Bitcoin Mixer - Shuffling Your Bitcoin For Anonymity and Privacy - Blockchain.News

Bitcoin Mixer - Shuffling Your Bitcoin For Anonymity and Privacy

Lucas Cacioli Oct 13, 2020 09:30

Bitcoin Mixer offers a solution to the many risks posed by transacting Bitcoins online through a process known as Bitcoin shuffling.

Bitcoin Mixer - Shuffling Your Bitcoin For Anonymity and Privacy

Bitcoin investors and enthusiasts highly value their anonymity and privacy. There are many reasons for this that are not just related to criminal activity. Although privacy is obviously a necessity for criminals, law-abiding citizens need privacy as well to protect themselves from such criminals who are constantly on the hunt for a vulnerable target.

Bitcoin Mixer offers a solution to the many risks posed by transacting bitcoins online by offering a service that exchanges your BTC with others’ BTC, a process known as “bitcoin shuffling,” to protect individuals’ anonymity and privacy.

There are a variety of coin mixers out there (not just for Bitcoin) that follow the same principle, but with their own unique mixing algorithms and models.

Why Use Bitcoin Mixer?

It is a common misconception that Bitcoin is completely anonymous and untraceable. In fact, Bitcoin is a completely transparent network. Because transactions are broadcast publicly on the digital ledger known as the blockchain, a clever criminal or law enforcement officer can perform a “blockchain analysis” to gather key data about the bitcoin address and the person behind the online wallet, such as how much bitcoin they own, how they spend their money, and other personal information such as name and contact details.

For instance, if an individual purchases from a third party with BTC, like a crypto exchange or a retailer that requires identity verification, then personal information about the identity behind the bitcoin address pseudonym can be leaked, stolen, or sold to those who request it, be it law enforcement officers or nifty thieves. Anyone’s Bitcoin address could theoretically attract unwanted attention, whether it is due to a person’s wealth, the suspicion of illegal activity, or is simply a random target.

Once your personal identity is linked to the wallet, you can be scammed or hacked to access your private key, which is your most important password that executes any transaction on the network.

Bitcoin, when used properly, is secure and difficult to trace, so it has attracted people who value privacy. However, it is important to know that individuals’ pseudonyms, or the string of letters and numbers that is their bitcoin wallet address, can be linked to one’s real identity via careful monitoring and analysis.

For example, in the well-known case of Silk Road founder Ross Ulbrich, his Bitcoin transaction activity was traced to a number of pseudonyms, which eventually led to his real identity after an FBI agent combed through archives of digital forums and found an incriminating post.

To maintain privacy and eliminate the possibility that your transaction history and activity can be monitored, the easiest solution is to simply shuffle or mix your bitcoins with others’ coins using a coin mixer. This way, your coins (which possess transaction history data), won’t reveal a clear forensic trail.

How Does Bitcoin Mixer Work?

Bitcoin Mixer works by sending you fresh BTC, Ethereum, or LTC, for the amount you send in, in order to randomize your funds and obscure the source of bitcoins you spend from hackers or third parties. The process is completely automated and does not store any personal information to ensure security and trust. All you have to do is provide the address you wish to send fresh coins to and send in the amount that you wish to mix. It is recommended to mix your coins every so often, or after using any exchange, buying new bitcoins, or purchasing from a merchant that requires identity verification. The service charge is a randomized 2-5% fee for every transaction.

There have been a number of mixing strategies out there, ranging from completely centralized solutions like Bitcoin Mixer where users rely on trust, to decentralized solutions where each user puts their amount into a pot and receives the same amount back but with fresh coins.

In Summary

When it comes to financial transactions, anonymity and autonomy are paramount. Using cryptocurrencies offers a lot of advantages, but still pose some classical risks. In a decentralized, transparent environment, bad actors could identify your wallet address by tracking your coins on the blockchain transaction history, which can lead to private information getting into the wrong hands, and can ultimately lead hackers to try to identify who you are.

Coin mixers like Bitcoin Mixer are simple and effective solutions to minimize such risk and should be used by anyone who values their privacy and security.

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