Save 23% ($351) & Get a Free 1-1 Call with our Team ⏰ : 0d 2h 59m 43s
Bitcoin Mixing: The Pros & Cons Explained
Regulatory bodies and conservative people tend to look at cryptocurrencies as a way to fuel criminal activity and launder money. Those with a little more knowledge about how blockchain technology functions, know that all transactions are recorded on the blockchain and, in most cases (privacy coins are an exception), can be viewed by anyone. Which, in theory, makes it harder for money launderers to use than cash. At the same time, this also creates a privacy issue, as anyone who knows your wallet address can know how much capital you own and every transaction you’ve made.
Cryptocurrency tumbling is a way to keep you anonymous, especially with the Bitcoin’s open network; for this asset it is a called a Bitcoin mixer service, such as the one offered by BitcoinMix.org. These types of services can safeguard your privacy, as how much capital one owns tends to be a rather sensitive piece of information. As you sign up to an exchange, you are likely to undergo a KYC application which will link your wallet address to your identity, this information can be accessed by blockchain analysis companies but could also be used by bad players.
Another facet Bitcoin mixing can protect against is hacking. A type of attack is called “Dusting Attack” where scammers will send very small amounts to addresses (a few hundred satoshis) that usually go unsuspected by most users, they’ll then try to de-anonymise the wallet. Once the identity of the person or company is identified, they’ll resort to extortion. Much worse, people have been kidnapped and even murdered because of their digital assets.
This is an issue very rarely talked about by the crypto-community but definitely needs to be addressed. Lack of privacy can lead to very serious problems, which in the case of Bitcoin can be used with BitcoinMix.org. Unfortunately, these same cryptocurrency tumbling services are exploited by those carrying illicit activities. In fact, the Binance hackers used chipmixer.com, a tumbler service, to try and funnel $80 million under the radar. Luckily blockchain analysis companies potentially have the ability to detect at least a portion of the funds just like Clain is attempting to do for the Binance hack.
Recommended from Cryptonary
