Bitcoin Mixing: Understanding the What and Why

This is a guest post by Precious Onyegbu

Bitcoin and its processes are like a coin with two sides to it.  If you have some knowledge about bitcoin, you’ll agree that it is the best and excellent way to make anonymous transactions like donations, purchases, etc without incurring a loss of money or been affected by unstable prices, that’s one side of the coin. 

The other side, however, is the fact that any transaction made is not totally anonymous as any activity or activities carried out are recorded and made available to the public through Blockchain (a compendious database responsible for keeping all records of bitcoin transactions). In fact, this is more apparent when bitcoin is used to pay for goods and services because there is always a need to provide salient information like name, address, phone number and sometimes email, what this implies is that a third party has access to your ID and can trace or track you and your transaction as well. 

To this effect, bitcoin mixing (also known and referred to as tumbler or bitcoin laundering) has been offered as the best solution to the seeming challenge of privacy and anonymity in the bitcoin system. Bitcoin mixing offers an opportunity to ‘swap’ your bitcoins for different ones that can’t be traced to its original source. In essence, it mixes one’s bitcoin with other people’s bitcoin in order to make trailing to the original owner a herculean task. To better understand the concept, it operates the same concept with moving of funds around, through banks located in countries with strict bank secrecy laws such as the Bahamas, Cayman Islands, etc. Basically, one sends one’s bitcoin to a bitcoin’s mixing company and gets an equivalent amount of other people’s ‘tainted’ bitcoin sent to the new address. It’s like getting someone to pay for your goods and services, of course, this comes with a little mixing fee in order to avoid advanced analysis, also, such transaction will be delayed a while to prevent tracking.  

How Does a Bitcoin Mixer Work?

The easy steps of the process of mixing bitcoins are as follows;

1. The individual sends their bitcoins to the chosen bitcoin tumbler;
2. The coins along with other people’s bitcoins are deposited in a secure common pool and mixed;
3. After mixing, the individual receives coins which are made up of other people’s coins or sometimes coins from the reserve system of the chosen bitcoin tumbler. 

After these steps have been carried out, the link between the old and new wallet addresses is broken thereby giving such an individual an anonymous, new start on the blockchain. 

Why is Bitcoin Mixing Necessary?

Many don’t see the need to remain totally anonymous, many don’t even care about their transaction information been displayed to anyone who cares to see it, against the mindset that those involved in shady dealings are those who need or make use of bitcoin mixing, it is a necessary tool for all bitcoin users especially for those who actively use bitcoins for transactions. As said earlier, cryptocurrencies operates using blockchains, therefore, every singular transaction is recorded and made public which in turn means that the third party has knowledge of an individual’s wallet address, also able to view all financial history of such user including the balance in the wallet, not only that, the third party will also be able to monitor future transactions and can share the individual’s wallet address with others especially with cybercriminals which the internet is full of. 

Therefore, in order to avoid sad stories and to keep one’s personal anonymity including all information concerning one’s cryptocurrency funds, it is best to make use of bitcoin mixing. 

How Safe is Bitcoin Mixing?

Many of the bitcoin mixer companies operated online use .IO and do not request for any form of user registration, e-mail or personal information at all. Also, most of them are legal as they have been reviewed on bitcoins platforms, e.g.  bitcointalk.org and are being recommended to other bitcoin users.

 However, one has to be very careful and make necessary research when choosing a bitcoin mixer company as there are so many cybercriminals on the net who are out to exploit people. One wants to be sure that one doesn’t become a victim of the very thing one is trying to avoid. 

One of the methods employed by a trusted mixer is the availability of a Letter of Guarantee where the obligations of such company are confirmed to the user by a cryptographic key, in most cases, the Letter of Guarantee can’t be falsified. If any of the obligations are not met, the user can file, submit and publish a complaint in the official thread of the company on the BitcoinTalk forum. 

How long does it take to mix Bitcoins?

