The emerging market of cryptocurrencies has given rise to various services associated with it. One such service is Bitcoin mixing or cryptocurrency tumble.
The most popular misconception about Bitcoin mixing is it can facilitate large amounts of transactions and keep them anonymous. Did you think so too?
Well, there are many such misconceptions about Bitcoin mixing. Read on to know more about them.
What Is Bitcoin Mixing?
Also known as cryptocurrency tumble or mixing services, Bitcoin mixing services mix up possible identifiable and ‘tainted’ cryptocurrency funds with others.
Hence, making it impossible to detect the destination addresses. Thereby, the ties between input and output addresses are obfuscated.
The main objective of Bitcoin mixing is to provide a better level of privacy. Even since the days of Darkcoin (rebranded to Dash), which was developed by Evan Duffield and Kyle Hagan as a digital currency for darknet markets, crypto users have been looking for ways to anonymize their holdings.
4 Common Misconceptions About Bitcoin Mixing
Before availing of Bitcoin mixing services, you should glance at some common misconceptions revolving around it. Hence, you can learn about them better and choose it only after understanding Bitcoin mixing thoroughly.
1. Mixing Services Makes Funds Anonymous
Mixing services can obfuscate privacy relatively, but only with non-rigid analysis. In addition, analytical companies possess information of addresses associated with people.
The analytic companies have multiple exchanges and several merchant services providing them data. Moreover, they possess the ability to do statistical analysis. Hence, with this combination, your funds cannot attain complete anonymity.
You may make the addresses and perhaps the identity link stealthily weak. However, you cannot hide or falsify the value of the transactions.
Note that the values can be seen clearly in a transaction.
2. Mixing Service Are Fool-Proof
The popular myth about mixing services is debunked here! Mixing services are not foolproof because of the CT system invented by Greg Maxwell.
CT or Confidential Transactions makes cryptocurrencies and mixing more efficient. There is a mechanism called bulletproof. Despite being encrypted, bulletproof can secure the equivalent values within a CT.
Therefore, mixing services used alone are not foolproof.
3. Risks Are Minimal for Mixers
Centralized mixers can contain a single point of failure problem. Despite trusting the mixing service with your data, they will compromise your privacy if they breach and share your data with a third party.
Therefore, there is considerable risk for mixers.
4. Law Has Very Little Intervention
You may think mixing services will keep your transactions confidential. However, you require to know, mixing vast amounts of money may be illegal.
The law is getting more stringent because the anonymous use of darknet markets is becoming easier, making the job of law enforcement harder.
With the increasing benefits of Bitcoins, the market and its users are flexible in trying various options to add more anonymity levels. Hence, mixing services can be beneficial. However, it is essential to know that Bitcoin mixing is not 100% anonymous — matching your values is equally crucial.