax authorities that you have to convince, even if you have done no wrong in the first place. So even for the sake of peace of mind, it’s not hard to see why we all need to have a private payment method for ourselves.
Apples and Oranges: Types of Online Financial Anonymity
Now that we know why we need privacy in payment, let’s go over the different types of anonymity that we are afforded in this cashless and increasingly non-private online financial world. In general, there are two types of online financial anonymity. These are partial anonymity and full anonymity. Let’s quickly go over these two types.
As the name implies, partial anonymity in online payment is not absolute, and there will be bits and pieces left behind as clues that an organization or a government can use in order to trace the payment back to you. However, partial anonymity also makes it significantly harder for them to do so, and it is rather easy to go partially anonymous for your financial transactions as well. In other words, partial anonymity is achieved by performing a set of cautionary actions within the established financial system to make tracing you harder. It’s important to know that regardless of partial or full anonymity, achieving either is next to impossible in the conventional payment system.
This means that any transaction that has to do with banks or fiat money, in general, cannot be anonymous as the respective bank will have all of your information and the information concerning the payment in one place. Partial anonymity is still useful. There are a lot of purchases or payment cases in which you can circumvent the banks and the fiat system. So partial anonymity will have its uses, and since it’s easy to get, it is also worthwhile.
Once again, as the name implies, with methods of full anonymity, you will not leave behind any trace of yourself or your transaction or payment. However, this level of anonymity is also considerably more difficult to attain. While Cash remains the pre-eminent and most secure private payment method for full anonymity, the world is rapidly moving away from it, and therefore many transactions cannot be performed with it anymore. As opposed to partial anonymity, achieving full anonymity concerning financial transactions requires you to fully step out of the “traditional” banking and fiat system.
You will need to resort to cash payment where feasible, cryptocurrencies, privacy coins, and other methods to maintain your anonymity. The good news is that more and more online businesses are moving towards adopting an anonymous payment method every day. This means that while big tech is rapidly moving towards limiting privacy, many other technological means that are designed to save our privacy are also advancing and are adopted daily in different businesses. Even certain sections of the big tech itself are moving in this direction. A good example is, of course, Tesla, which allows its customers to purchase cars with cryptocurrency.
Best Anonymous Payment Method: Which to go for?
Whether you are a die-hard “off the grid” type of character who will not settle for anything less than complete and absolutely full anonymity, or if you are satisfied with partial anonymity, it’s best to diversify your means of achieving said anonymity. There is no single “most anonymous payment method.” So it’s best to use these methods in their respective use cases and even mix them up from time to time to make sure that your privacy and anonymity are respected. Here are five of the best anonymous payment method candidates in 2022.
First, we have cryptocurrency. Despite what is propagated in the media a lot, cryptos are not by themselves anonymous or private. Perhaps you’d be surprised to know that in many aspects, cryptocurrencies are the polar opposite of concepts such as “private” or “anonymous.” This mostly has to do with the underlying blockchain technology that powers all cryptocurrencies. In most blockchains, the date, amount, and wallet IDs of the sender and the receiver are public to be viewed by everyone. Despite the fact that these IDs do not entail your identity, the amount and the date can be used to match with other data and find the potential sender and receiver. On top of that, a lot of cryptocurrency wallets and exchanges are legally required to ask their clients for ID in many countries, which has made cryptocurrencies less viable as a private option. What can be said in favor of cryptocurrencies is that they are inherently partially anonymous (pseudonymous). So you get that part but with them right off the bat. But what if you could go fully anonymous with them? Well, here’s a quick guide to how to anonymize Bitcoin. Interested in paying with cryptocurrencies? Check out my other article on the Best Crypto for Payment in 2022!
Anonymize Bitcoin (The Bitcoin Mixer Method)
As we said, all transactional data on the Bitcoin blockchain is public. This means that a lot of other cryptocurrencies that are forks of Bitcoin or otherwise use their blockchain system also share this quality; Litecoin is an example of this. Even cryptocurrencies that have their own custom blockchains also tend to be public. So how does a “mixer” come into play? A mixer or a tumbler is a payment method that aims to hide transactional data of the users but does so cleverly in plain sight.
A mixer, such as Wasabi, works to provide financial privacy for its users by creating a payment hub that will then mix different transactions. Different users will contribute the amount that they want to transact to this mixer alongside other users who want to do the same. Once a certain amount of users or capital has been centralized in this mixer, then the hub will distribute the transactions to their original recipients. This secondary element in the transaction, coupled with waiting time and sudden distribution, makes tracking a Bitcoin transaction much much harder.
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Let’s say you’re adamant about using cryptocurrencies in order to maintain your financial anonymity. However, using mixers is not exactly what you’re looking for. Maybe you do not trust these mixers, or you simply don’t like involving secondary elements in your transactions. After all, let’s not forget that last year caused controversy in the US when a senior financial official labeled using them as criminal activity. While not illegal yet in any jurisdiction, maybe you prefer to stay away from them. If all of this makes you want to stay away from mixers but not from cryptos, then privacy coins are your best bet! It may be confusing why cryptocurrency and privacy coins are put into two different categories since the latter is technically a subcategory of the latter. However, since it is a matter of anonymity we are discussing, I believe this division is justified. But how does a Privacy coin work as a private payment method?
