So fresh, so clean! Don’t let your coin’s dirty laundry bring you down. We can help you decide when you should be using a bitcoin tumbler.
Bitcoin is blowing up. There’s no doubt about it. Following a total market crash in March of this year, largely thanks to global shutdowns and supply chain disruption following the initial coronavirus pandemic, bitcoin saw it’s market shakeout and came back swinging. With values reviving above the pre-pandemic market crash, a newfound confidence among traders can clearly be seen. This total market turn around has found many new investors looking into the market, as well as the seasoned pros looking towards better ways to invest creatively.
While this spells great news for the bitcoin market itself, it also means that a number of new users who don’t know exactly what they’re doing are going to look into the market. Also- if the bitcoin boom of 2017 has taught us anything- seasoned pros need to be wary of the onslaught of continued regulation and less than genuine media installments, making it more important than ever before to be ultra-aware of the coin’s basic founding principles.
Bitcoin was designed to offer an alternative to modern currency. Something decentralized, trustless, and largely anonymous. A way to invest and purchase that kept consumers safe from identity theft, and retailers from losing out of profits to extortionate fees required by middlemen. The way the coin was built to achieve these things was through pseudo-anonymity and fungibility.
Using a Bitcoin Tumbler: What Bitcoin Tumblers Actually Do
One of the biggest problems that bitcoin faces today is the ever-increasing lack of anonymity. While other cryptocurrencies, like Monero, are still holding strong to their privacy coin principles as well as seeing continued adoption, bitcoin seems to be falling prey to boundary-crossing legislation as the confirmed cryptocurrency front runner.
Currently, the only way to truly protect your privacy, and consequently one of the core values of the coin itself, is by using a bitcoin tumbler or mixing service. Bitcoin tumblers are designed to help sever any ties your coin may have to the transactional history stored on the blockchain. The transaction history of the blockchain is fundamental to bitcoin’s operation- as it is the public and immutable ledger of all transactions, where authenticity is assured before allowing a transaction to occur.
However, the long line of transactional history that’s directly tied to each individual coin isn’t actually necessary to the function of the ledger. Nor are the KYC protocols that many exchanges and wallets require of their customers. These things are merely symptoms of centralized big businesses and overreaching governmental agencies attempting to infiltrate and disband the foundational nature of cryptocurrency. Because it was designed specifically to circumnavigate the endemic problems that conventional fiat structures had, it becomes a genuine threat to those structures as adoption continues to blossom.
Bitcoin tumblers cut ties with past, unnecessary transactional history through a series of microtransactions. Taking coins from multiple sources, and breaking them up into small values and trading those values amongst each other serves to completely obfuscate origin tracing on coins. Making it far more difficult for analytic software to trace a coin back to a certain user, wallet, or transaction.
Best Bitcoin Tumbler has several blog posts that will interest any crypto trader! Read through our most recent like Separating Fact From Fiction When it Comes to Bitcoin Mixers and How Bitcoin Forks Help Shape the Future of Finance.
When You Should be Using a Bitcoin Tumbler
So you might be thinking- “I haven’t done anything wrong with my coins. I got them off of a reputable exchange. They don’t have any nefarious transactional history. I also have no plans to engage in future illicit activities.” While it’s not necessarily bad logic, good for you for not being a criminal- it doesn’t make the base premise right.
The coins you currently own don’t have a nefarious transactional history that you know of. That’s really important. As it stands the transactional history of a large number of bitcoins on the market can be easily traced throughout the blockchain. Which means that if your coins were ever used for an illicit activity they (and consequently you) could be flagged.
So realistically, unless you’re mining your own coins and storing them in an offline wallet that you have no personally identifying data stored in, you’re probably going to need a bitcoin mixer.
Transacting with High Volume Wallets
This is especially true if you hold any high volume wallets, or wallets that you transact with regularly. The more a wallet address appears in the blockchain, the higher the likelihood that analytical software could trace it back to you, or figure out just how much bitcoin you’re sitting on.
For traders that believe they have nothing to fear- as they are holding onto their assets and not trading them- think again. Holding onto coins is a highly effective trading strategy, especially when you look at the value fluctuation of bitcoin. However, if you put coins with a dirty past into a wallet, you could be setting yourself up to lose the entire stash.
Few exchanges fully vet the coins that come into their coffers. This is largely because it’s almost impossible to create fake bitcoin, or trade the same bitcoin twice- so they don’t need to have a high index of suspicion for the coins that fly across their desks regularly. But you always should, especially if you plan on stowing them aside for a while.
Using a bitcoin mixer at this point is more about protecting the anonymity of your wallet address than it is the coins you’re using. Again, the more often a wallet address pops up on the blockchain, the easier it is to track. So if you use the same “dirty” wallet, over and over again, your purchase patterns and habits are up for grabs.
How to Use a Bitcoin Tumbler
When you choose to use a bitcoin tumbler, make sure that you’re not going to taint your freshly laundered coins, by putting them into a wallet or using an IP address that’s easily traceable. Follow these steps to help keep those coins fresh and clean for as long as you own them.
Privacy software, like TAILS, a type of open-source software that runs on Linux. It can be booted from USB or another type of external drive and serves to “wipe” any record of your activity while using it. TAILS automatically uses the TOR network and is often used in conjunction with a VPN to further obscure an IP address.
These are the wallets that you’ll need to create inside of a security-focused operating system (i.e. TAILS). These wallets are a good idea to have when you need to shift bitcoins around- as they are considered medium security. There are a number of privacy-minded wallets that work well as transitional wallets- enabling you to take your anonymity a step further.
Backup Your Wallets
Always backup your wallets. This is massively important because any truly privacy-focused wallets or software won’t be connected to you in any way, so sending a password reminder to your email is out of the question. Write down your private keys and keep them somewhere safe.
Your storage wallet should always be just that. Preferably something that’s never directly connected to the internet (cold storage) and is hardware. Never use this wallet to transact with any site directly- that’s what your transitional wallet is for.