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Web3  · 05/17/22

How to buy Monero privately (Step by step guide)

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Monero is the most private cryptocurrency. How to buy XMR when you care about staying anonymous? Guide to buying Monero with and without buying Bitcoin first.
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As you probably know, Monero, or XMR, is the cryptocurrency designed for absolute privacy of transactions.

People invest in Monero even though Monero cannot be staked, there is not much lending income on it, the core dev team runs no advertising for Monero nor strike any business partnerships. Additionally, Monero is not always supported by mainstream crypto wallets or exchanges. So, what is the value that Monero investors see in the coin?

Monero’s value proposition is simple: it is private, untraceable and fungible.

When we say that Monero is private, we mean that transactions on the Monero blockchain cannot be linked to a specific user - Ever. This is in contrast to Bitcoin, where every transaction is publicly visible on the blockchain and all of your activity can be traced back to you, if you didn’t buy your Bitcoin in a non-KYC way.

Monero removes all this. You cannot link a transaction to a person over more than one hop: If you buy Monero on a KYC exchange and you withdraw it, then that particular transaction is well documented and linked to you. But if you move the coin out of that address, that track is lost. The coin could have been stolen for all you know /s

If we want to throw around opaque technical jargon, it’s Stealth Addresses, Ring Signatures, and RingCT that make every trace die away after a single hop.

Here’s the practical value of that: Blacklisting XMR that passed through a particular address is impossible. You can outlaw the currency as a whole which is not unimaginable, nonetheless it is not the present day reality.

Here below is the step-by-step guide on buying Monero privately, just directly for fiat money, and as a second guide we’ll go through the more stealthy version which leaves no trace that you bought XMR whatsoever.

How to buy Monero privately: Single step from fiat to XMR

So, there is one place dedicated to trading Monero for cash or online wallet money (or the other way round), and that is LocalMonero.

The problem with LocalMonero is that it’s basically just a message board where you send private messages with someone. That’s why there’s a link to the “canary message” in the footer: When that message changes, you can safely assume that your private messages on the platform were read by the law.

There’s a strong relation between XMR and crime, so in some jurisdictions you might get asked a few questions just for a proof that you were buying Monero.

If you want to buy Monero as an investment or even for speculation, then you are fine though.

Here’s how to do it:

  1. Get a Monero wallet

    The easiest wallet to work with is MyMonero.com - available for desktops and phones.

  2. Sign up at LocalMonero
  3. Do not post an ad but instead look through the list of vendors.

    LocalMonero will show vendors from your country. Payment methods include national bank transfer, AdvCash, Paypal or cash.

  4. If you find a vendor, check if they have good ratings on their profile.

    50+ good trades generally means a reliable vendor.

  5. Contact the vendor to negotiate the amount.

    The vendor will most likely ask for your ID and that’s at the discretion of the vendor.

    In this situation, do not send your ID via LocalMonero but ask to send the (watermarked) ID via Telegram or email, mentioning the trade ID in your message to prove you are the same person. This way you will not document yourself right on the platform.

    The vendor should accept it as verifying email of the counterparty is recommended by LocalMonero in case of disputes.

  6. Agree on a trade only if it will be executed via LocalMonero.

    The platform has an “arbitration bond” function - essentially an escrow - which protects you from scams.

    When a trade is made, the seller’s LocalMonero wallet is automatically debited with an amount equal to the deal’s value. This means that if the trader runs with your cash and does not finish the transaction, LocalMonero support may direct the money in the arbitration bond to you.

  7. Get the coins into your wallet that you set up in the first step.

  8. Trade with the same person over again.

    Once you build trust, it is safer to trade small amounts outside of LocalMonero.

    You risk fraud but you save on fees, it’s up to you to decide if that’s worth the risk.

Of course, if you don’t care about being KYC’d, you can buy Monero for fiat on Kraken, Binance or Bitfinex too - but trading directly from fiat will need you to get verified there.

How to buy Monero with full anonymity: The two-step buying process

The two-step buying process starts with buying BTC or ETH without KYC.

  • Step 1 - Buy BTC on a non-KYC platform
  • Step 2 - Trade BTC for XMR on a non-KYC platform that trades XMRBTC - nowadays, you need Bitfinex for that
  1. Step 1 - Buy BTC on a zero-knowledge platform

    One of the safest no-KYC alternatives to onramp to crypto are p2p markets like LocalCryptos. They allow exchange between fiat currencies and cryptocurrencies, but have zero knowledge of the details of the transactions, which under the 2022 laws still exempts them from enforcing KYC/AML.

    (There is a law-enforcement push to change that: Financial Times, 7 Feb 2022. If you’re on the fence about onramping, maybe it would be a good idea to make up your mind soon. Just saying.)

    The reason why zero-knowledge is so important in a P2P platform is that when your vendor asks for your ID, you can send it directly through the platform. On LocalCryptos, all your private messages are encrypted, there is no way any of that gets out except when your vendor is actually the law or something.

    In addition to that, LocalCryptos of course have an escrow, so you can open a dispute in case someone doesn’t finish the transaction after you paid.

  2. Step 2 - Buying XMR on a non-KYC exchange

    You will need to do this on Bitfinex.

    Open an account, deposit BTC, buy XMR and withdraw XMR.

    Bitfinex does

    • …not require minimum deposit to unlock trading
    • …not require KYC
    • …not limit withdrawal amounts for non-KYC users

    The ideal platform for this sort of thing (not as if you had much to choose from).

    While most trading exchanges are quick to list random DeFi tokens, Monero’s blockchain is so different and the coin so niche that it is usually not commercially reasonable to support it.

    Hence, FTX doesn’t list Monero and nor do any smaller trading platforms like Phemex and Bitforex. These exchanges focus on speculative trading and in line with that, they only list a XMR perpetual swap, a derivative that pays out in BTC or USDT and does not work with actual Monero at all.

    Binance does have Monero spot (available after KYC), but the community reports serious problems with buying Monero there.

Final words: What to do with your XMR after you buy

Put it into a Monero wallet and look at it! …Not going into any non-PC suggestions here.

If you want to speculate on Monero’s price fluctuations, you can always use the perp on FTX and get a profit without moving your XMR stash. FTX has the lowest fee out of today’s crypto trading platforms and is pretty reliable.

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