How the Bitcoin Mixer works. What principles are used in the work

Tools that allow you to work with cryptocurrency are gaining more and more popularity. This is due to the number of users of digital assets, with their number increasing every day. Interest in anonymous Bitcoin will continue to grow because it is a new technology in the world of finance. Although the digital currency was created in 2009, it is still considered something new and unusual. What to talk about if the stock market, in its classic form, is already more than 100 years old, but for a huge number of the world’s population this topic remains untouched. Therefore, bitcoin for a very long time will be considered a breakthrough technology in the world of finance, the popularity of which will grow for many years to come. 

Together with Bitcoin, services, and tools have appeared that complement this financial technology. One of them is Crypto mixer, which allows you to buy anonymous bitcoin. And if many people do not even have an idea of how Bitcoin works and is organized, imagine how few people there are who do not know what a crypto mixer is, and even more so how the principle of its work is organized.

What a Bitcoin mixer is and what it is for

Bitcoin is an anonymous digital currency. This is a common belief, but it’s not entirely accurate. Bitcoin can indeed be considered anonymous, but this anonymity can also be “unraveled”, which is what led to the emergence of cryptocurrency tumblers.

A crypto tumbler is a tool to obfuscate the chain of the public ledger, the blockchain. It increases the anonymity of the person using Bitcoin. A cryptocurrency tumbler makes it possible to purchase anonymous Bitcoin and makes it virtually impossible to track transactions. 

This tool can be used in completely different areas. Bitcoin transactions are not tied to personal data, but that doesn’t make them completely anonymous: anyone who knows your wallet address can view all transactions and follow you. Sometimes, using a bank card can be a more private endeavor. Knowing this fact, making purchases without using a crypto mixer is no longer very desirable.

Therefore, it is worthwhile to understand how a cryptocurrency tumbler works and how different services can differ from each other.

How a bitcoin mixer works. Are they all the same 

When working with this or that service, it is always important to know how it works. This will allow you to better choose the crypto tumbler that you will use to increase the anonymity of Bitcoin and not run into scammers.

Bitcoin mixers can be divided into several categories: 

Centralized – these are services where the user relies on a single hub, i.e. a company. You simply transfer your assets to a designated address where the process of anonymizing your coins takes place, for which the company charges a fee. This can pose privacy and security risks as there is potential for abuse or hacker attacks. It was with centralized services that the development of mixers began. 

Decentralized mixers – typically based on decentralized networks where management and control are distributed across multiple nodes or participants. They seek to provide higher levels of privacy and security by distributing mixing processes among different nodes in the network, reducing the risks of centralization and single points of failure. Mixers in this category allow users to directly transact with each other using CoinSwap or, for example, CoinJoin protocols. The CoinJoin process depends on a large group of users interacting with each other and acting simultaneously. The essence of CoinJoin is to combine the funds of multiple users into a single transaction.

Smart contract mixers – use smart contract technology that is programmed to automate the transaction mixing process without the need to trust a central party. The goal of these mixers is to provide security and privacy by utilizing autonomous smart contracts where the mixing process occurs at the protocol level without the need to trust a third party.

The process of mixing coins and entangling records in the blockchain is the same, the only difference is which pool will be used when mixing your coins. But the point is the same – to get anonymous bitcoins. When you use it, you can customize the process by choosing different inputs: delay time, using multiple output addresses, and so on.

All services differ in the amount of commission charged. However, their size can vary in the tool itself. It depends on the parameters you customize and the anonymity rating you want to get at the output.

Choosing the best crypto mixer depends on the preferences of the user. It is important to consider the reputation of the service, the fees charged, and the technology it uses when mixing coins. A Bitcoin mixer is a good tool for anonymizing cryptocurrency that will allow you to keep your transactions private.