AI is already changing the way our world works. It has started replacing various jobs, as AI art, writing, and many other things have started coming up. Now, the big talk of the finance world is whether the future of crypto mixing lies in an AI powered Bitcoin tumbler. We don’t know for sure yet, because many experts are already saying that blockchain and AI technology will not work together. Some say they are like oil and water because they will not mix well. However, there is a lot you should know before reaching such a conclusion. So, here is everything you need to know about the future of an AI-powered Bitcoin tumbler and if it is even possible.
Can AI And Blockchains Be Integrated?
Let’s first begin by understanding if the technology of blockchain and AI will even work together. According to Andre Cronje, the founder of Fantom, blockchain technology and AI are like oil and water because they do not mix well. That is because there are also many investors that don’t completely understand this technology. Even though it has the potential to boost the capability of the blockchain, it still doesn’t mean that you should put them together. We will come to the challenges later, but here are some ways AI can improve a Bitcoin tumbler service and blockchain technology:
Better Smart Contracts
AI technology can be leveraged to boost the reliability and accuracy of smart contracts. That is because these algorithms are incredibly intelligent, and they have the potential to:
- Identify different patterns
- Analyze various details of the contracts
- Keep learning from the previous transactions
- Analyze how the smart contracts are performing in real-time
Because of this, there might be a shift from smart contracts to intelligent contracts. However, this is far-fetched right now, as it will take some time for such a solution to emerge in the world of Bitcoin tumbler and crypto mixing.
Protecting People From Risk
This might be more applicable to crypto trading rather than crypto mixing, but it is a big advantage for anyone dealing in cryptocurrency. That is because trading cryptocurrency is risky, which means that AI can come in to save the day. For example, AI has a high potential to protect people from big risks in trading. The AI can spot various trends and make excellent decisions on behalf of the trader. So, this will work in the trading world. However, it might not be a big advantage for people that only use a Bitcoin tumbler service.
Perhaps the best strength of AI is that it can easily automate any tasks you would like. Because of this, even the Bitcoin Tumbler services can be fully automated. It will reduce the need for people to do everything manually on the platform, as the AI will do it for them. This will save their time and effort, which means that people will want to use more AI-powered Bitcoin Tumbler services. While this sounds great in theory, it can also be difficult to create such a mixing service. However, if it does happen, then it can save a lot of time and effort for the users.
There is a lot of fraud in the world of cryptocurrency and Bitcoin mixing. This is where AI can also shine with crypto. That is because one of the biggest strengths of AI is that it can detect patterns, which means that it can be trained to detect the various anomalies in these transactions. In the long run, this can prevent any fraud, money laundering, or other such illegal activities from taking place in the cryptocurrency world. This will also mean that the AI will require a large dataset to predict and identify such patterns. However, if this can happen, then it can be a fantastic strength for AI to have in the blockchain world.
Another possibility could be that AI can easily interact with systems that are based on blockchain. These include systems such as data storage, smart contracts, and much more. In the long run, this will allow them to integrate more efficiently and provide better solutions. Again, all of this has not been practically applied yet, which is why we don’t know how this will play out in the real world. However, in theory, it seems to be a good system for the AI, blockchain, and Bitcoin tumbler.
The Challenges That Might Come With Creating AI-Powered Bitcoin Tumblers
According to experts, there are many challenges that will come with creating an AI powered Bitcoin tumbler. That is because we have only begun to scratch the surface of the potential of AI in the finance world. So, it will take a while before the technology is deemed to be usable in the world of cryptocurrency. Here are some challenges that might come with creating an AI powered Bitcoin tumbler:
Inaccurate Predictions And Decision Making
Firstly, you have to understand that AI can be wrong, and it has the ability to make inaccurate predictions that might not turn out to be great for you. AI relies on data to make predictions, and the problem with blockchain is that it will never contain all the data you need to gain a complete picture. Because of this, it is not a good idea to mix blockchain and AI with one another. Some of these predictions could lead to losses that will impact many parties. This is why even the world of Bitcoin tumbler services might be hesitant to adopt this technology. So, we will have to see how it turns out before it is used for crypto mixing.
Effectiveness Of The Mixing Process
The second challenge will come with the effectiveness of the mixing process. That is because the entire mixing process in the Bitcoin tumbler is dependent on the number of people who have added their coins to the mix. Because of this, it could be challenging to attract a sufficient number of people to guarantee that the process is legit and effective. That is because not everyone will trust an AI-powered Bitcoin tumbler, especially if it is a new one in the market. This is why it will take some for the Tumbler service to become effective, if at all. Most of them might not work out because of a lack of trust that would lead to ineffectiveness.
