It's a coffee shop because coffee shops typically have WiFi. :) He doesn't hand over a physical object at all: you just show him the cash, then have him transfe

It's a coffee shop because coffee shops typically have WiFi. :) He doesn't hand over a physical object at all: you just show him the cash, then have him transfer the Bitcoins to your account, and wait for the transaction to post/verify in your wallet program (reversing even a single verification block would have an astronomical computational cost, so you don't have to wait for 6 verifications even though that's the cryptographically sound way to do it). Then you hand over the cash. Bitcoins are highly divisible, so you can purchase $1 worth of Bitcoin if you want. Probably that's not worth it to make it worth anyone's time, but lots of people are willing to show up to a coffee shop to sell amounts of Bitcoin >$200. So the astromical cost of Bitcoin isn't really relevant to how much you can buy/sell in a single transaction. I am not a lawyer, but my understanding is that transfers <$10K don't require an audit trail legally. That said, if you don't want an audit trail, Bitcoin's public ledger makes it not the best choice. There are lots of reasons you might avoid buying from exchanges that aren't about leaving an audit trail (for example: simply to screw over the exchanges for political/social reasons).