TL;DR: When buying bitcoin, one must consider the trade-off between KYC (Know Your Customer) services, which require personal identification and may share user data with third parties, and non-KYC services, which offer more anonymity. Regulated KYC services like Swan Bitcoin in the US, or Bull Bitcoin in Canada, provide streamlined onboarding and security at the expense of privacy. Non-KYC options like P2P transactions and mining allow for greater privacy but can be more risky and there is a learning curve to master. P2P trading platforms like Bisq, Hodl Hodl, or Peach Bitcoin offer a balance, facilitating secure, anonymous trading without the need of KYC data collection.
When buying bitcoin, two important categories need to be considered: KYC services versus non-KYC services.
KYC, an acronym for "Know Your Customer," refers to the process through which a service must identify you and register your personal information before you can onboard with them to purchase bitcoin. They may track the coins you have bought and potentially provide your data to third parties upon request. If KYC bitcoin is not a concern, utilizing a KYC service is relatively safe because such businesses operate under the rule of law, limiting their ability to defraud you.
For US residents, we recommend purchasing KYC bitcoin from Swan Bitcoin or River, and Canadian residents may find Bull Bitcoin most accessible. There are many options for other residents outside these two jurisdictions, including CoinCorner, and Strike (also available in the US).
All of these platforms focus solely on Bitcoin and are managed by knowledgeable, long-time Bitcoin contributors with a proven track record of ethical behavior.
Most exchanges operating in developed countries only permit the purchase of non-KYC bitcoin in small amounts, but you can also obtain non-KYC bitcoin through peer-to-peer (P2P) transactions and mining. Note that mining for profit can be hard to master due to costs, without access to cheap energy and equipment. Because of this barrier, we will not discuss mining (just yet) but will revisit it later in an upcoming Mining section.
Alternatively, P2P Bitcoin transactions can be done in person or through a P2P trading platform, such as Bisq if in the US or Hodl Hodl and Peach Bitcoin if a non-US resident. While in-person transactions can pose risks if you cannot trust the individual you are dealing with, trading platforms provide a safer alternative. These platforms list offers from both buyers and sellers, facilitating matches and allowing the parties to trade directly. Since the platform is not involved in the trade itself, there is no requirement to collect KYC data.