Dealing with cryptocurrencies like Bitcoin involves privacy concerns, as transactions are recorded on a public ledger, making them traceable to wallet addresses. Users who link their personal information to their wallets do so to ease transactions with banks, but this can compromise their privacy. Bitcoin tumbling, or mixing, is a privacy method that obscures the origin of bitcoins by mixing them with other funds, making transactions untraceable.
Benefits of tumbling include breaking the link between sender and receiver, allowing for anonymous online purchases and donations, and protecting funds from potential seizure by authorities. Tumblers work by sending bitcoins to multiple addresses, returning them mixed with other coins, for a fee. Options for tumbling include using CoinJoin technology, Bitcoin tumbler services, or anonymous Bitcoin wallets, which provide privacy without mixing.
Using tumblers involves creating multiple wallets, preferably using the Tor browser for anonymity, and transferring bitcoins through these wallets before and after the mixing process. Bitcoin mixing is generally legal but can be scrutinized under money laundering laws if misused. Tumbling provides a high level of privacy for Bitcoin transactions, making the origins of funds untraceable and undetectable.
When you deal with cryptocurrencies on a day-to-day basis (conducting your business, exchanging funds, and transferring money to different bank accounts), data privacy can be an issue, especially if you’re keen on protecting your privacy from random inquiries by governments and other official institutions.
The crypto market has been under increasing scrutiny by state and financial institutions in recent years, looking to impose their authority and control over the decentralized cryptocurrency ecosystem.
A key aspect in any sort of control over cryptocurrencies is user data and privacy. Bitcoin, (BTC) as the most popular and most valued digital currency, is famous for its decentralized blockchain system and the semi-anonymity it provides users. We say semi-anonymity because all Bitcoin transactions are archived on the public ledger, the Bitcoin blockchain.
This means that the transactions themselves are publicly available for anyone who uses a block explorer like Blockchain.info to search the blockchain, and the transfers can be traced back to the crypto wallets that sent them, or the ones that have received the funds.
Even so, the user data of these wallets is anonymous since no one can publicly see the actual name and other ID info of wallet owners. However, many users choose to freely associate their personal information with their digital wallets in order to avoid scrutiny from banks and other financial institutions when they’re withdrawing and cashing out their crypto into fiat money.
People who choose not to disclose their personal information when transferring or exchanging BTC are subject to extra attention from law enforcement agencies, banks, and corporations. Many banks directly refuse to accept money transfers with funds that originate from bitcoins unless presented with proof of where the assets originally come from. This is where tumbling bitcoins come as a handy tool for protecting your business transactions from unwanted inquiries.
So, exactly how to tumble crypto? To tumble crypto, you have to create three wallets using the Tor Browser. The BTC tumbling services will be used on your second wallet and then transferred to the third wallet. Read more to find out about the Bitcoin tumbler meaning, why is bitcoin tumbling used, and how to tumble bitcoins in detail.
Benefits of BTC Mixing and Tumbling
If you really want to stay anonymous and use your funds as you wish, you definitely have to tumble bitcoins. But what is bitcoin tumbling? Tumbling is a process where the origin of your bitcoins is cleaned through the network, mixing the funds with other BTC from different sources, effectively making your transaction’s origin untraceable.
Here are some of the key reasons for and benefits of tumbling bitcoins:
- Effective breaking of the connection between the sending and receiving address, retaining privacy.
- Cleaning the origin of coins, so they cannot be traced to any wallet, since the BTC you are transferring becomes a diverse mix of funds from different parts of the network.
- You can make totally anonymous purchases online, whether you’re buying different products, exchanging BTC for services, or making a VPN subscription without giving your personal ID.
- You can make anonymous donations to a charity or simply someone you want to help, without disclosing your own identity.
- Securely transfer your BTC without worrying about the possibility of your assets being seized or frozen by government agencies that want to investigate the source of your money.
- Total security of your personal data from third parties. Even the order you placed for a mixing service at a Bitcoin Tumbler website is erased after 24 hours, leaving no trace of the service.
- Making “tainted” bitcoins, such as ones that originate from gambling sites, clean again, because some Bitcoin exchange platforms like Coinbase don’t accept crypto transactions that come from gambling.
