A Bitcoin tumbler or crypto mixer is any service that mixes cryptocurrency assets and tokens to obscure their traceable origin.
Cryptocurrency tumblers have arisen to improve the anonymity of cryptocurrencies, usually Bitcoin (hence Bitcoin mixer), since the currencies provide a public ledger of all transactions.
Bitcoin tumblers promise to give you clean Bitcoin in exchange for a small transaction fee. The mixing service disconnects links between Bitcoin wallet addresses.
How does a Bitcoin tumbler work?
For instance, suppose I send you a Bitcoin, you send the Bitcoin to Peter, and Peter, in turn, sends the Bitcoin to Mary.
Based on the fact that the blockchain is completely open, anyone who downloads it for scrutiny can find a direct link between Mary and I.
Furthermore, if we made the transactions on a KYC platform, then the entity carrying out analysis on the chain of transactions that took place between the four of us can track us down, thereby bursting our real-world identities.
However, if I first send my BTC to the best Bitcoin tumbler, before sending it to you, and we repeat the same ‘mixing up’ of transactions across our chains, our identities are obscured.
A BTC tumbler routes transactions to different addresses – splitting them into small tokens, which are reassembled to varying times before forwarding them to a recipient.
Consequently, the link between two parties engaged in a Bitcoin transaction is broken. There is no chain between incoming tokens to outgoing tokens.
How to use a Bitcoin tumbler or mixer
To use a Bitcoin tumbler, you need:
- A tor browser or tor-enabled interface to connect to the mixing service
- A Bitcoin Wallet with the Bitcoins you will be mixing
- Transition wallets
Step 1
Connect to a tor browser and create a new wallet (transition wallet) from a wallet-provider of your choice.
Step 2
Fund your transition wallet (not in any way connected to you) with your market wallet holding your Bitcoins. The reason why you need your transition wallet is that sending your Bitcoins directly to a tumbling service looks suspicious.
Step 3
Create a second transition wallet, which is your third and final wallet.
Step 4
To mix your Bitcoins, this entails sending your cryptocurrency from your first transition wallet to the mixing address.
The mixing service will require you to set various parameters, including the address where you will receive the new Bitcoins (the second transition wallet), the amount you wish to mix, and the duration in which the mixing should last.
Step 5
Send payment to the address provided (your second transition wallet). After you can spend or send the amount, you wish.
FAQ (Frequently Asked Questions)
Let me answer some of the frequently asked questions i found online while researching for the realest meaning of Bitcoin mixers and how they work.
Do I need to tumble my Bitcoins?
If privacy is one of the utmost priorities, while transacting with Bitcoins, then using a tumbling service should be a necessity for you.
You can leverage on a Bitcoin tumbler to erase the origin of your BTC tokens and enjoy anonymous transactions.
However, as aforementioned, you should be extra-cautious of the tumbler you choose to avoid entrusting scammers with your coins.
What is the best Bitcoin mixer?
Currently, i cannot say which of the services online can be classified as the best cryptocurrency tumbling service or mixer out there, as I haven’t made use of them yet.
Subsequently, I will try out some of crypto mixing services in the nearest future to find out which of them is the best to use in tumbling your BTC transaction without glitches.
Are Bitcoin mixers and tumblers safer?
Just like any other SAAS that run on the internet, Bitcoin tumbling can be plagued by a number of risks. For instance, most law enforcement agencies work against Bitcoin tumbling services.
The view that they facilitate transactions of criminal funds. A notion that is not entirely correct as most tumblers are used for lawful activities.
Notable, before settling for a tumbler, always ascertain the legitimacy of its operations to avoid losing your hard-earned coins to scammers.
Are Bitcoin tumblers legal?
Tumbling your cryptocurrency to remove the transaction history is not illegal. There are no explicit laws that ban the process, so feel free to use a Bitcoin tumbler to increase your privacy.
However, there is no fact denying that Bitcoin tumbling is a useful tool if someone wants to cash out ill-gotten cryptocurrency.
Bitcoin tumbling services have strong associations with illegal activities and are carry the tag as money laundering services for cryptocurrencies.
The European Union also took a view on cryptocurrency mixing services. In mid-2019, the Dutch Financial Crime Investigative Service seized the website of popular Bitcoin mixing service, Bestmixer.io.
Working with Europol, the authorities seized six services based in Luxembourg and the Netherlands. Europol alleges that most of the cryptocurrency passing through Bestmixer has “a criminal origin or destination.”
Before its takedown, Bestmixer tumbled around 27,000 Bitcoins.
Tumbling Bitcoins is not explicitly illegal, and nor should it be.
The very real risk, however, is that your cryptocurrency is lumped in with other users tumbling their dirty laundry, so you could lose your Bitcoin in the case of a police seizure.
Are Bitcoins untraceable?
Most popular cryptocurrencies are not completely anonymous, and someone can trace Bitcoin and Ethereum transactions to specific crypto wallets.
If the cryptocurrency wallet user relates the wallet address to a specific account containing identifiable information (like a name, bank account, ID card, and so on), the Bitcoin user is no longer anonymous.
But does it mean Bitcoin isn’t completely anonymous?
It makes sense to say that, Bitcoin is completely traceable.
Remember, the blockchain is completely open, and anyone can download it for analysis, or use a blockchain explorer to pore through transactions and wallet addresses etc.
Most Bitcoin users don’t like that idea, and some people use Bitcoin tumbler to mix their cryptocurrency, hopefully erasing its history in the process.
Can Police track Bitcoin?
This was true of cryptocurrencies, and law enforcement agencies like FBI, is just now catching up and beginning to assign real identities to crypto transactions.
Today, law enforcement agencies can use software to track and trace Bitcoin transactions, which give them leads they need to follow the money trail.
Can a Bitcoin transaction be reversed?
No way… Bitcoin payments are irreversible!
A Bitcoin transaction cannot be reversed, it can only be refunded by the person receiving the funds.
In conclusion
The need to tumble your Bitcoins depends on your take on anonymity in cryptocurrencies. Bitcoin is pseudo-anonymous.
If you want more privacy from your cryptocurrency, using a Bitcoin mixer service is one necessary option available for you to make use of.
Another option is using an anonymous cryptocurrency with VPN and anonymous wallet to do your crypto transactions. There are several cryptocurrencies with extensive integrated privacy and anonymity features, such as Monero or Zcash.