Developing A Secure Bitcoin Tumbler Powered By AI
It will also be challenging for experts to create a secure Bitcoin tumbler that is powered by AI. That is because if there are vulnerabilities in the code of the Tumbler, attackers can take advantage of it and steal funds. It can also lead to a leak of the financial transaction history of the users. The creators will have to work incredibly hard to create a secure AI-powered Bitcoin tumbler. If they don’t, people will not trust the service, and it will fail before it even begins. A lot of money, resources, and effort would have to go into creating such a secure and reliable tumbler.
Promotion Of Illegal Activities
Many people can use the AI powered Bitcoin Tumbler for illegal activities. Keep in mind that this is also a problem with the Tumblers that already exist. There have been cases where the authorities have shut down a mixing service because people have used it for money laundering and other illegal activities. However, such issues might be more prevalent if the Tumbler is powered by AI. There will be no one to keep a check and balance on the service, which means zero accountability. This will lead to many people exploiting the service, which could be a disaster.
Where Is The Future Of Crypto Mixing Heading Towards?
There is talk about the trends of crypto mixing heading toward AI. However, there is still a long way to go before this even becomes a reality. Right now, it is more hype than anything else. While AI-powered Bitcoin tumbler services are far-fetched at the moment, here is what you need to know about the future of crypto mixing and the possible trends that it is heading toward:
1. Higher Number Of Privacy Coins
Some Bitcoin tumbler services are for specific types of coins while others offer mixing services for many coins. Recently, there has been a higher trend toward privacy coins. These are increasing because such coins have been designed for a high level of anonymity and privacy. The problem with a Bitcoin tumbler service is that these privacy coins reduce the need for using such services. People can just invest in privacy coins to increase anonymity and privacy. This reduces the hassle of going through a tumbling service to anonymize transactions. So, if the number of privacy coins keeps on increasing, then Bitcoin’s tumbling services may not last long. Instead, there might not be an AI-powered service at all. Privacy coins that have already entered the market include Dash, Monero, Zcash, and many others.
2. More Decentralized Solutions
The world of cryptocurrency and mixing is always coming up with new technologies to ensure better privacy and anonymity for users. This is where decentralized solutions come in. The future of a Bitcoin tumbler or mixer might be the use of smart contracts to ensure a decentralized solution. That is because the problem with centralized solutions is that they can be compromised or hacked by third parties. Because of this, people think twice before trusting such a mixing solution. For now, the trend of crypto mixing seems to be moving towards decentralization rather than AI. There are already a few decentralized solutions that you can use to mix your coins. Maybe in the future, they could also find a way to integrate AI into this technology, but it is unlikely for now.
3. Adopting Better Technologies
Better technologies mean that the experience of users will keep on enhancing when they are using Bitcoin mixing services. Besides that, these technologies have also come into use to ensure the security and efficiency of Bitcoin Tumbler services. Such technology is not possible with AI right now. That is because it could lead to various legal and ethical issues that could hinder the security and privacy of these services. This is why the trend is not toward AI right now but trying to create and adopt better technologies for the services that already exist.
4. More Scrutiny
Keep in mind that authorities are always keeping a check on services that deal with Bitcoin, cryptocurrency, and more. That is because the market still requires a lot of regulation. Laws are also being passed to boost the scrutiny of Bitcoin tumbler services. In the future, this will mean more challenges for such services because they will have to comply with all the regulations and laws. Many people might not want to opt for this, which can result in more decentralized options or the adoption of privacy coins. We will have to see and find out what will happen in the future. Scrutiny and regulation have increased in recent years, and they will only keep on increasing. That is because lawmakers don’t want people to misuse such solutions for illegal purposes and activities. Here are some examples of Bitcoin tumbler services that have already been cracked down on by various authorities:
The first case we will talk about is of ChipMixer, where Europol said that the mixing service was unlicensed back in 2017. You could easily access this mixing service on the standard web and the dark web. However, an investigation was carried out against this mixer. The investigation led to the revelation that this mixer service laundered Bitcoins worth more than 150,000. Most of these Bitcoins were tied to the trafficking of illegal goods, markets on the dark web, and much more. Many popular ransomware actors were also using this service. This included Lockbit, Zeppelin, Dharma, Mamba, and many others. These actors were laundering the various payments that they had received. The operation and investigation are still underway. The authorities still have a lot to uncover to ensure that the people behind this platform get what is coming to them.