Tumbling Crypto Options
Bitcoin tumbling is also known as Bitcoin mixing or Bitcoin laundering, and it shouldn’t be confused with any type of money laundering, since it isn’t an illegal activity. You can tumble or mix bitcoins and achieve total anonymity when transferring BTC using one of the following methods listed below.
CoinJoin technology is one of the most popular ways of tumbling bitcoin. It combines BTC from different transfers by different users and creates single transactions with funds that originate from multiple sources. This way, an interested third party won’t be able to determine the source from which the BTC originates.
The CoinJoin method requires that multiple parties sign a smart contract to tumble coins in a transaction, obscuring the original source of funds for all of the participating sides.
Every participating side benefits from this agreement, and it is fully secure, enabling you to freely transfer BTC without worrying if a third party will have access to information about the origin of your funds.
Wasabi Wallet is a very popular open-source, non-custodial BTC desktop wallet with built-in CoinJoin technology that offers a simple and trustworthy Bitcoin mixing service.
Bitcoin Tumbler Services
Now, let’s see what a Bitcoin tumbler service actually is. Bitcoin tumblers are websites or platforms that deal with cleaning the origins of bitcoins. These service providers disconnect the links between BTC wallet addresses, hiding the origins of the funds by providing clients with a mix of new bitcoins.
A tumbler sends the assets you want to mix to multiple different outgoing addresses and you receive your funds back, minus the service fee, but they are now totally clean and mixed with BTC from different sources, making your assets’ origins untraceable.
These are some of the most popular and trusted tumbler services:
- CryptoMixer – CryptoMixer is a high-volume BTC tumbler service that is known for its almost instant tumbling since the platform has a reserve of 2,000 coins ready to clean your funds by mixing. The service fee is usually 0.5%, but it can be lowered to 0.25% for larger amounts of bitcoins.
Anonymous Bitcoin Wallets
This option isn’t exactly Bitcoin tumbling in the sense of using BTC mixing techniques, but it does preserve the anonymity of your funds. Yes, anonymous BTC wallets actually exist, and here are some of the most trusted ones.
- Ledger Nano X – Ledger Nano X is a top-of-the-line secure hardware wallet with Bluetooth connectivity, compatible with iOS and Android devices. This wallet is non-custodial which means that you control your private keys at all times, granting you full anonymity while transferring BTC funds, without the possibility of a third party identifying the source of the assets.
- Samourai Wallet – Samourai Wallet is a mobile wallet designed especially for keeping your transactions private, your identity hidden, and your assets secured. It uses highly advanced AES-256 encryption and doesn’t communicate with any servers, thus preserving your data from any possible third-party breaches. When using Samourai Wallet you also get seed phrase and PIN code backup options making it a great choice for preserving anonymity while exchanging BTC.
Quick Guide to Tumbling Bitcoins
In case you decide to use a Bitcoin tumbler service, here is a quick step-by-step guide on how to do it safely and efficiently.
- Create a standard BTC wallet on a platform of your choice on the clearnet. Deposit the Bitcoin you want to clean into the wallet.
- Create a new wallet but use the Tor browser while doing so, to hide your IP address.
- Transfer your BTC from the first wallet to the second one with a standard transaction.
- Create a third wallet using the Tor network again. This is the new address you will send the cleaned BTC to.
- Choose a BTC tumbler service and send your funds from the second wallet to the tumbler for cleaning. After the funds are laundered, enter the third wallet’s address as the destination Bitcoin address.
- After the funds are cleaned, you can start using Bitcoin as a payment method, for buying products, exchanging assets, investing, or cashing out if you like, without the possibility of anyone knowing the origins of your bitcoins.
Frequently Asked Questions
Are Bitcoin mixers illegal?
Bitcoin mixing is the process of combining bitcoins into one pool which makes it difficult for anyone to trace the origin of these coins back to their original owner. Mixers are legal when used correctly. However, if they are being used illegally then they can be prosecuted under money laundering laws.
A Few Words Before You Go…
Tumbling bitcoins is a great option for keeping your privacy when transferring BTC.
As you can see, it isn’t really complicated, especially given the fact that the origins of your funds become literally untraceable and undetectable.