The closest you can get to money laundering in the world of Bitcoin are the mixers (also called Bitcoin tumblers or Bitcoin Shufflers). Bitcoin mixers are services that are used to mix the funds of one person with those of others. The intention? To confuse the flow of that money and lose track of it. Even in the open data world of cryptocurrencies, many users want to ensure their anonymity and, therefore, resort to the same thing that bankers have been doing for decades: sending their money to the Cayman Islands and the Bahamas so that it remains off the record.
What Is Bitcoin Mixing?
Bitcoin mixing is regarded as the process of allowing the users to mix their crypto coins, Bitcoin in this case, with the other users in a pool of funds. In this way, the coins will be anonymized again, and it will not have its last trail. Instead, it will create a new route at the mixer. After mixing the Bitcoins, the user is able to obscure the link between their real-life identities and their Bitcoin addresses. It further aids in making the transactions private and easier.
The Process – How Bitcoin Mixer Works?
When it comes to cryptocurrencies, there are individual variations like traditional money laundering. In the first place, money “does not go somewhere” but is agglomerated with the funds of others; it is crossed; it is changed. This is enough to make it difficult to trace, even through the blockchain.
In essence, when bitcoins are mixed in the Bitcoin tumbling services, the user is sending his money to an anonymous service that will then respond by sending him the same amount but composed of cryptocurrencies that belonged to other users. In this way, the coins of user A can be traced back to user B and the currencies of the latter can be traced back to user A. The number of users involved in the operation of the cryptocurrency mixing services increases, and the result is that following the path to everyone’s money will become impossible.
Some History on Bitcoin Mixers
Now that we know the process of bitcoin mixing services, it won’t be strange to know that the Bitcoin mixers were widely used on sites like Silk Road, an online black market operated from the deep Internet, which can be accessed through Tor.
The market was closed in 2013, following the FBI’s arrest of its creator, although some similar portals have emerged. In all of these, to register as a selling user, you must pay an amount in bitcoins. To do this anonymously, it is necessary to use Bitcoin mixer services. This also applied to sites dedicated to the sale of contraband products such as SheepMarket and The Black Market Reloaded. Notorious was the case involving the first, which vanished 100 million bitcoins after its closure.
Elliptic’s website section, Law Enforcement, has an application where bitcoins can be tracked. This makes clear the connection between the old Silk Road portal and Bitcoin blender services such as Bitcoin Fog, which is one of the oldest crypto mixer.
Many sites offer the Bitcoin mixer service, such as BitLaunder (which calls itself the perfect Bitcoin mixer), Bitcoin Fog, and Helix by Grams. Most of these sites have visible links on the average web (which we access through search engines such as Google or Bing) and “reference points,” but to carry out a mix of bitcoins is necessary to use the Deep web.
It is there, in that space unknown to many, that transactions take place. The reason is obvious. A site that is washing large amounts of bitcoins can not have a public domain that Google throws as a search result.
That’s why Tor becomes a valuable alley for those who need to wash their bitcoins. Tor is a specialized browser to access the dark web and deep web websites that have the power to ensure the anonymity of the individual performing the search. With it, the user is free to explore the deepest and darkest parts of the internet without being identified. This makes it an ideal medium for accessing any Bitcoin mixer service.
The Bitcoin Portfolios
In addition to using Tor as the most widely used browser, users tend to create several bitcoin portfolios both on the web and through Tor. The former can be created in the Blockchain.info service and would be the public, “legal” wallets with which the user could buy bitcoins on highly researched sites such as Coinbase. On the other hand, the second ones would be those portfolios that nobody can know who their real owner is and they are created frequently in Deep Internet sites.
How does this help? Because if you have more than one portfolio, the user can transfer the Bitcoins to himself from one to another and then proceed to send the money to the server that will make the Bitcoin mixing. The reason for this is to make tracking even more difficult and, moreover, it is a data recovery mechanism, in case the user loses the password to access his original portfolio.
Legality and Reliability
According to the bitcoin wiki– mixing large amounts of money in the cryptocurrency tumbler can be classified as illegal because it would violate the anti-structuring laws.
As for reliability, it is fair to say that there may be risks associated with a reliable Bitcoin mixer. After all, the user is transferring his money to a hidden server that might well not give him the agreed bitcoins in return.
How To Mix Bitcoins: A Step-By-Step Guide
Mixing the bitcoins and making a transaction on the Tor network is very simple if you follow the below-mentioned steps as stated:
- Create a Bitcoin (BTC) wallet, say wallet-1.
- But some Bitcoins and then transfer the coins to your wallet-1.
- Create a Bitcoin wallet on the Tor network, say wallet-2.
- Create another BTC wallet on the Tor network, wallet-3.
- Choose a Bitcoin mixer service and set up a transaction on the platform using the address from wallet-3. It is always recommended that you implement multiple wallet addresses for setting up random time delays.
