Cryptocurrencies were created as an alternative to traditional fiat money, such as dollars and euros. Besides offering a higher level of security and convenience in use, the critical advantage of crypto is anonymity.
Although you may not have to provide personal information to create a bitcoin wallet, the cryptocurrency's network functions as an open ledger. It means that all transactions can be traced to the owner's wallet.
Moreover, there are plenty of services and programs designed to track operations with the most popular cryptocurrencies. As a result, Bitcoin mixers appeared. Their main goal is to increase the anonymity of transactions.
What is a Bitcoin mixer?
Bitcoin's advertised anonymity has misled many members of the crypto community. Bitcoin even became the primary payment means for criminal activities such as money laundering and terrorism financing.
However, many crypto users who operate legally still choose to pay attention to their anonymity. After all, basic knowledge of Blockchain technology allows any user to track transaction data to learn the Bitcoin address's current balance and operations history.
With that said, it is no surprise that the anonymity of cryptocurrency remains highly controversial. Therefore, bitcoin mixers were created as a solution to the first cryptocurrency's security issues.
Bitcoin mixer can be defined as an anonymization service that makes it impossible to track transactions on the blockchain by dividing them into small parts and moving multiple times between different addresses.
How does a Bitcoin mixer work?
A mixer is an application or website that accepts users' coins and mixes them with others. The user's coins for the transaction are split into many small parts and then randomly mixed with the coins of other users.
The process takes place based on the given algorithm. As a result, the recipient obtains the needed amount of coins that consist of many pieces previously owned by unknown participants.
Centralized vs decentralized mixers
There are two main types of bitcoin mixers to be distinguished: centralized and decentralized.
The former means that anonymization is achieved by mixing all participants' transactions. For instance, a user sends funds to the service, pays a set fee, and receives the same amount of funds in different coins.
When mixing, the funds are divided into small parts and then randomly sent to the wallets created and owned by the service. Such action is repeated dozens of times, and only then the coins are sent to the specified address.
If you decide to go for a centralized mixer, be sure to choose a reliable and technically secure platform since the service acts as a middle-man and solely controls the process.
As for the decentralized mixers, they were developed as an improved alternative. A decentralized mixer serves as a platform where users can interact without an intermediary.
Participants in the mixing process don't have any information about other users and mixing stages. In addition, since the service doesn't participate in the mixing, it reduces the possibility of theft.
Anonymous transactions are paid out in a random order for a random number of coins, which add to the required amount.
How to choose a Bitcoin mixer?
If you want to stay on the safe side and maintain the total anonymity of bitcoin transactions, there are several things to consider while choosing a mixing service.
Security
Since you ensure your funds with a third party, choosing a reliable and secure platform is the number one thing. Make sure that the company has considerable experience in the market and a good reputation.
We would also recommend going for a service that does not store any information about users and their transactions. Modern mixers such as blender.io, for instance, allow only temporary data storage necessary to complete the deal. Immediately after, the history of interactions is deleted.
Speed
Another vital criterion is speed. Make sure that the service offers an immediate mixing of the coins. It takes some platforms from several hours to several days to process your mixing request. This is primarily the case with unpopular mixers that do not have enough coins.
A good service will process transactions instantly since there is no need to wait until the required number of transactions are accumulated to form a pool. Make sure that the mixer has a large reserve fund of previously mixed coins.
Withdrawal delay
If you want to achieve maximum security, consider using time delays. A delayed withdrawal helps to break the connection between new and old coins even further.
Most services offer a standard delay that the user cannot change. Nevertheless, modern platforms allow you to control the withdrawal process fully. For instance, you can choose an instant withdrawal or postpone it for a time period from 1 to 24 hours.
Mixing code
To improve the quality of mixing, top services use the mixing code. Usually, you will receive this code after the first interaction with the mixer. Each time you wish to blend your bitcoin, you will have to enter the previously obtained mixing code.
It ensures that you will not receive coins you have previously sent into the mixer. The following withdrawal transaction will contain exclusively new coins received from sources that cannot be traced back to you.
Fees
We would also recommend researching the fees that the service imposes. The terms can differ, but an appropriate commission usually ranges from 1% to 3% from the transaction amount.
However, there are mixing platforms with even better terms now. For instance, you can choose a service like blender.io that offers a dynamic fee. It means that you decide what commission amount you wish to pay — 0,5% to 3%.
The higher the fee, the better the quality of anonymization. This is because you will receive coins obtained from reliable sources. If you choose to pay a minimum fee, you will get coins from the public pool.
Summing up
Although many still believe that crypto is anonymous, it is not always the case, especially with the bitcoin network, which allows anyone to track the transaction to the recipient and sender addresses.
In this perspective, if you wish to conceal any personal and transactional data fully, use a bitcoin mixer.
Such services mix your coins with other users to send you new "clean" ones that cannot be traced back to your address. Since such a process requires trusting your funds to a third-party service, make sure to choose a reliable and convenient platform.
Modern mixers such as blender.io offer multiple advantages: instant processing, delayed withdrawals, 100% security and low fees.
