Unfortunately, you have probably heard the name of Coin Mixer in a negative way. In one of the many hacks that crypto exchanges have suffered throughout history. Without knowing what they are, or how it really works. That is why, in CriptoTendencia we bring you a summary of this technology not necessarily used for evil.
What is a Coin Mixer?
A Coin Mixer, or in Spanish a coin mixer; It is essentially a means to make crypto transactions more anonymous. With certain types of crypto assets that leave a public trail, as is the case with Bitcoin (BTC).
The crypto users who wish to have much higher levels of privacy and anonymity; They often use these platforms to achieve that task.
As we can see, so far they are not necessarily used for the sole purpose of committing felonies. But, again, the ideology of the decentralized, and non-censorship plays a bad play for all of us equally.
Since anyone can use these services, from an ordinary person who enjoys hodl their cryptos without anyone knowing; like the one who commits a crime of cryptocurrency theft; and wants to fade his crime before everyone’s eyes.
How do they work?
Coin Mixers work by obscuring as much as possible the traces of origin of such transactions. By using hundreds and hundreds of micro transactions, which makes them almost impossible to track.
Crypto mixers work due to the existence of multiple cryptocurrency hodlers for the same purpose; make your transactions more anonymous; It doesn’t matter why.
For example, let’s put the case of Bitcoin. The hodlers will deposit these “trackable” tokens in a central account. Then they mix with all other users at this address. In the end, the amount deposited by any user is returned in a wallet of their choice. Of course, less the cost of the service, and the transfer costs of the BTC Blockchain network.
Because the original owner of these tokens receives completely different cryptocurrencies from those originally deposited; The ties between the tokens and your personal information become very difficult to track.
It is almost impossible to track the BTC to the original owner, but beware, almost impossible. We know of cases where it has been possible to identify the criminals who have used the coin mixer.
Speaking of service costs, these services usually keep 1 to 3% of the total tokens that have to be mixed.
There are a number of companies that offer coin mixing services. These companies include Coinmixer.se, Helix and Bitcoin Blender. If you are interested in mixing your cryptocurrencies to increase your privacy, you can consider one of these options.
Pros and Cons of a Coin Mixer
One of the main advantages of these services is that it prevents hodlers with large movements from becoming victims of hacking.
If you are someone who frequently places many transactions with large amounts of money, then the mixers could save you from a bad time.
Another pro, is that if you are in a country where the government is authoritarian and it wants to take control of all private property, or even if you fear for your safety just for being part of the crypto ecosystem.
Currency mixers can make it even more difficult for governments to interfere with the daily life of the cryptoverse.
Create money that is beyond the intrusion of government noses; It is another concept that many people believe is essential to boost the energy behind the cryptocurrency phenomenon.
Of course, nothing is perfect in this world, the biggest disadvantage of the coin mixer is that it potentially makes it easier for criminals to launder their money and hide their activities. Thanks to you also use these services. So you could own some% of contaminated or stolen crypts, and you are most likely not aware.
This can make it difficult for law enforcement agencies to track and trap; to these crypto hackers. However, due to the increasing use of cryptocurrencies, regulatory agencies are likely to discover ways to improve the search for criminals who use cryptocurrencies for transactions.
Caution when using these services
In CriptoTendencia we want to warn that because the service requires that you send your tokens to the platform that says to make the mix. We recommend making sure you send it to an accredited Coin Mixer company; and with a good reputation in the crypto ecosystem. Otherwise, it could be stripped of its hodlers very easily.
Economics student of the UCV. Defender of individual freedoms and of course also of the market and cryptocurrencies.