There is no set method of anonymizing a transaction used by all privacy coins, and they each use a number of different ways to make their hosted transactions as anonymous as possible. Notable examples of privacy coins are DASH, Zcash, and the most famous of all, Monero. Monero is known as the only cryptocurrency to implement base-level anonymity for all its users. This means that your balance and your transactions are all hidden beneath several different concealing methodologies, such as RingCT, Signatures, and Stealth Address. Some privacy coins also use a method similar to mixers at the base level to break down each transaction into many smaller ones. As far as cryptocurrencies go, using private coins is the most anonymous payment method out there.
Prepaid Cards (Anonymous, Crypto, Debit, and Gift Variants)
Another method of avoiding a financial point of entry is using prepaid cards. What is a financial point of entry? For almost all cryptocurrencies and other payment methods, there is a conversion point in which you have to use a fiat platform in order to turn your first money into cryptocurrency. This is also the same for conventional debit cards and credits. This point of entry is the last interaction you have with the conventional monetary system before your money goes off the Grid. So this is where a lot of investigation and tax officials begin to look for the money. One of the most efficient ways of going around this point of entry entirely, is by getting prepaid cards that are already paid for and simply need to be redeemed to grant you their value. You can use gift cards for services like Steam, Spotify, Amazon, etc. For others, you can use cryptocurrency and debit cards. And there are even “anonymous prepaid cards” that you can get at any store without the need for ID and can use with a fake name in order to completely remain anonymous.
Cash App works much the same as partially anonymous methods, meaning that while you can stay off Grid in the eyes of the general public with it, you still need to provide it with a bank account to withdraw from and deposit to.
But if the surface-level partial anonymity is what you’re looking for, then Cash App makes everything incredibly easy. All the information you need is the other person’s Cash Tag to send them money and vice versa. Remember to never use your name or any other personal data that can be used to identify you in your Cash App for obvious reasons!
Spice it Up: Additional Tips to Pay Anonymously
Now that you are armed with four different payment methods that each provide you with a different level of anonymity let’s take a quick look at the services that work best in maintaining your financial anonymity but are not necessarily part of the payment method itself. As I already mentioned, remaining anonymous financially is not a single trick pony that you can get overnight. It requires using different methods and complementary action in order to come to fruition. Here are the three additional tips to pay anonymously.
Also Read: How to Stay Anonymous on Kali Linux?
Cash is King
While this is perhaps the most obvious answer, I cannot stress how often it gets overlooked by people who are concerned about lack of privacy. The only reason that this article has other options than Cash as the main means of attaining privacy is that cash payment is fading away. However, there are still many scenarios where we have Cash, and we can use it to pay, and we simply neglect it. So as far as privacy goes, Cash is king and the best anonymous payment method in the world.
If anonymous payment is so important to you that you want to stay completely anonymous, not only should you use your chances at using Cash with more awareness, but you also need to actively withdraw Cash and have it at hand in order to use it as much as possible. Cash is incredibly difficult to track, if not outright impossible. I am not saying you should become “that guy” who hides his Cash in the mattress. But even if Cash is no longer available as the primary payment method in many cases, such as distant purchases, it still remains a great complementary action to mix it up and add to your anonymity.
Burner Emails are another essential complementary action that will take your anonymity to the next level. Most of us have 1 to 3 “main” emails that we have used for years. Unsurprisingly, even if these emails do not contain our actual name, they are incredibly easy to trace back due to their operational history and the cookies or other specific services that they are associated with. Now I know creating a Burner email can sometimes be a chore, and you do not want to create another one for the hundredth time. Maybe the fact that the email database of the US main taxing body IRS, was hacked less than two weeks ago will compel you to create a burner email for each register that you make. Using a burner email for each register and sign-up will mask your online identity and will also act as a shield for your main emails that you use publicly in work or other public environments.
Will Anonymous Payment Remain a Viable Option?
There are no successful seers, and we’re no exception. While technology is advancing at a blistering pace that will bring more and more comfort to our lives in the future, the potential price that we have to pay for that comfort will most likely be in the form of more compromises in our privacy and especially financial privacy and anonymity. The purchase history of many less careful people is already being used by the algorithms to target them with ads. As we speak, there are many jurisdictions that are publicly discussing the probability of banning cryptocurrencies altogether, which obviously will not help. With that said, there are many startup companies and technology companies that are actively working to increase our privacy in order to make our right to cashless anonymity a reality. So while the future does not look the brightest, it certainly is not as dark as some like to portray. Cryptocurrencies and blockchain are very good recent examples of technology moving towards our inherent rights to privacy and autonomy, and we hope there is more of that in the future.
That was a long read! So, thank you for making it this far. As I mentioned, you simply cannot achieve partial or full anonymity with a single procedure or guide. Instead, it involves many little steps and complementary actions that together work to keep you anonymous in the financial system.
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Is Bitcoin Really an Anonymous Payment Method?
No. While Bitcoin does grant you a base level of partial anonymity, any investigating organization can easily track your public transactions on the blockchain and even match it with your activity at the point of entry to detect you.
What About Anonymous Receiving?
Basically, you need to implement all the mentioned measures in the article, but from the perspective of the receiver. Use burners and VPNs, and limit the amount of personal data that your receiver account requires.
What is the Single Best Undisputed Anonymous Payment Method?
As previously mentioned, there is no single best method. But using Monero on wallets with burner emails and coupled with a mixer for extra safety seems to be the perfect amount of overkill to achieve full anonymity.