What Is Bitcoin Mixer and How to Use It - Coindoo

What Is Bitcoin Mixer and How to Use It

Editorial Team Avatar
Sep 26, 2018
5 min reading time

A Bitcoin mixer or tumbler is a process through which users hide the source from where they acquired their coins or to whom they will send the bitcoins. Bitcoin tumbling services require a third-party service to cover the connection between the transacting addresses.

Many people resort to using bitcoins for making purchases, donations, and P2P payments for its low transaction fees and anonymity. However, bitcoin transactions are not completely anonymous. The Bitcoin blockchain records all activities on to a public ledger where all BTC transactions are recorded. Also, when you will use your BTC to make a payment for a product, you will be required to provide a name and address so the seller knows where to deliver it. This means that your transactions can be traced and your ID information can be found.

That’s why Bitcoin mixing services are sometimes needed, especially if you don’t want the entire world knowing where you sent and received your BTC. Mixing services fraction the coins used in the transaction and then combines (hence the term) these parts with other fragmented parts from other clients.

This type of mixing used for confusing the source of the ‘original source’ can be considered the equivalent of financial trading systems when one would transfer the funds to banks that are based in countries that have strict laws concerning the provenience of their funds.

How Does a Bitcoin Mixer Work?

Bitcoin tumbling (mixing) uses a third party service which makes the connection between the wallet address that sent the coins and the addresses that received the coins disjointed. So if someone wants the addresses that he or she used in the transaction to remain hidden from curious eyes, then tumbling is a good alternative.

Source: www.cryptalker.com

Coin mixing will offer you an extra cloak of anonymity by mixing your coins with other assets that have been sent before or in their stand-in and sending different coins to the specified address.

Peer-to-peer tumblers were developed to try to fix the drawbacks of the centralized model of mixing. These services take the place of a meeting ground for Bitcoin users, rather than taking coins for scrambling. This enables the users to make the mixings by themselves. The system resolves the issue of theft, as no intermediary is required. Various protocols like Coin Join, Shared Coin and Coin Swap lets users meet so they can create one Bitcoin exchange transaction in several steps.

When it is finally made, the exchange of BTC between the users takes place. Aside from the mixing server, no involved party will be able to find out the connection between the incoming and outgoing wallet addresses. This operation can be executed multiple times with different addresses to make transaction analysis more complicated.

There are some coins, such as Cloakcoin, Dash, PIVX, and Zcoin that have built-in mixing services integrated into their blockchain network.

It should be noted that if you use a mixing service which is unreliable or controlled by a malevolent actor, your coins will most likely get stolen.

How to use Bitcoin Tumbler?

In this guide, we will cover the simple steps needed for you to start bitcoin mixing. It should be noted that the user should already know how to send bitcoins and use .onion sites before proceeding with this tutorial.

To mix coins through this method, you will be required to have the following:

  • Bitcoins
  • The Tor Browser
  • To be able to make a new Bitcoin wallet, both via Tor and on the clearnet. Or you can use Blockchain.info and their Tor hidden service generate some of your addresses.

Step-by-step guide

  • Create BTC wallet no.1 on the clearnet.
  • Transfer you BTC to wallet no1.
  • Create a second BTC wallet (no.2) over the Tor network.
  • Transfer your coins from wallet no1 directly to wallet no.2.
  • Create another BTC wallet (no.3) over the Tor network.
  • Carefully choose a mixer service and set up your transaction thereby making use of the address(es) from wallet no.3. It would be better if you would use multiple addresses, as well as set random time delays. Always verify if you are using the correct .ONION links!.
  • Send the BTC from wallet no.2 over the Tor browser to the address which was provided for you by the mixer.
  • Should you not have your deposit address, sign in and get it while your JavaScript is turned off. Do not use a market that asks you to enable JS!
  • info’s Tor hidden service can be used to check if the coins arrived from the mixer. Once the coins have been sent to you, restart Tor and then send the coins to their final address.

The only problem here would be that the company which owns the mixing service has records of your transactions, and even though they deny that they keep them after the transaction is completed, they can still trace where your coins have been sent.

 In Conclusion

Even though Bitcoin is a remarkable crypto, it is still lacking in the privacy and anonymity department. As a result, Bitcoin mixing services have increased in popularity in the past few years. Remember to always do your research when it comes to mixing services, and seek out the ones with the most reviews and the best reputation.

* The information in this article and the links provided are for general information purposes only and should not constitute any financial or investment advice. We advise you to do your own research or consult a professional before making financial decisions. Please acknowledge that we are not responsible for any loss caused by any information present on this website.
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