This all depends on the company chosen and the terms and conditions that apply; some companies send new set of coins immediately originating from unrelated/unconnected wallets to the individual once the initial coins appear in their pool and the first miner confirmations are accepted, some delay delivery in order to completely throw ‘hounds’ off their track, others also come to terms of agreement with the individual on delivery time settings. 

CHARACTERISTICS OF A GOOD BITCOIN MIXER

• It must be able to guarantee 100 per cent anonymity such that it is untraceable and defiant to complex or advanced methods of blockchain analysis.
• It must be safe, non-complex, dependable and service fees must be logical/rational and made visible to the user/customer.
• It should provide detailed guidance on the use of the service, educational articles and useful materials in order to make the experience smooth.
• It should be able to protect against the return of old coins in ensuing mixing.
• It should be able to automatically and permanently destroy the history of successful transactions maximum after 24 hours.
• It must not ask for any identifying and traceable information for any use.
• Privacy and security policies must be created and enforced to preserve and uphold anonymity. 
• Must be Tor-friendly and SSL secured
• Must charge logical or rational fees.

Best Bitcoin Mixing Services

Mentioned earlier is the fact that not all bitcoin mixers online are dependable, however, some have been reviewed and recommended over the years, some of them are;

1. BESTMIXER.IO: it has been rated especially on the BitcoinTalk forum as the leading bitcoin mixer on Clearnet. It separates new from old addresses by sending coins to other people and delivering theirs to the client ensuring anonymous transactions. BestMixer works with a range of cryptocurrencies including Bitcoin, Ethereum, Litecoin and Bitcoin cash, its speed depends on the delivery time setting chosen by the user. It is Tor-friendly and secured with an SSL certificate, it boasts of servers protected from any form of influence from locations in numerous dependable data centres, it also follows strict security and privacy policies assuring clients of complete anonymity. To this effect, it operates a 24-hour stint for histories and then totally remove them. It also has a great interface which is device-friendly, making it easy to use for everyone, even with a mobile phone. It operates a minimum transfer of 0.005 BTC, BCH, or LTC. It offers automatic and free membership and generates a code unique to each user, the more the transactions, the more the discount it offers its users. 

1. BITCOIN LAUNDRY: this mixer cuts ties off all old and new addresses, thereby ensuring that history of the chain of transactions fades and the identity of such user becomes imperceptible, it also promises a friendly user interface, low charges and advanced security in the mixing system. Bitcoin Laundry charges a fee of 1% plus 0.00008 BTC per payout address and backs up transactions from .0005 to 38 BTC. It also provides an opportunity for users to send their coins to about 5 payout addresses to guarantee extra anonymity. It also offers users the ability to choose a preset or random delay for their payout for each address which makes it a herculean task for third parties to trace the transactions. It keeps history logs for one week and automatically delete them once the week elapses, to this effect, users are also provided with the opportunity to delete their history logs at any point. The platform can be accessed via clearnet at bitcoin-laundry.com, or TOR at btcdryi67te57itq.onion.

1. BIT BLENDER: launched in 2014 by an anonymous crypto-enthusiast and software developer, BitBlender is considered one of the oldest and easy-to-use bitcoin mixer, which is popular among the darkweb.net. it offers a randomized fee of 1 to 3% and operates as much as ten different addresses to ensure maximum privacy. It offers options of either opening/registering an account (in order to use the full range of tools) or to quickly mix their bitcoins without registering an account. It ensures that a user doesn’t get the same bitcoins sent in a previous transaction. It boasts of two additional tools scarce in other bitcoin mixers which are Auto-Withdrawal and Quick-Withdraw;

• The Auto -Withdrawal tool affords the user the opportunity to set addresses to which the website will automatically mix the coins to once confirmations are received. This tool will make multiple and regular mixers’ users find it easy to mix.
• The Quick Mix tool is enormously beneficial for those who desire to make it fast and simple. This feature also works for the frequent client that has no wish to create an account.

In conclusion, bitcoin mixing is a very essential tool for all bitcoin users and potential clients; it guarantees maximum anonymity and protects one from cyber-crime. 

Author’s Bio: Precious Onyegbu is the founder of NGexchanger, a bitcoin provider in Nigeria.