Regardless of how it was built, the house of Bitcoin is more susceptible to scams, hacks, and prying eyes than ever. Keep your coins safe with bitcoin mixers and let your mind rest at ease.
The burgeoning adoption of cryptocurrency is both boon and curse for many of its most dedicated users. Greater adoption means more ways to use your bitcoin. More merchants, more options, more users. More users allow for the technology to grow into something better. To morph itself into that thing that we all need. Better transaction rates, lower fees, new software.
While the perks of popularity are indeed varied and enjoyable, there is definitely a downside to the whole world being wise to bitcoin. Governments take notice and apply regulation where, arguably, there shouldn’t be any. Hackers use a greater understanding of blockchain to find out whose account is worth the heist.
Owning bitcoin can be awesome. Especially if you jumped on that ship early. In fact, millionaires were made virtually overnight when the cryptocurrency hit its peak in 2017. This isn’t really a surprise, as most of us have heard these financial fairy tales before. What may shock you is that there have been epic scams and hacks in which people went broke overnight, too. Of which many could have been easily avoided, simply by using bitcoin mixers and better wallets.
Read more about Bitcoin Mixers with How Long Does the Bitcoin Mixer Process Take?
Security in Bitcoin Mixers: 5 Epic Hacks of Bitcoin History
1. Mt. Gox
Probably the most famous cautionary tale to any Bitcoin user, the Mt. Gox hack resulted in a loss of over 750,000 BTC. The kicker? The exchange was hacked twice. Once in 2011 and again in 2014. Investors lost all of their funds as the wildly popular Japanese exchange went under. To this day, not a single refund as been made.
In 2012, the exchange BitFloor was hacked, with a total loss of 24,000 BTC. What made this hack possibly the most frustrating ever, is that it was later discovered that the exchange was keeping their unencrypted private keys online as backups. Further proving that exchange hosted hot wallets filled with unclean coins is possibly the worst place for you to keep your bitcoin.
Poloniex was taken for a large sum of bitcoin in 2014, the actual number of which is still unknown today. The reason that the number is unknown is that instead of releasing full details about the hack, it was found that the exchange was pooling their user coins. As the heist targeted that pool, the exchange simply reduced the holdings of every user by 12.3%. If you ever wondered why exchange coins are just as filthy as peer-to-peer- now you know. It’s because coins brought in by anyone can ultimately end up as a part of your own batch (more on this later).
Originally created as an alternative to Mt.Gox, Bitstamp was touted as a safer choice- until they themselves were hacked for 19,000 BTC in 2015. If that doesn’t sound like a lot, that about $5 million worth by today’s standards. Just when you think it’s safe…
Lastly, we come to Bitfinex, yes- that Bitfinex. One of the most popular and highly rated exchanges currently gracing the internet. In 2016, the exchange was hacked for 120,000 BTC, in the second-largest hack in history. While investors were reimbursed for their loss, it was found later that hackers were able to breach Bitfinex multisig wallets- reportedly the most secure hot wallets you can have.
Security in Bitcoin Mixers: Why You Need Bitcoin Mixers
If you’ve learned anything so far, we hope that it’s to hold a little less trust in exchanges, and think a bit more critically about the safety and security of your bitcoins. The one thing that all of these hacks have in common, outside of the fact that they’re all exchanges, is that each and every hack targeted a known holder of high volume bitcoin.
You see, profitable hacks take a lot of time, and a metric ton of effort. It’s nothing like the movies, where some kid sits down and types feverishly for 20 minutes. Hacks take a ton of planning and research. Some even take months to pull off. So it’s rare that any hacker is going to target anything less than a massive holder.
What does this have to do with bitcoin mixers? We’re glad you asked.
By using blockchain analysis, just about anyone with a modicum of computer knowledge can figure out where big money is going to and coming from. Don’t believe us? Do a quick google search on “wealthiest bitcoin addresses”. Sure enough, you’ll find several lists dedicated to telling you which addresses in the blockchain hold the biggest balances.
Read more about Bitcoin Mixers with Top Bitcoin Mixers of 2019
Security in Bitcoin Mixers: When You Need Bitcoin Mixers
It’s not like these wallet holders are parading their balances around, so how does someone find out which ones have big holdings? By following the blockchain trails. In the same way that hackers can figure out your personal information by using blockchain analytics, they can also figure out which wallets are worth targeting.
The only way to effectively stop hackers from knowing what you’ve got stored and making you a target is to sever the ties between your coins and your wallet address. The only way to do that? You guessed it- use a bitcoin mixer.
Not only that but as we subtly mentioned above, some exchanges have a habit of pooling their client’s hot wallet coins, which means that you have no idea where your coins are coming from. This isn’t just true with exchanges, but true for almost anytime you purchase bitcoins. In fact, you can inadvertently purchase bitcoins that are being actively surveilled by authorities. Or accidentally purchase bitcoins that have been used for some really bad things, by some really bad people.
Until you sever those blockchain ties and run your coins through a bitcoin mixer, you have no idea where their blockchain trail might lead you- or might lead the prying eyes of people you really don’t want looking at your stash.