Note: Make sure that you are utilizing the correct .onion links of the wallets and the bitcoin tumblers for the process.
- Now, from wallet-2, send the funds to the address you received from the BTC mixer’s platform over the Tor.
- Once you are done mixing the funds, restart Tor browser and then send the coins to their destination.
Why Is Bitcoin Mixing Important?
It is a common thing heard that anonymity is necessary for the criminals while transacting in Bitcoins. But this is entirely untrue. The fact is everyone who carries on Bitcoin transactions is required to protect their privacy due to a fundamental human right. Here are two of the many reasons that prove the necessity of mixing your Bitcoins.
- Dodging Some Real-Life Threats
Real-life threats are also associated with bitcoin transactions that are not anonymous. It is possible to have access to your transaction history through the blockchain network while the criminals will also be able to see your behavior. This is even more concerning.
Here are two of the common incidences possible if the criminals can see your activity on the blockchain network:
- Say, you have 50 Bitcoins in your wallet. In fiat currency, it roughly accounts to $1,95,4605. As the criminals can see your activity on the blockchain network, they would know the exact amount of money or funds you have stored in your wallet. Then they may plan to go after you. They may track the details about you through the blockchain network and probably then can find your real-life identity. After they figured this out, they might execute a plan to blackmail you or kidnap you for your funds. And they would take the risk because by this time they have already known that you have a lot of money in your account.
- Another possibility is that they might not execute the first instance. Instead, they might send you a phishing email that seemed so trustworthy that you bought it. The hackers are capable of sending your device-specific malware that may steal all the funds of your BTC wallet. In this situation, you will not be harmed physically, but you will definitely lose your funds.
It may seem that these situations are entirely hypothetical. But they are not. Both of these examples have occurred in real life, and the people have literally been victimized as their transaction history is readily available in the blockchain network.
- Preventing The Third-Parties From Snooping Into Your Economic Behavior
It is a known fact that several third parties, including the intrusive businesses and the advertising firms, are pretty keen on analyzing people’s purchase behavior for various advertising requirements. If you are not mixing up your coins, the third parties will be able to see the actual amount you spent, the source from where you have consumed them and how much bitcoin you have in your wallet(s).
Top 5 Best Bitcoin Mixing Services In 2021
Currently, there are several Bitcoin shufflers widely available for use. But, the user must consider some of the well known factors before they choose one of the best Bitcoin mixers and tumblers 2021.
The first and the most important is the type of coin you are using and the source of the funds. If the funds are clean, then mixing bitcoins would be pointless. This is because there is no scope of suspicions raised.
On the contrary, if you are a darknet market user and operates on specific sites, you need to figure out if the marketplace you are using possesses an in-built bitcoin tumbling service. Additionally, you can also check if the website recommends any of the outside coin mixing services. If you find there is not any, then it is completely your choice to research for staying safe in future.
Here are the best 5 bitcoin blenders you can completely trust in 2021.
BitMix.biz is a cryptocurrency mixing service that keeps your cryptocurrency safe. What the platform does is, it collects your Bitcoin, mixes it with the other deposits and in return, provides you the same amount of Bitcoin. It deducts a smaller fee amount as its commission. It has been designed to lower the bitcoin tracking, cleans up your coins and ensures anonymity on the transparent network of bitcoin.
BitMix.biz offers you a letter of guarantee, which is a proof of obligation of the platform. It also uses a special 12 symbol code that assures you receive your bitcoin back every time you are in use of the service. You need to save that code as it 100% excludes you from getting your own coins whenever you want in the future.
The platform offers complete anonymity, instant transfer and partner programs. BitMix.biz charges a mining fee of 0.4%-4%. You can also opt to set the fee manually while you are mixing your Bitcoins. It has set an address fee of 0.0005 BTC against each output address for covering any transaction fees that are charged by the miners.
The mixing process in the Bitcoin blender consumes up to 24 hours. However, most of the time it is almost instant. But it also depends on the current service load. At the minimum, you have to mix 0.007 BTC while the maximum limit goes to 1000 BTC. All the transactions outside this range are not accepted.
Blender.io possesses a Bitcoin reserve of its very own. You can consider it as a chain of Bitcoins. When you send your funds to Blender.io, it transfers your coins to the end of the chain and returns you new, fresh and unlinked coins from the starting of the chain.
Thus, there is no link between the coins that goes in and comes out. The public ledger will only be able to trace the coins that are going from your wallet to Blender.io’s address but no further.
The platform does not ask you to register, signup or submit any kind of detail other than the “receiving address”. That is the sole thing it requires and it feels there cannot be any better form of anonymity.
As you do not let out your personal details, there is absolutely no way that your identity gets compromised. It can not be linked back to you as well as the platform does not recognize you.
