Blockchains are generally described to be publicly accessible blocks of data that are readable and verifiable. This means that every transaction that has occurred can be tracked by everyone in the explorer. The flow of funds can be traced. With this nature, the blockchain is deemed immutable and secure as no transactions can be virtually tampered with. But what there is a way to bypass the blockchain as a tracking tool. What if there is a way to confuse a third party as to where your funds transfer began and ended? This is where Bitcoin Mixers come in.

Due to whatever reasons, there are some users that aren’t comfortable with the fact that the public could know how their BTC funds were transferred from point A to point B. Hence, they make of  tools coined as Bitcoin Mixers. These tools basically put the funds to be transferred into a general pool of funds before transferring it to the actual desired destination.

For example, Alice wants to transfer 10 BTCs from Wallet A to Wallet B. However, she wants this transfer to be untraceable. She then used a Bitcoin Mixer platform to perform this transaction. When she accepted the transactions, the 10 BTCs went from Wallet A to Wallet X, then to Wallet C. Wallet X is a large pool of funds, coming from different users. The 10 BTCs are mixed with several other funds, making it difficult to know if the funds that went out from Wallet X to Wallet C are the exact funds from Wallet A.

To make it even more untraceable, some platforms offer extra features. A mixer could have multiple wallets or pools of funds, where the user can choose to make the funds hop through different pools before landing into the destination wallet. A time delay could also be deployed in order to increase untraceability.

Caveats

Although Bitcoin Mixers confuse the public as to who transferred which, there are still instances where the amount transferred is quite distinguishable from the rest. For instance, sending a $123 is more susceptible to being traceable than sending a $100. There are more chances that more people send $100 than $123, which makes the transaction more well-”mixed” with others.

Also note that the mixer is a third party, sending funds through this middle-man means that there is a moment when your funds are out of your custody and the custody of the destination wallet. There is a moment when the middle man owns your funds. This entails the risk that some hack or error in the mixer’s code could affect the funds you have inside of it.

Use Cases

Some are just shy, but some have hidden motives. Since it promotes anonymity, it is often used money-laundering or tax evasion. However, not all motives are evil. There are times when large investments for corporations have to be kept private. Some transactions must also be kept from the government for the sake of being protected against regulations against decentralization. Having an additional layer of security could also be a reason enough to use mixers. Some notable platforms that you could visit to try on this feature are the following: Wasabi, Samourai, JoinMarket, and Blindmixer.