Bitcoin’s pseudonymity creates privacy concerns among active bitcoin users as transactions can be linked to a user’s identity through a range of blockchain deanonymization methods. As a result, more and more Bitcoiners are choosing to mix their coins using so-called Bitcoin mixers or tumblers.
Read on to discover what bitcoin mixers are, why you should or shouldn’t use them, and a list of the most popular bitcoin mixing services in the market.
What are Bitcoin Mixers?
Bitcoin mixers are a service that allows you to anonymize your bitcoin transactions by ‘mixing’ them with other users’ bitcoin transactions. This makes it much harder for anyone to track where your bitcoin came from or where you sent them to, essentially enabling transactional privacy for Bitcoiners.
There are two types of bitcoin mixers: centralized mixers and decentralized mixers.
Centralized Mixers vs. Decentralized Mixers
Centralized mixers (also called centralized bitcoin tumblers) are run by a single entity, while decentralized bitcoin mixers are run by a distributed network of users. Both types of mixers have their advantages and disadvantages. Centralized mixers are typically easier to use and have more features than decentralized mixers. However, they are also more vulnerable to attacks and censorship.
Decentralized mixers, on the other hand, are more resistant to attacks and censorship, but they can be more difficult to use. However, both centralized and decentralized mixers can help you protect your privacy when using bitcoin.
The type of mixer that is best for you will depend on your needs and preferences.
Advantages of Using a Bitcoin Mixer
There are several advantages to using a bitcoin mixer.
- Increases your transactional privacy and anonymity.
- Helps you keep your bitcoin safe from thieves or hackers.
Disadvantages of Using a Bitcoin Mixer
There are also some disadvantages to using a bitcoin mixer.
- The mixer you use may be hacked or stolen, resulting in a complete loss of your coins.
- The mixer may be shut down by authorities, and your bitcoin could be frozen or seized.
- If you use a centralized mixer, you are placing trust in a single entity, which could be risky.
Overall, using a bitcoin mixer can be a good way to increase your privacy and anonymity when using bitcoin. However, there are some risks involved.
How Bitcoin Mixers Work
Bitcoin mixers work by taking your bitcoin and mixing them with other users’ bitcoin in their pool. This makes it much more difficult for anyone to track where your bitcoin came from or where they went. The mixers then send you back an equivalent amount of bitcoin from their pool, minus a service fee.
There are a few different ways that bitcoin mixers perform their primary function of increasing bitcoin user anonymity.
Some mixers allow you to specify how many hops you want your coins to take before they are sent back to you. The more hops, the more secure, but also the more expensive. Some mixers allow you to set a time delay before the bitcoin are sent back to you, which makes it even harder to trace where they came from. Other mixers have multiple pools that mix the bitcoin, making it even more difficult to track any one user’s bitcoin.
Nonetheless, remember that mixing your coins does not make them completely anonymous. If someone knows which addresses belong to you, they can still trace your transactions.
The biggest downside of using a bitcoin tumbler is that, in most cases, you have to trust the tumbling service provider with your bitcoin. If the tumbler is not honest, they could simply keep your bitcoin and never send them back. That’s why it’s important only to use reputable tumblers.
Fortunately, there are a handful of bitcoin tumblers that have been around for years and have built up a good reputation, some of which we highlight below.
Popular Bitcoin Mixing Services
Let’s take a look at some of the most popular bitcoin mixing services available today.
Wasabi Wallet
Wasabi Wallet is a popular bitcoin wallet that includes a Chaumian CoinJoin mixer.
While the website’s servers may technically be centralized, it’s cleverly designed so that the operator cannot deanonymize users or steal funds. Moreover, the service has a nice user interface to make it clear which coins have been mixed and which have not.
Samourai
Samourai offers another popular bitcoin mixing service. The wallet is known for its privacy-centric features, which make it the perfect choice for those looking to keep their bitcoin transactions private.
