Cryptocurrencies like Bitcoin offer pseudonymity to users by design. Nonetheless, you need tools like Bitcoin mixers to become completely anonymous. Mixers are private third-party tools that help users maintain their anonymity while transacting in cryptocurrency.
If you’re not entirely new to the crypto sphere, you already know that blockchains like Bitcoin are altogether public. You can find watertight records of all Bitcoin transactions ever processed since its launch in 2009. While some people love this feature, others hate the general nature of Bitcoin and prefer a little more anonymity.
If you belong to the latter group, you have two options to help keep your Bitcoin transactions completely private. The first one is to try and obscure details of who sends funds to whom. The second option which is becoming more popular is using a cryptocurrency mixer, a.k.a. Bitcoin tumbler. This tool jumbles up the amount of Bitcoin in private pools before it spits them out to their intended recipients.
The idea behind a Bitcoin Mixer is to shuffle crypto through a black box. For example, suppose you sent 20 Bitcoin to someone. In that case, it will be difficult for anyone else to determine that person X has sent 20 Bitcoins to person Y. If anyone visits a public explore, the only thing that will be displayed is that X sent Bitcoin to Y from a mixer, just like several other people did.
How Do Coin Mixers Work?
Coin mixers work by mixing your cryptocurrency with a giant pile of other cryptocurrencies and then sending you smaller units of cryptocurrency to the wallet you’re sending crypto to. The total amount received will be minus 1-3%. The 1-3 % is generally taken as a profit by the coin mixing company. This is how they make money.
To use a crypto blender, you must be willing to send your crypto to the blending company, or else you’ll have nothing to mix. However, because you are sending some of your money to the service to be mixed, you need to make sure that you send it to a reputable coin mixing company. Otherwise, you could potentially be robbed of your money.
Types of Cryptocurrency Mixers
There are two different types of cryptocurrency mixers, namely:
Companies that employ centralized mixers such as Blender.io accept your Bitcoin before sending back different Bitcoins for a fee. The greatest challenge with centralized mixers is that while the link between the incoming and outgoing Bitcoin is not public, the mixer keeps the transaction records. That leaves the possibility for anyone to reveal the details in the future if they choose to.
On the other hand are decentralized mixers such as Wasabi and JoinMarket, which use protocols like CoinJoin to obscure Bitcoin transactions using peer-to-peer or coordinated methods. In this case, the protocol enables groups of users to collect a given amount of Bitcoin before redistributing the crypto to everyone else at random. This means, therefore that an observer cannot tell which user sent a particular user crypto or where the crypto a user received came from.
Who Needs Coin Mixers?
Among the different people, groups, or organizations inclined to use Bitcoin mixers are individuals or companies that make large transactions and want to erase any traces linking them to the payments. Such companies or individuals may want to keep their dealings secret, especially if they don’t want their competitors to know what they are up to.
On the other hand, are wealthy or high-net individuals who don’t anyone seeing the number of cryptocurrencies they are transacting; they usually want to avoid becoming victims of hackers. Most hackers target wallets of individuals they notice are receiving vast amounts of cryptocurrencies since they see the said wallets’ traffic.
The concept of con mixing is a new and exciting invention that helps to make cryptocurrency users more secure. Take the time to study more about the subject if you’re interested in using the service.
Tom is a freelance writer with over 10-years’ experience in content creation, blog writing, and SEO specializing in the blockchain and cryptocurrency niche. As a philosophical figurehead, he believes that to make our world a better place, we must invest in incorruptible products and procedures, of which Bitcoin and other cryptocurrencies are leading examples.