Cryptocurrency is undoubtedly an exponentially lucrative marketplace. If tread wisely, investors and traders can earn an enormous amount of profit. However, similar to any other concept, cryptocurrency trading also holds its share of complexities. One of the major concerns associated with cryptocurrency trading is the lack of privacy and anonymity. Cryptocurrency mixing, also known as cryptocurrency tumbler is a popular service that mix tainted or identifiable cryptocurrency with each other in order to obscure their trail back to the original fund source. The essential concept of mixing is to enhance cryptocurrencies’ anonymity.
Understanding the Crypto Mixing Concept
Cryptocurrency mixing enables people to ensure their privacy. It typically charges 1 to 3% transaction fee for mixing the coin. Cryptocurrencies hold public and open-sourced ledgers that tend to record all transactions on a blockchain. This implies that if an individual carries out a transaction using any cryptocurrency, then that transaction will be recorded for all the world to see. The transaction will not have concerned individuals name attached to it; instead, it will be shown as a string of number. While the transaction will not reveal the person’s name, it is still not enough anonymity.
The reason is because of the fact that the ledger is public for people to see, hence people fear that their transaction can be trailed back to their fund source by the hackers, or companies that are want to gather important financial information. This is difficult for people to accept who are looking for the highest degree of privacy. Therefore, people harness the potentials of cryptocurrency coin mixing.
How Does Coin Mixing Work?
Coin mixers work by essentially collecting cryptocurrency from the people cryptocurrency, mixing it with a giant pile of other cryptocurrencies, and then sending them smaller units of cryptocurrency to an address of their preference, with total the amount that you put in minus 1-3%. The 1-3 % is generally taken as a profit by the coin mixing company. This is how they make money.
If people use any type of coin mixer, then they must send the organization cryptocurrencies. Otherwise, they will have nothing to mix. However, because you are sending some of your money to the service to be mixed, you need to make sure that you send it to a reputable coin mixing company. Otherwise, you could potentially be robbed of your money.
There is an array of companies that extend coin mixing services to people. If you are interested in having your cryptocurrencies mixed in order to increase your privacy, then you will have no difficulty in finding such services in the market. Presently, coin mixing is completely legal in the United States, and its degree of the legality of coin mixing varies around the world, as does the legality of cryptocurrencies themselves.
Coin mixing is considered similar to the practice of money laundering. However,it has a more legal and ethic approach towards it that aims to protect people’s money. Through its process, it renders people the anonymity that they seek during a digital transaction of coins. Coin mixing works similar to hiding your IP address through some third party app. Your coin is mixed with the thousands of coins of a wide range of people, hence providing the user with the security and anonymity that you seek.
To Whom Coin Mixing can Prove Helpful
There are many people as well as organizations, who may be more wish to use coin mixers. For instance, companies who are making large transactions in cryptocurrencies may not want these transactions traced because they want to keep their business dealings secret. For such companies, if their competitors find out what they are buying, and how much of it they are buying, this could be very problematic.
Idealists are another group of people who may value increased anonymity for cryptocurrency transactions. These are people who believe that governments or other institutions should not be able to track every single transaction that people make.
Mitigating the Privacy Risks
Trading in cryptocurrencies proves to be an efficient way to ensure privacy while performing peer-to-peer-payment, online transaction, etc. While this type of trading offers anonymity, it doesn’t guarantee privacy as the digital transactions are recorded in the blockchain. This allows people to check your transaction and trace the pathway of you fun via your blockchain address.
SmartMixer is excellent software that helps you protect your money and achieve complete anonymity. It is designed to enable to combine your coins through its dedicated pools. Cryptocurrencies will be blended with other cryptocurrencies while using this software, creating confusion and making it difficult to trail the original source of the fund.
Criminals, of course, are another group of people who value full anonymity when it comes to cryptocurrency transactions. This is actually a concern within the cryptocurrency world, and it is something that could lead to heavier regulation of Bitcoin and other cryptocurrencies.