Samourai Wallet, like Wasabi Wallet, comes with a Chaumian CoinJoin mixing service, called Whirlpool. However, while the Wasabi Wallet is only available on desktop, Samourai is also available on mobile.
Nevertheless, for users to make fully anonymous transactions from their wallets and protect themselves from any snooping (even by the Samourai team), they would need to connect their wallets to their full Bitcoin node.
Mixer.money
Mixer.money is a bitcoin blender that divides the funds received from each user into smaller parts and mixes them with those of other clients. This way, you receive untraceable coins into your new address as smaller payments.
The platform uses two blending algorithms to anonymize its users’ transactions, and it deletes all data used in these transactions after 48 hours.
Mixer.money doesn’t require registration, and the bitcoin mixing process takes up to six hours. The service supports transactions ranging in size from 0.003 BTC to 50 BTC—and charges 4–5% per transaction plus a small fee for each output address (0.0007BTC). It is also a TOR-friendly bitcoin mixer.
JoinMarket
JoinMarket is an open-source software project that allows users to pool their coins together and then trade them back and forth, mixing up their history in the process. This makes it much harder for someone to track where your coins came from or where they’re going.
JoinMarket is easy to use and doesn’t require any extra setup or configuration. Just download the software and run it on your computer. Once you’ve done that, you can start mixing your coins right away.
One of the great things about JoinMarket is that it doesn’t require you to trust anyone else. The software is open source, and all transactions are done directly between users. There’s no need to worry about a third party stealing your coins or taking your personal information.
Blindmixer
Blindmixer uses a special method called “blind signatures” to make transactions anonymous. It works as both a wallet and a centralized mixing service.
The mixer uses its proprietary coin selection algorithms and supports lightning transactions. It also allows users to transfer money instantly and for free between each other.
BlindMixer’s wallet has a standalone application for Windows and Linux. It uses SegWit natively, offers low transaction fees right out of the box, and supports Lightning Network transactions.
Should You Use a Bitcoin Mixer?
When it comes to protecting your privacy and security online, there are a few different options available to you. One of these options is using a bitcoin mixer.
While some people believe that you should never mix your bitcoin, others think that it is a necessary evil.
So, should you use a bitcoin mixer?
The short answer is that it depends.
If you are looking to simply purchase items or services online with bitcoin, then there is probably no need to mix your coins. However, if you are looking to invest a huge amount in bitcoin or hold onto it for a long period, then you may want to consider using a mixer.
There are a few reasons why you might want to mix your bitcoin.
- First, if you are holding bitcoin for investment purposes, then you may not want people to know how much bitcoin you have. This could lead to people trying to hack you to steal your coins.
- Second, if you are going to be making large transactions with bitcoin, then you may not want people to know where the coins are coming from. This could lead to people trying to track down the source of the coins and potentially stealing them.
- Third, if you are worried about government actions against Bitcoiners, then mixing your coins can help keep your identity and transactions private.
- Lastly, if you simply want to add an extra layer of security to your bitcoin transactions, then mixing your coins can help make it more difficult for someone to track down your wallet address.
The main risk associated with using a bitcoin mixer is that you are trusting the service to keep your coins safe and anonymous. While most mixers do their best to keep your coins safe, there is always the possibility that something could go wrong.
There have been instances in the past where mixers have been hacked, and users’ coins have been stolen. Another risk is that if the service goes out of business, you could lose access to your coins. A possible solution for these issues is to use a trusted decentralized bitcoin mixer.
Though bitcoin mixers can be used for a variety of purposes, such as making it harder for people to track your spending, or increasing your privacy when using bitcoin, there are a few things to keep in mind when using a bitcoin mixer.
- First, remember that not all mixers are created equal. Some have been known to steal user funds, so it’s important to choose a reputable mixer.
- Second, mixing your coins will usually cost you a small fee.
- Finally, remember that mixing your coins does not make them completely anonymous. If someone knows which addresses belong to you, they can still trace your transactions.
Now that you know what bitcoin mixers are and have a number of them to choose from, you can confidently start to keep your bitcoin transactions private.
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