The decentralized cryptocurrency blockchain holds transactions in a public, transparent distributed ledger. As such, the transactions are completely traceable back to their original source. This makes it easy for law enforcement to link real-world identities with Bitcoin addresses.
To mitigate this, crypto mixers — also known as tumblers or Bitcoin mixers — help to obscure the origin of a transaction. These services work by taking the coins deposited from users and pooling them with other funds. The resulting coins are then sent out to recipients.
Crypto mixers have become increasingly popular with individuals seeking privacy, especially in countries with strict anti-money laundering laws. However, their use isn’t without controversy. Many authorities view them as a tool for money laundering and other criminal activities, and some exchanges have banned mixers altogether.
There are a number of different ways to mix cryptocurrencies, including the decentralized method of CoinJoin and peer-to-peer mixers. But centralized mixers pose the risk of trusting a third party and potentially losing your money. And while some centralized mixers claim to anonymize your coins, they often save a record of the links between incoming and outgoing bitcoin.
Because of the risks, it’s important to choose a trustworthy mixer that follows local regulations. And, if you’re planning to use one anyway, remember that there are alternatives that can provide greater anonymity. For example, you can try a Lightning Network transaction or the privacy cryptocurrencies Monero or Zcash. However, they might not be as effective for mixing large amounts of Bitcoin. Crypto Mixer