Blender is one of the best tumblers. Most of the Bitcoin tumblers offer 3-4 delay sets. It permits you to add at the maximum 8 new addresses for every transaction, while most other tumblers allow no more than five addresses only.
Considering the simplicity of a Crypto blender, CryptoMixer is one. It is also a trustworthy Bitcoin Tumbler service. One of the basic differences that it has compared to the other platforms on this particular list is that it can create room for really large transaction volume.
They did not levy the maximum transaction limit while the minimum is set to 0.001 BTC. They consider any amount as donation if it goes below the stated minimum threshold and they do not send back the amount to the sender.
The lowest transaction fee allotted is 0.5% having an additional 0.0005 BTC against every deposit.
You can also go ahead and set a custom fee for the added anonymity. The platform also provides a letter of guarantee.
MixTum.io is a prominent Bitcoin mixing service that offers privacy by utilizing the algorithm of Bitcoin Mixer 2.0 for shuffling the bitcoins. The other similar tumbling services mixes your funds with the funds of the other users. But in this platform, an user’s crypto coins are mixed with his bought crypto coins from the cryptocurrency stock exchanges.
The platform verifies the freshly purchased coins with a scoring system taking the help of the innovative algorithms and outdo with the technologies such as cluster analysis, volume analysis and taint analysis etc.
It implies that you would receive your BTC back and split into random parts, even if they are at different addresses. Simultaneously, your privacy is protected as nothing is connected to your real identity. Your request takes up to 6 hours.
No registration is required and no logs are stored. All transactions are signed digitally with the letters of guarantee, which you can check on the website at any point. You can avail their technical support 24/7.
They charge you a fee of 5% from your transactions as well as 0.00015 BTC as network fee.
Both Clearnet and Tor versions are available.
BitCloak is a budding bitcoin tumbler that began its operation back in 2019. It offers two services – mix Bitcoins or pay anonymously through this service utilizing the clean coins. The website does not require you to signup or register on the platform. The platform is very user-friendly and simple to operate. You can at a time mix up to 100 BTC and you can specify the delay time as well. You will be provided with a PGP proof to download and a Mixer ID that you need to remember or note down. A small amount is extracted from it as a fee. You are required to provide at least one confirmation in order to complete the transaction. You can check for a mix by entering the ID. The mixer addresses have an expiration time of 24 hours and an additional delay time. Thus, in a day, all the information of the completed coin mixing gets deleted from the platform.
Is Bitcoin Mixing Meant Only For The Criminals?
Privacy and Bitcoin mixing is not only for the criminals. Instead, privacy is a fundamental human right and has been established under the Universal Declaration of Human Rights (as in Article 12).
It is a fact that the criminals are obviously benefitted from all the privacy that has been opened up. This even includes the privacy that is acquired through the mixing up of their coins. Criminals enjoy various freedoms that the others are also allotted.
The notion that the cryptocurrency mixers are solely used by the criminals is absolutely untrue. A research conducted by Chainalysis mentions that crypto tumblers and mixers are mostly used by the regular Bitcoin or cryptocurrency users, who are concerned about their privacy.
Can Bitcoin Mixers Get Banned?
It is really a legal question whether the Bitcoin mixers or BTC blenders can be banned. Therefore, it will differ from one jurisdiction to another. Quite a handful of the crypto mixer ban is a prominent example, that the authorities have claimed to be in use for money laundering. However, many coin mixing services still operate with dignity.
In case the centralized mixing services ever face bans and shutdowns, then the decentralized mixing services will probably take its place. If this happens, it would be harder to even take them down.
Are Mixed Coins Labelled as ‘Tainted’?
Whether a set of mixed coins is labelled as ‘tainted’ depends on how the coins are mixed. Bitcoin mixers such as the Wasabi Wallet leaves a prominent trail of mixing. The mixed history of the coins can be termed as obscured but the mixing itself is not referred to as such.
While writing this article, none of the mixed coins have been termed as ‘tainted’ and refused by any of the bitcoin exchanges or the merchants.
Is Bitcoin Tumbling Safe?
As other services run on the internet, Bitcoin tumbling can also have associated risks. For example, the majority of the law enforcement agencies work against the Bitcoin tumbling services as there is a view that they are facilitating the transactions of criminal funds. This notion is not entirely correct as most of the tumblers are utilized for the lawful activities as well.
It needs to be noted that before you settle for a tumbler, you must always ascertain if its operation is legitimate. This way you can avoid the loss of the hard-earned coins to the fraudsters.
Is Bitcoin Tumbling Legal?
It is an undeniable fact that tumbling your cryptos can be a very useful tool for someone who would like to launder the illegally obtained tokens. However, tumbling your Bitcoins to clean its origins is a good idea in fact. There are no specific laws restricting the tumbling of Bitcoins or other cryptocurrencies.
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