How to send bitcoin anonymously

Privacy in crypto, as well in any other realm of our life, is a tricky matter: every day, we give away our personal data to use government services and financial platforms, book and buy things online, communicate, and pay our bills. All that information is stored in large databases owned by tech corporations and governmental agencies.

If you're wondering how to send bitcoin anonymously or whether bitcoin transactions can be traced, the answer is not as simple as many assume.

The history of global cybercrime shows that any online database can be breached – even one operated by the FBI. And this means not only governments and corporations, but also criminals can compile and analyse huge databases of private data and use it for malicious purposes – and AI is making it easier than ever.

If you’re a crypto user, the contents of your wallets and your transactions may also become a part of your detailed “digital portrait.” With the modern technology for blockchain analysis, making your coins completely untraceable is pretty hard. So how can you prevent strangers on the internet from seeing what you spend your bitcoin on? And more importantly, how to send bitcoin anonymously in practice?

Let’s start with the hardcore way: never KYC. The only real way to keep your wallet not tied to your identity is to never touch any platforms and services that require KYC (know your customer) verification. This means only buying and selling bitcoin peer-to-peer and only spending it in places that don’t ask you to register your ID.

But even when buying something with no KYC, you need to be mindful of what information about yourself you’re providing to a seller: if you leave your main email or order delivery to your actual address, your wallet address might still get connected to your identity.

However, even if you can’t reach absolute anonymity, there are still ways to make tracing your bitcoin pretty hard.

Custodial mixers

This is probably the easiest way technically to send bitcoin anonymously: custodial mixers take your coins, mix them with those of other users and release them to a new address (or several addresses), taking a service fee in the process. The service will do all the technical heavy lifting for you, however, it will also know your addresses. Normally, the mixers promise to delete your addresses from their databases some time after the transaction, but you need to trust them to do that.

Another risk is that custodial mixers get shut down by law enforcement agencies from time to time, because they are often used by scammers, black hat hackers and other cybercriminals. For the same reasons, centralized custodial platforms are suspicious of funds coming out of mixers and may treat them as criminal money by default.

Since 2019, a number of founders who operated crypto mixers were arrested and charged with facilitating money laundering, the services got shut down and in some cases sanctioned by the U.S. The list includes Bestmixer.io, Helix, Bitcoin Fog, ChipMixer, Cryptomixer, Blender and Sindbad. U.S. law enforcement also went after some non-custodial services – see the well-known cases of Tornado Cash and Samourai Wallet founders – but non-custodial apps still don’t hold your funds and don’t know your addresses.

DIY CoinJoin

A harder but more self-sovereign path is to run a CoinJoin transaction, mixing your coins with other people’s funds yourself. CoinJoin is a privacy mechanism for bitcoin, allowing people to simultaneously mix their transactions together without a third-party centralized operator - one of the more advanced ways to send bitcoin anonymously (although popular mixers use CoinJoinon on their back end, too).

To run CoinJoin yourself, you have several options.

First, the easiest one – use a wallet with the CoinJoin function. Until fairly recently, Samourai and Wasabi wallets were the go-to options, however, the U.S. law enforcement shut down Samourai in 2024, arrested its two founders, Keonne Rodriguez and William Lonergan Hill, and seized its servers, so Samourai’s Whirlpool CoinJoin operator is no longer functional. Wasabi’s team stopped supporting CoinJoin the same year.

Sparrow Wallet allows you to run CoinJoin to either make the funds inside your wallet more private or send it to someone in a private manner. To do the first, you create a “fake CoinJoin,” turning two units of bitcoin inside your wallet into five new outputs and making it appear to an outside observer as if two people participated in CoinJoin. And the PayNym function allows you to send funds to another Sparrow user more privately as the software generates a new address for each transaction. You can read more about how it works on the wallet’s website.

If you want to go full hardcore, self-covereign mode, you’ll need to run your own bitcoin node. After you get your node running, set up the Jam app – this is a decentralized marketplace for CoinJoin transactions. It allows you to automatically find collaborators for joint transactions and also earn sats while helping others to CoinJoin.

Finally, you can always do CoinJoin manually with the people you know, but that would require a certain amount of trust, as one of you would need to serve as a coordinator, gathering transaction data from others – this Bitcoin Magazine article explains the process in detail.

Lightning strike

Another way to spend your bitcoin privately is to do it via Lightning – the bitcoin blockchain’s Layer 2. Privacy here comes from the fact that Lightning payments bounce between payment channels across the network, making it from one node to another without leaving any visible trace on the ledger. For this option, as usual, you can either use a wallet supporting Lightning and facilitating such transactions – that would be a custodial solution – or firing up your own Lightning node. Read more about Lightning and how it works.

Bitcoin privacy is a spectrum: the amount of effort you are willing to make to achieve it is up to you, so be curious and have fun with it!