The Office of Foreign Assets Control (OFAC) sanctioned the Bitcoin tumbler service, known as Tornado Cash. According to the investigation, the mixer was used to launder more than seven billion dollars worth of cryptocurrency since the company was launched. Besides that, the stolen money was also being laundered through this mixer. The mixer perpetuated fraud, sanction evasion, theft, and much more. The wallets that were associated with this Tumbler service were also sanctioned. This is not the first time where such incidents have taken place. Authorities in the US are always trying to crack down on Bitcoin tumbler services that are being used for illegal activities. The number of such mixers has increased in recent times. Because of this, it is more important than ever to keep an eye on such services.
The police seized Bestmixer.io because it was said to wash the cryptocurrency and make all the funds mix without any traces. The European police shut down this mixer after finding out that it was used to launder more than $200 million worth of cryptocurrency. The Bitcoin tumbler service was new because it began its operations in 2018. Just after a month, it was launched, and the police began investigating it because of suspicious activity. In just one year of the service beginning its operations, it managed to launder more than $200 million. This is an impressive feat for any Bitcoin Tumbler service, which alerted the police immediately. This mixer has been taken down, and you will not find it online anymore. In the same way, many individuals have also been charged for using mixing services to launder cryptocurrency.
What Are The Implications Of Using AI For Bitcoin Tumbler Services?
Let’s assume that soon enough there will be Bitcoin tumbler services that will leverage the power of AI to ensure that users can have smooth transactions. However, what will that even look like for the people using the services? Besides that, how will AI change the world of Bitcoin mixing? These are good questions, but to answer this, we will have to understand the implications and use of AI in the world of Bitcoin mixers. Here are some ways that the technology can be leveraged to create better tumbler services:
1. Advanced Algorithms
We already know that AI has the ability to create advanced algorithms based on the current knowledge and ones that keep coming up. Because of this, AI can be highly useful in the creation of advanced algorithms for the mixing transactions that take place. As of now, these Tumbler services use simple algorithms that hide the transaction of the users. Keep in mind that these transactions are still not foolproof, which means that there is always a possibility of being traced. The current algorithms work by mixing different transactions so that it can be challenging to trace the transaction to the original initiator. On the other hand, AI can create much more complex algorithms that can hide transactions even better. For example, it can analyze the history of the financial transaction of the user and then identify different trends and patterns that authorities can use to link the different transactions. After such an analysis, it can create an algorithm for a foolproof solution that will ensure better privacy for the mixer.
2. Preventing Attacks
An AI-powered Bitcoin tumbler can be incredibly powerful because experts can leverage this technology to prevent attacks from third parties. That is because there is a risk of these mixers being hacked or compromised without any protection. When this happens, anyone can easily have access to the finances and the data. On the other hand, AI can be used to detect the various types of attacks that can take place. It can do this by analyzing the traffic of the mixer service. If there is any suspicious activity or pattern, then it can take various steps to ensure that the mixer is safe and secure. Keep in mind that this depends on the training of the AI. It will have to go through a process of learning before it can come to such a sophisticated level. However, when it does, it can completely change the way that a Bitcoin tumbler service works.
3. Better Experience For The Users
People on the internet are always looking for solutions that provide them with a fantastic experience. This means that even Bitcoin Tumbler services are looking to boost the experience of users. This is where an AI-powered mixing service can come in to ensure that the users can have an experience without any issues. That is because first-time users can be intimidated when using the tumbler for the first time. Such people are not familiar with the technology, and they might have to go through a learning curve to begin using it. However, if the interface of the mixer is powered by an AI, then it will be much easier for the users to navigate such an interface. The key is to ensure that there are proper guidelines and instructions for the users they can follow. It will allow them to use the service for the first time without experiencing any difficulties. In the long run, this will improve the experience of users and boost the reputation of the AI-powered Bitcoin tumbler.
Are There Any Risks For Users If They Begin Using AI-Powered Bitcoin Tumblers?
