What is a Bitcoin Mixer

Governments of powerful countries are no stranger to speculations of mass surveillance, one of which is the United States. Back in 2013, a US whistleblower, Edward Snowden, revealed to the world that the US National Security Agency had a program that could access any movement of money internationally. Dubbed "Follow The Money," this program enables the US government to invade the privacy of regular users in any particular area in the world in order to track down terrorist organizations' illegal funding activities. This type of program, though extremely useful in its said purpose, basically serves like a giant panopticon that oversees everything that happens in the financial world, gazing upon those oblivious enough to how their money is being passed down across the world. It is of no surprise, then, that people would eventually take their financial matters away from the watchful eyes of the government. That is where the anonymity of cryptocurrency and blockchain technology comes in.

Since its early development, blockchain technology promised a more secure movement of data and currency because of how its encryption is structured. Cryptocurrencies offer a handful of services that many traditional banks cannot do, such as the full transparency of the movement of money that assures the user of its accurate tracking, as well as the cheap and time-efficient process of money transfer. Most banks operate on a time basis because of their obviously limited resources. Cryptocurrency, on the other hand, does not operate the same way since it can be accessed by the public 24 hours a day, 7 days a week.

While cryptocurrency being a convenient method of banking is no doubt an irrefutable fact, security and anonymity is another thing to consider. Over the course of its development, blockchain technology naturally showed its fair share of paradoxes in its system, one being the fact that it boasts its ability to encrypt and lock transaction information, but at the same time available to the public eye in order to fulfill the vision of full transparency. The address, which is a series of numbers and letters, used in transactions can be seen and traced by the public once the transaction is confirmed by miners and stored in the blockchain's gigantic database.

The full transparency, in turn, forced people to find ways to add layers of security to their transactions in order for their wallets to be difficult to trace. This is first mentioned in the original whitepaper of Bitcoin, explicitly encouraging its users to change addresses in each transaction they do, be it selling, buying, or exchanging coins. Over time, people have begun to adapt to this idea by creating and developing platforms that offer privacy services to enhance anonymity. One of which is Bitcoin Mixer, one of the most basic mixers out there that is comprehensive and easy to use. Most mixers offer the users an option to decide the desired mixing time. The concept is simple: the longer the user is willing to wait, the higher the chance of the transaction being highly anonymous. Bitcoin Mixer not only does this service for one cryptocurrency, but other popular ones as well like ETH and LTC.

Despite the anonymity promised by cryptocurrency services, a user’s financial activity may be sourced from the blockchain for so long as someone has a link to their wallet address. The added layer of security may ward off the threat, but it does not eliminate the risks. To keep their crypto finances anonymous, users need Unijoin, a cryptocurrency service that requires no logs so there is nothing the hackers can link to.

Main Mixer Options

There have been a number of different approaches to the mixer technology, but there are currently two most popular ones that are being used widely by people who generally do transactions using cryptocurrency. First is the centralized mixer. They are usually characterized by accepting Bitcoin as payment, and returning different types of coins to the user, making it almost impossible to tie together that the money came from one identity. However, there are still some disadvantages to this type of mixer. As the name suggests, it requires that the user trusts the mixer to hold his or her money and the fact that the mixer knows who exactly sent and received the money, making it still a risk to keep in mind if one is really concerned about revealing their identity. Another disadvantage is the fact that the mixer could be a scam, essentially stealing the user's money. This has happened to a number of people already, and there is apparently nothing that the user can do about it since cryptocurrencies are still largely unregulated and authorities deemed it difficult to oversee.

Chauman CoinJoin, on the other hand, claims to have solved both of the problems stated previously. It works by allowing users to pool together their coins, but only with the exact amount of that particular coin. For example, if 150 users decide to merge 0.002 of their Bitcoin together in an address that they control to do one big transaction, everyone can still take control of each of their 0.002 BTC, since the values are all the same. The mixer is also designed in a way that there's no way it can steal the users' money because it's not built to identify which coin went where, making the transaction truly discreet. Probably the only drawback that this method has is that it requires the cooperative efforts of a lot of people in order to work, because the bottomline is that the more people are pooling together their money, the more secure the transaction is. This confirms that mixers like Chauman CoinJoin and CoinSwap are some of the best options for people seeking privacy, since there is no need for real world information to be revealed to other people during the mixing process, making it safer for privacy-oriented users.

Coin mixing may offer users the privacy they need, but most users find the process complex. Users would benefit most to seek a cryptocurrency service that offers coin mixing that is simple to understand, allowing for an optimum mix and guaranteed anonymity -- exactly what Unijoin has to offer.

Legality

While coin mixing in and of itself is harmless, there's no denying that some unsavory people use it for their illicit activities. This is one of the reasons why powerful governments seek a way to regulate the market of digital currency in general in order to reduce and/or prevent crimes. However, there are a handful of ways that are totally understandable to make use of coin mixing out of necessity, such as when one wealthy Bitcoin user is being careful of the public knowing how much wealth he or she has in their wallet. It's always a good option at this point to be safe from being a target of kidnapping or robbery. Another example would be when someone is under an oppressive government that is actively monitoring its citizens' activities online. The user has to be more careful, knowing that it's something as important as money that's being moved and spent on things that they might get in trouble for.

As one would expect, there are still examples of Bitcoin mixing being banned and discouraged, like when Dutch authorities famously proceeded to shut down a mixing platform called Bestmixer due to its alleged money laundering violations. This instance is an extremely difficult conflict. After all, privacy is one of the most basic human rights, as stated in Article 12 of the Universal Declaration of Human Rights by the United Nations. It still can't be denied that criminals benefit from this basic human right, among other things. The bottomline is that there is practically an endless number of uses of privacy tools, and criminality is only one of them. It does not represent the majority of people who use coin mixing as a tool simply for privacy. As a matter of fact, a research by Chainalysis showed that only a very small amount of activities in the entirety of coin mixing is done for illegal activities. To be more specific, only 8.1 percent of all mixed coins were identified to be of stolen origin, but only 2.7 percent of all coins have been used in the darknet markets. Chainalysis researchers then were able to clearly paint a narrative that most people who use coin mixing really just want their transactions to stay safe and private.

Conclusion

Even when coin mixing is done, it shouldn't be treated as something that guarantees a user's privacy, because cryptocurrencies like Bitcoin and Ethereum are extremely popular, making it easier for outsiders to do what is called "Blockchain analysis." This is the process of clustering and cross referencing together addresses and chunks of information leakages from transactions in order to paint a bigger picture within the blockchain, ultimately keeping a large amount of information about a user's real world identity. It's an impressive and complex move to do that requires a lot of effort and IT expertise, but it is nevertheless possible. With this in mind, blockchain analysis is mostly done by entities with a lot of resources at their disposal. One prime example of this is how the FBI were able to find and trace the address of the traffic in Silk Road and launched a DdoS attack. The same thing happened when authorities managed to discover a link between Bitcoin money transfer and Fancy Bear, a large Russian cyber espionage group that was suspected to be responsible for a handful of large-scale hacking and illegal activities that support the interests of the Russian government. The campaign of French presidential candidate, Emmanuel Macron, for example, was claimed to be supported by the said group.

Coin mixing, like any other form of privacy tools in the real world, is an essential part of what makes a society work towards progress. It should come as no surprise to say that at this point in time, cryptocurrency is still in its early stages, since the inevitable transparency of blockchain technology makes it harder for people to maintain their privacy. Digital currency is yet to be adopted into our everyday lives, since cash is still the go-to mode of payment for goods and services for most people in the world.