How Bitcoin anonymizer works

How Bitcoin anonymizer work

To truly anonymize Bitcoins, Anonymizer takes advantage of an anonymous cryptocurrency, such as Monero. In this article, we'll take a look at how Bitcoin anonymizer works.

Bitcoin transactions are not anonymous

As we have already mentioned in several of our blog posts, Bitcoin is not anonymous. Each Bitcoin transaction is permanently recorded in the Blockchain, and anyone can access this public ledger and examine all transactions, amounts, and Bitcoin addresses involved.

If any of these Bitcoin addresses are ever linked to your identity, all previous transactions related to these Bitcoin addresses could be traced back to you. Therefore, if you don't want third parties to learn about your financial operations, it is crucial to hide them. And the most common method to do so is through Bitcoin mixing or anonymizing.

How does Bitcoin mixing work

To hide Bitcoin transactions, Bitcoin mixing combines multiple payments from multiple spenders into a single transaction. By doing so, it makes it difficult for outside parties to determine which spender paid which recipient or recipients.

We can compare Bitcoin mixing to people who put their cash into the shared wallet and go shopping. While everyone will spend only the amount of money they put in the wallet, they won't necessarily use the exact bills they put into the shared wallet.

Bitcoin mixing is a convenient and affordable way of mixing equal amounts. However, it is not so great when combining unequal inputs. Let's say you send 1.2345 BTC to a Bitcoin mixer and receive the same amount back. Such flow of your coins would be easily predictable, and not even the best Bitcoin mixer can disguise it completely.

Therefore, if you're looking for a more secure method of hiding your transactions, we recommend taking advantage of an anonymous cryptocurrency, also known as privacy coins.

Anonymous cryptocurrencies

Anonymous cryptocurrencies are an anonymous alternative to Bitcoin.

To achieve the highest level of privacy, anonymous cryptocurrencies take advantage of dozens of sophisticated cryptographic methods. These include enforced privacy, stealth addresses, confidential ring transactions, ring signatures, bulletproofs, separate transaction units, IP obfuscation, and others.

The above methods keep both the sender and receiver of the transaction, along with the transacted amount, unknown.

There are dozens of anonymous cryptocurrencies. However, the most secure and sophisticated of all is Monero. The fact that Monero transactions cannot be traced or recorded has even been confirmed by Europol, the European Union's Agency for Law Enforcement Cooperation.

"Since the suspect used a combination of Tor and Monero, we could not trace the funds. We could not trace the IP addresses. Which means, we hit the end of the road. Whatever happened on the Bitcoin blockchain was visible, and that's why we were able to get reasonably far." —Jerek Jakubcek, Europol's Strategic Analyst

Doing transactions with Monero is like using a secret joint fund. Since many people have access to it, there is no way to know who made the transaction or how to trace it back to your identity.

Unfortunately, due to Bitcoin's (vs Monero) popularity, anonymous cryptocurrencies are not widely supported. However, what if we used Monero (or other anonymous cryptocurrencies) to anonymize Bitcoins?

Let's take a look at a simple yet highly effective way of anonymizing Bitcoins.

Hiding Bitcoin transactions using an anonymous cryptocurrency

To truly anonymize Bitcoins, we can take advantage of an anonymous cryptocurrency, such as Monero.

When anonymizing Bitcoins through an anonymous cryptocurrency, Bitcoins are converted (exchanged) into Monero, becoming completely untraceable and anonymous.

Once exchanged to Monero, the funds are converted back to Bitcoins. When the transaction is complete, the bond between the original Bitcoin and the new Bitcoin, anonymized through Monero, is erased.

Conclusion

Without doubt, anonymizing Bitcoins through an anonymous cryptocurrency is the most effective way of concealing the transaction history.

The only downside is the higher service fee, typically around 5%, that needs to cover both the transaction fees as well as exchange fees (Bitcoin to Monero and back).

However, if you need an extra layer of privacy, then the additional cost is undoubtedly worth it.

Tumbler.to offers both methods of anonymizing Bitcoins. You can choose a standard Bitcoin mixing or full anonymization through an anonymous cryptocurrency - Monero. Click on the buttons below and enhance the privacy of your Bitcoins instantly.