Сrypto mixing services provided to hide the source of potentially identifiable or “corrupted” cryptocurrency funds by mixing them with other means.
The essence of the process is to combine the source funds from different sources for a long and random period of time, and then send them back to the destination address. Due to the mixing of all funds and their random distribution, it becomes very difficult to trace the exact origin of these funds.
In addition, the transaction amount in the mixers is randomly selected, so one transaction may consist of several small partial payments made over a long time. Mixing services are most often charged a commission ranging from 0.25% to 3% of the total amount. There are several types of mixers:
What are the risks associated with crypto mixing?
- Centralized mixers: these services accept cryptocurrency and return various parts of it for a certain fee. They are also called “tumblers”.
- Decentralized mixers: in this case, a large group of users pool their cryptocurrency funds and redistribute them in such a way that each participant receives one new piece of cryptocurrency.
- Hide-based mixers: these mixers use various methods to hide user transaction schedules.
- Zero-knowledge mixers: Such services completely erase the transaction schedule, relying on advanced cryptographic methods, such as zero-knowledge proofs.
Can crypto mixing protect your identity online?
Some popular mixers include Tornado Cash, Wasabi Wallet, Hey Bitcoin Mixers, Shredder, CoinJoin and Samourai Wallet.
Although in many countries there are no specific laws or regulations prohibiting the use of coin mixers, the increased anonymity of their operations makes them suspicious among the authorities associated with the fight against money laundering. As a result, mixers are often associated with illegal operations.
However, there are disadvantages when using mixers. In order to use the mixer successfully, it is necessary to follow certain rules, otherwise its actions can be analyzed and the corresponding transactions can be decrypted. In addition, the uncontrolled use of mixers can become a tool for criminal activity. Trust in the coin receiver is very important, otherwise you can become a victim of fraud or theft. And by using a centralized mixer, you risk losing confidentiality, since the owner of the service will know which users deposited funds and which coins were delivered to them.
However, the mixer also has advantages. Mixing services such as Coin Mixer offer a high degree of privacy, reducing the risks of extortion, hacking and asset theft for companies and holders of large amounts of cryptocurrency. They also allow you to avoid tracking and control by organizations and governments, while maintaining the confidentiality and anonymity of your transactions.