What is Bitcoin Mixer (BTC Tumbler)?

Back when Bitcoin was introduced to the world in 2008, early adopters of the cryptocurrency were brought to believe that it not only solved the intermediary problems in the traditional financial system, it could offer anonymity to its users. Indeed, anyone transacting in Bitcoin does not have to reveal their identity to the fund’s recipient. Moreover, the underlying blockchain technology ensures that transactions are immutable and transparent, eliminating any risk of the Bitcoin transaction. However, with the existence of public available blockchain explorers and blockchain analytics services, it is now possible for anyone to track one’s transaction history so long as they know the sender’s Bitcoin address. Those tools allow interested parties to piece together the origin of the Bitcoin transaction. Hence, Bitcoin users can be identified via public keys, and the Bitcoin address shared to the recipient (e.g. merchants) since public keys can be traced to the particular IP address of the owner of the Bitcoin wallet.

Many investors have also entrusted their favorite cryptocurrency exchanges, as they trade and store their coins on the wallet of exchanges, which makes tracking very easy. This is because most cryptocurrency exchanges now have to comply with regulations set by many governments, which requires exchanges’ users to implement KYC procedure, to declare their actual identities to the exchange, and subsequently the government. As a result, the once-believed anonymity in Bitcoin is no longer valid in today’s context as governments and regulators doubled down on identifying users of Bitcoin and other cryptocurrencies.

In June 2020, IRS-CI Cyber Crimes Unit has published a Request for Information (RFI) to trace cryptocurrency transactions of anyone they are interested in investigating is further evidence that points to governments and regulators awareness that Bitcoin and most cryptocurrencies can be traced with the help of blockchain analytics tools.

Bitcoin Tumblers - the right to the privacy

Unfortunately, the adoption of the cryptocurrency market and blockchain technologies around the world have also seen transactions of Bitcoin and other cryptocurrencies as a target for regulators and even hackers. Immutability and transparency in blockchain have instead allowed them to identify individuals easily, potentially exposing anyone dealing with Bitcoin with a variety of issues due to privacy compromises. Thus, there is a growing demand for privacy tools among crypto investors that could prevent or eliminate anyone from exploiting blockchain’s immutability to their advantage in the intrusion of one’s privacy.

Today, one of the best privacy tools for Bitcoin users is called Bitcoin tumbler (or mixer). To achieve anonymity with pseudonymous Bitcoin transactions, a Bitcoin tumbler is effective in masking transactions by mixing them to obscure their origin. The process is fairly straightforward, and it is often touted as a way to transact Bitcoin anonymously and is certainly a must-have privacy tool for those who care about their privacy. Despite the small transaction fee as charged by Bitcoin tumblers, the assurance of anonymity has outweighed the negligible amount of monetary contributions imposed onto privacy-conscious individuals who would rather mix their Bitcoins to hide, mask, and makes it especially difficult for anyone to trace their transaction activities in the digitally connected world today.