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What is the working principle of a bitcoin mixer?

The decentralization and anonymity are the main characteristics that distinguish cryptocurrency from fiduciary (Fiat, real) money. However some of the arbitrariness of these distinctions. Information about transactions with the digital currency are stored and displayed in the registry of the blockchain, so you can track how moved each monetary unit to the place of their storage. So widespread today purchased programs and services designed to track the transactions that occur in the system.

Even if you do not violate the law, is to ensure that payments were anonymous. We all want to protect themselves, but absolutely impossible to achieve this if anybody, having basic knowledge in blockchain has the ability to trace other people’s transactions and to know someone somewhere puts their money that pays for and how to withdraw funds. It is obvious that the public service can fully control our operations. Conclusion greater privacy calculations of Fiat money compared to the infamous anonymity of bitcoin.

What is a bitcoin mixer?

Many users were misled by the supposed anonymity of bitcoin. A number of participants of system uses bloccano for the purpose of receiving payments of questionable legality or evasion of tax liabilities. But even law-abiding users who make legitimate transactions that should take care of their of anonymity, because when you have a basic knowledge about the technology of the blockchain, any other member of the system can easily obtain information about transfer your balance, places of storage of means and ways of a conclusion. Such transparency makes the user an attractive target for attackers and Supervisory authorities. But there is a possibility to complicate their transaction monitoring. For this purpose many techniques and specially designed services, called bitcoin mixers, allowing “diversion”

Bitcoin mixer is an anonymization service, by which the tracing produced in the blockchain the transaction is impossible due to their division into small amounts that are moved repeatedly in different locations.
A user makes a coin mixer, making one transaction, and are displayed with other coins, passing many transactions between different tokens, so you can link them to a particular member of the system is not possible.

The principle of operation of the bitcoin mixer

Centralized bitcoin mixer provides anonymization of transactions through the mixing of all completed user operations. The system conducts the transaction with their funds, pays the appropriate Commission and receives the same amount, but in other coins.

In the process of mixing the funds they are divided into small amounts, then they are randomly distributed on the wallets that have created the service. These transactions are repeated dozens of times, and only after doing so you are sending the coins to the address specified by the user. It is essential that such a service was protected from a technical point of view and secure, because when mixed this way there is a risk of theft, which can make developers. In addition, at low technical security system can be hacked. It is also impossible to exclude the risk that the service keeps a record of the transaction.

With regard to the payment of funds through a bitcoin mixer, it is produced by the formation of a random number of coins required amount in a random order.

What is the need of using mixer?

You can often face a point of view on bitcoin mixers as a tool necessary only to criminals. Of course, to cover up the illegal operations without mixing coins is not enough. However, for law-abiding users for a number of reasons it may be important to hide their operations and assets.

For a start it is worth mention that bitcoin is very useful as a means of payment for purchases and settlements between private parties (so-called p2p payments). Operations with cryptocurrency are not displayed in the banking registers are not visible to other financial institutions. Therefore bitcoin is an anonymous (supposedly) means of payment. However, all transactions in the Bitcoin network are entered in a public registry, and in this database there are data about any transactions that were ever held. Thus, paying for goods or services using bitcoin, you can’t count on absolute anonymity. The third party is able to track what actions you make in the system and to analyze your behavior. All contractors, conclude ever smart contracts, a well-known number of your purse, and they can keep track of how much funds in the account and which movements occur. In such circumstances, neither of which security may not be considered. The attacker has every chance of you to steal.

Use bitcoin mixer allows you to effectively “confuse the issue” and to create a reliable barrier to monitor the movements of your bitcoins from the too prying eyes. And no matter legal or not your operations with cryptocurrency. For your own peace of mind it is better to limit a circle of people who know the address of your wallet, the amount of funds on it and conducted operations on them.

When you need to mix bitcoins?

Every time you need to send or receive coins from a new source, you need to mix them. So may be more likely to remain anonymous.
For example, when you first purchase crypto-currencies for real money, is to mix them before you commit to further transactions. This will allow to complicate the relation between your assets and you. Mixing bitcoins should be in the reverse operations, that is, when selling them for Fiat money. The buyer will not be able to trace from what source did the funds if they are mixed.

Abandoning the use of mixers, you agree to allow any who owns the minimum skills and abilities, find out where you purchased your cryptocurrency assets and where the transfer bitcoins. Such information can be used to identify you and harm, in particular, by theft of funds.

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