For many, mixing bitcoin is more than just about protecting your stash from prying eyes, it’s about the foundational principles of bitcoin itself.
Bitcoin was built on the idea of a decentralized currency, that could be used anonymously and without influence. Some say that the major financial crash of 2008 was the inspiration for the currency. As more people lost their home, their wealth, and any assets they had to keep them from being homeless and hungry, an option was proposed.
What if there was a currency that could allow people to use their own funds exactly the way in which they see fit. No middlemen, no fees, no big data, no identity. Just people using currency as the base exchange that it was meant to be. What if, with this currency, the way to keep it honest would be to create technology that could house a public ledger, something open and transparent, and also completely unchangeable.
Many argued that this currency could prevent governments from seizing what little reserve people had left. It could stop big banks from inflating their books and turning profits off of the exploitation of peoples misfortune. It could arguably change the world.
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The Creation of Bitcoin
Perhaps, because of these musings, in 2009, after the entire world saw how devastating global economic downturn can actually be- bitcoin was born.
Thanks to the use of blockchain technologies, the world now had access to Distributed Ledger Systems. A technology which allowed them to easily follow the transactional history of anything. Bitcoin, the first truly anonymous cryptocurrency gave people the option to spend their money as they wanted, without having to parade themselves in front of boards and banks to do it. It created a system in which, you could be a billionaire, without having any of the limelight. Where you could happily buy what you need off of the internet discreetly.
The only problem was that the adoption of this new system would take time. Years in fact. It was also less secure than we had all hoped. In performing the tasks necessary to engage a wide audience for global adoption, and provide the necessary adjustments to keep our bitcoin safe, the world of cryptocurrency lost something. It lost its anonymity.
Bitcoin is now one of the most highly surveyed types of currency in the world, with everyone from big business to big brother trying to figure out how to get involved with it. Hackers are now able to pinpoint which platforms and people have the most bitcoin pooled in any given area, making the payoff from massive heists worth the incredible amount of effort it takes to pull one-off.
Why You Need to Mix Your Coins
Using a bitcoin mixer has often been equated with money laundering. Despite the obvious nefarious undertone, the practices themselves are similar. However, you don’t need to be a criminal or have illegitimately gained coined to require this service.
The genuine difference between these two situations is based entirely on how bitcoin is legitimized. When you go to the gas station and buy a pack of gum with a 5 dollar bill, both that bill and the change you receive have unique serial numbers. The likelihood of particular serial numbers of bills (especially those that have been in general circulation for some time) being tracked is really low. No one is paying attention to the fact that you have just received three one-dollar bills and some coins in exchange for that particular 5 dollar bill.
Now, if you say, rob a bank- the government is going to pay close attention to the serial numbers of the money you stole. Making those bills easily trackable, unless you launder them. Similar situations exist with all sorts of illegally gained funds, like money that was obtained through channels that can’t be reported to the government and taxed without the owner getting into some big trouble. This is why we launder money. To give that money a different- and legal- origin story.
In contrast, if we go back to the gum story- had you made this transaction in bitcoin, the wallet you paid from (the serial number on your 5 dollar bill) and the wallet you paid into (the cashier) would be noted. Noted in an open ledger that anyone with any amount of expertise could look at. These transactional histories are stored in the blockchain any time anyone makes a transaction with bitcoin. These histories go all the way back to what’s called the “genesis block”, meaning that every bitcoin transaction ever made is written in digital stone, and publically viewable.
Now consider that you always use the same wallet for your bitcoin storage and transactions. You have to use your name, bank account number, and other identifiable information in order to turn fiat into bitcoin. Suddenly, your information is now attached to that storage wallet. The amount of bitcoins purchased is noted in the blockchain, every purchase and transaction you make with those coins are entered into the blockchain. Any charitable donations you make can be directly attributed to you. Should your assets be frozen, or your identity is stolen, so too can your bitcoin.
This paints a pretty clear picture for hackers, government agencies, and big business as to how much bitcoin you have, what you use it for, and who you are. Almost completely removing the anonymity of bitcoin. Leaving us all wondering how we got here in the first place.
For this reason, everyone should be using a bitcoin mixer, if only to keep the dream of crypto anonymity alive. Bitcoin mixers, tumblers, and laundry services keep you from being tracked, identified, and hacked. Choosing the right bitcoin mixer is paramount to keeping your coins, and your identity, safe. Just like everywhere else on the internet, there are definitely bitcoin mixer scams that could cost you dearly. By exit her losing you bitcoin, or not protecting your identity at all. So ensure that you’ve done your reading and are confident in the validity of any mixer that you choose to use.