It is always crucial to understand the risks that are associated with Bitcoin tumblers and users. For example, the biggest risk could be that criminals can leverage AI technology for their own benefit. This means that they will use the mixer service for laundering money, engaging in other illegal financial activity, and more. The platform itself doesn’t pose any risk, except that it might be prone to hacking and other such issues. Besides that, it is the users that can utilize such platforms in malicious ways that can compromise the integrity of the platforms. To curb such issues, there will have to be regulatory controls on such services. These include the following:
Asking Users For Identification
When people are asked to prove their identity on a platform, they might not participate in illegal activities. If they do, then the service or the authorities will easily be able to trace them through this information. It can be a great step to ensure that people are not misusing the platform. It doesn’t have to be an extensive way to prove the identity of the users. Instead, AI-powered Bitcoin tumbler services can simply ask for the name or email address of the user. Even such a small step will go a long way to ensure that criminals or malicious actors are not using the platform.
Limiting The Amount Of Bitcoin One Can Mix
There are people that have laundered millions of dollars through Bitcoin tumbler services. This is a problem because many of these platforms don’t have a limit to how much Bitcoin you can mix. On the other hand, an AI powered Bitcoin mixing service can have a limit to how much Bitcoin one can mix. Such limitations will ensure that people are more accountable for their actions and transparent with their transactions. So, they will think twice before using a Bitcoin mixing service for illegal activities. This is why an AI powered service can be helpful in mitigating the risk of people misusing such platforms.
Following The Regulatory Framework
An AI is trained with the latest frameworks and tools that allow it to keep updating a platform and its technology. An AI-powered Bitcoin tumbler service will follow the regulatory framework that has been provided. This means that the service will be in compliance with all the laws and regulations. Such compliance will ensure that users are not at risk for using the service. Besides that, it will also guarantee that the founders of the service don’t get in trouble for misuse by the users. So, it will lead to a win-win situation for everyone involved in using this service.
More Trust By Users
Following all of these guidelines will mean that the users also trust the Bitcoin tumbler service more. That is because they will know that the AI-powered service has ensured a fantastic experience for them with better accountability and reliability. This will lead to more people adopting such services for security and anonymity rather than malicious activities. As of now, many people are also hesitant to use such services because they don’t trust them. However, AI-powered services can lead to more trust. Keep in mind that this is a double-edged sword because some people might end up trusting the service less if it is powered by an AI.
The Current Needs Of Bitcoin Tumbler Services
AI-powered Bitcoin mixing services might happen in the future, but it is not a concern for the mixers available right now. Bitcoin Tumbler services need to assess their current needs and meet them to ensure that people make the most use of them. Here are some ways these services can ensure a better experience now:
Adapting And Innovating
Bitcoin tumbler services require innovation and adaptation to new technologies in the current market. The ones available currently are simple mixing services that don’t go all the way in ensuring that the transactions are foolproof. However, with the adaptation of new technologies, it can overcome this issue. This is why AI is needed to fill the gap and guarantee that users are getting the most out of these services. When such services begin experimenting with new technology, only then they will get ahead in the world of crypto mixing.
The current Bitcoin mixing services require better security. This will come through better algorithms that have been designed to secure the financial transactions of the users. Currently, the algorithms are simple, which is why the users are not completely secure. Instead, many people are switching to more secure solutions such as privacy coins for this purpose. Unless Bitcoin mixing services come up with better security, they will see their users flee. This is a need that needs to be filled by the current players in the crypto mixing market.
A Filter For Users
Many Bitcoin mixing services have gotten into trouble because users have utilized their services for illegal activities such as laundering money and much more. All of this is because of the fact that users don’t have to provide any information before opting for such services. All they have to do is connect their wallet and start using the service. While this is great for their security, it also means that many people will leverage this and use it for illegal activities. This is why crypto mixers also need to keep a filter for users to go through. It will allow them to keep the platform safe and sound so that it is not used maliciously. These can be any type of filter that can guarantee that the users are legit. For example, services can ask for names, email addresses, or other information from the user where they have to prove their identity. Such a filter will deter any criminals that would live to use the platform for illegal activities.
That was your complete guide to understanding whether the AI-powered Bitcoin Tumbler service is the future or not. AI can change the game for Bitcoin mixing, but it can also pose many risks and challenges. It will have to overcome these to ensure a great experience for the users and the platform owners. For now, the AI powered Bitcoin mixing service is only a dream because there is no work being done toward making this happen. The focus of the crypto world is on making sure that there is more regulation and security. The trend is moving toward decentralization, and AI integration will be the next step after that.