As the demand for cryptocurrency anonymity rises, regulators have begun to crack down on crypto mixers for their potential role in money laundering. However, over-regulation could stifle innovation in the industry.
A Bitcoin mixer is a service that improves the privacy of Bitcoin transactions by pooling and pseudo-randomly shuffling coins from multiple users. This makes it harder for on-chain analysis to link source and destination addresses.
Coinomize
Coinomize is a bitcoin mixer that provides users with the opportunity to hide their cryptocurrency transactions from prying eyes. It works by shuffling your bitcoin with other coins in a black box, so that public blockchain explorers can’t identify your original transaction. This helps protect people who live under oppressive regimes, as well as those who want to use their cryptocurrencies anonymously.
Coinomize offers a number of features to enhance its users’ privacy, including customizable mixing options and real-time updates during the process. It also does not keep any logs of user information, and it automatically deletes its own records within 72 hours. It also allows users to delete their orders manually if they wish.
To use Coinomize, simply choose a deposit address and select the amount of bitcoin you wish to mix. Next, set your desired transfer delay and service fee. The mixer will then send the mixed funds back to your original deposit address.
JoinMarket
JoinMarket is an open-source Bitcoin privacy tool that uses CoinJoin to improve the fungibility and privacy of bitcoin transactions. It works by combining inputs from multiple users into a single transaction. This means that it cannot be determined which output maps to which inputs, making the transaction more private.
To use JoinMarket, you must install the Bitcoin Core wallet and have a working internet connection. You can also run it on a full node solution such as RaspiBlitz or Wasabi, which include it as part of their software.
To make the process of joining a transaction more secure, JoinMarket uses a method called “fidelity bonds.” These are bits of value that are sacrificed to make a Sybil attack more expensive. The more fidelity bonds that a user publishes, the higher their chance of being chosen by other users for coinjoins. While JoinMarket isn’t as user-friendly as some of its competitors, developers are working to improve its ease of use. A new UI is in the works that will massively increase its functionality.
CoinJoin
CoinJoin is a privacy-enhancing protocol that hides the relationship between transaction inputs and outputs. This improves security in a digital environment where sensitive financial information is increasingly vulnerable to exposure. It also helps preserve business confidentiality and prevents competitors from accessing confidential data. CoinJoin is available on a number of platforms and digital wallets. Popular implementations include Joinmarket and the Wasabi Wallet. Unlike Zerocoin, which is complex and requires a hard fork, CoinJoin is easy to use and has been proven effective.
The Wasabi Wallet CoinJoin feature works by combining multiple Bitcoin transactions into one large one. Suppose Alice and Bob each want to send 1 Bitcoin. Normally, their transactions would be separate and traceable on the blockchain. With CoinJoin, they can combine their transactions into one large transaction with three inputs and two outputs. This makes it more difficult to link the inputs and outputs and enhances Bitcoin fungibility. It also protects against blockchain surveillance and other attacks on transaction privacy.
CryptoMixer
CryptoMixer is a unique Bitcoin mixer service that uses special algorithms to shuffle the coins sent by users and then sends them to different addresses. The resulting coins are not linked to the original wallet and are considered “clean”. The service also provides a 7-day retention period for each user and offers a randomized transaction fee to make it even more difficult for investigators to track down its users.
These services work by mixing a user’s cryptocurrency with a large pool of assets. Then, they return the user new coins with a total amount equal to the deposit plus 1-3%, which is taken as profit by the coin mixer company. While these services can provide added privacy and security, they are not foolproof. They have been used to launder funds for illicit activities, and several mixers have been shut down. As a result, many regulators are taking a closer look at the use of these services.
| Crypto Mixer |
