For those of you who don’t already know, Bitcoin is a cryptocurrency. It is the world’s first decentralized digital currency. That is a fancy way of saying that there is no one group who controls the creation and usage of bitcoin. It is basically a currency that allows you to send or receive money electronically, without the need for banks or middle men. This currency is becoming increasing popular, so much so, that it could be the next big revolution in the evolution of money.
Bitcoin mixers are a great way to add privacy to your bitcoin transactions. By mixing your bitcoin with other users’ bitcoin, you can create a transaction that is difficult to trace. This can be helpful if you’re trying to keep your financial activity private.
A few people were lucky enough to buy BTC early and it has made them, as well as some big time investors like Tim Draper and Michael Saylor very wealthy. However, there has been a problem, Bitcoin is only partially anonymous. The creator of bitcoin was anonymous. He referred to himself as Satoshi Nakamoto. Over time, more and more people started getting interested in this currency. Most were people who wanted to invest and make a lot of money. In order to protect yourself from prying eyes, most bitcoin users would prefer to not have all their transactions available on the blockchain, though most simply convert their bitcoin to regular money, known as ‘cashing out’.
This seems like a sensible thing to do. However, there is a problem with this. When you convert bitcoin to regular money, or if you simply trade for another crypto on a centralized exchange like Binance, you are entering into a public financial transaction. This means that people can now track where your money is going.
This is why people use Bitcoin mixers.
There are a few different ways to mix bitcoin. You can use a centralized mixer, which will hold your bitcoin and then send it out in various fractions to other users, then return various fractions from the pool back into your account. Think of it as jumbling up thousands of numbers to the point that it becomes computationally impossible to ascertain where your current BTC came from. Or, you can use a decentralized mixer, which allows you to mix your bitcoin with other users without having to trust a third party. These use an escrow service.
A bitcoin mixer essentially takes your money and exchanges it for someone else’s, meaning that the original owner is now gone as far as any prying eyes can determine. Without their original bitcoin, they cannot track your original bitcoin.
Most bitcoin users are aware of this. However, when they found out that some of their transactions were going to be tracked by the US government, they were understandably annoyed. Some moved their crypto off exchanges, swapped it to Monero, or tumbled it once they learned that their bitcoin transactions were not protected anymore. Some decided to stay anonymous and chose to only keep their bitcoin on exchanges who are not reportable to the US authorities. At this point, they were effectively trading one type of anonymous currency for the protection provided by exchanges who do not require KYC/AML documentation.
This is where a bitcoin mixer comes into its own. A bitcoin mixer provides a service that allows users to mix their coins. The service takes their coins, mixes them with others, then sends them to someone else. This is done by a company using anonymizing techniques to protect your bitcoin. They are not connected to you in any way other than by the service they provide.
Mixing bitcoin can be a bit complicated, so it’s important to do some research before you get started. But once you understand how it works, it’s a great way to keep your bitcoin transactions private.