Now, you might ask whether such a service is necessary. The answer to this is the fact that Bitcoin's Blockchain is in the public domain. Additionally, all of the transactions recorded in the Blockchain are publicly accessible.
Because of this, it is relatively easy to track someone's financial transactions, if you know their wallet address, or addresses.
Now, you might argue that the only people who need to stay anonymous are hackers or criminals. However, this is not true.
Do you publicly display your bank records? The answer is no. Just like with your bank transactions, there are lots of reasons to keep your Bitcoin transactions private.
Regardless of your reasons, privacy is a fundamental right, and tumblers are a useful tool for preserving your privacy.
What is Bitcoin tumbler
Bitcoin tumbler (also known as a Bitcoin mixer) is a service that mixes cryptocurrency funds. By doing so, the likely identifiable cryptocurrency, and especially, the trail that leads to the original funds, get concealed. The goal of a Bitcoin tumbler is to increase the anonymity of cryptocurrencies.
All Bitcoin transactions are stored and openly accessible via the public ledger, known as the Blockchain. When you use Bitcoin to pay for goods and services, you usually need to provide your credentials, including name and address, to the seller. By doing so, the third party will be able to trace your previous transactions, including transacted amounts.
And this is where Bitcoin tumbling services come handy. They operate on a simple mechanism of splitting your coins into several parts. These parts are further mixed with other broken parts from other clients. Even though the concept seems complicated, the entire mixing process is relatively easy (and fast) to execute.
How Bitcoin tumbler works
Typically, Bitcoin tumbling involves using a dedicated service. The service, referred to as Bitcoin tumbler, Bitcoin mixer, or Bitcoin shuffler, helps to break the connection between the wallet address that is sending the coins and the address, or addresses, that are receiving the coins. Simply said, Bitcoin tumbler is for anyone who does not want the public to know the source or destination of their coins.
After using the mixing service, the link between your wallet address and the address that received your funds gets eliminated.
How to tumble Bitcoins
To tumble your Bitcoins, we advise you to use the anonymous Tor browser and an anonymous Bitcoin wallet.
The most secure way is using an anonymous operating system, such as Tails, that routes all of its (internet) traffic through the Tor network. Additionally, Tails has a built-in Bitcoin wallet app called Electrum, that keeps all your transactions private, and routed through the anonymous Tor network.
Once you are correctly set, follow these steps:
1. Prepare coins you want to mix in your original Wallet #1.
2. Create a new, anonymous Wallet #2.
3. Transfer your coins from Wallet #1 to Wallet #2.
4. Create a new, anonymous Wallet #3.
5. Open your favorite Bitcoin tumbler in a Tor browser and initiate the mixing process.
6. When Bitcoin tumbler asks for a wallet, enter the address or addresses from Wallet #3.
7. Send the coins from Wallet #2 to the address that the Bitcoin tumbler generates for you.
8. Now, you will need to wait for the Bitcoin tumbler to process your transaction, and send you the mixed coins back, reduced by the service fee.
To increase the anonymity of the mixed coins, we recommend using several Wallet #3 addresses, mentioned in step 6. Additionally, if your Bitcoin tumbler supports it, we recommend using higher mixing delays, configured in step 5.
The only weak point is that the mixing service has records of your mixing transactions. Most services delete the transaction logs shortly after the completion of a transaction; however, it is also possible some mixers keep the trace of the mixing operation. To negate this, you might use another Bitcoin mixing service.
Popular Bitcoin tumblers
There are various Bitcoin mixing services on the market today, each different in their way. Below, you will find the most popular Bitcoin tumbler services we know of. Except for Tumbler.to, that offers an extra layer of anonymity, most Bitcoin mixing services below are very similar in features.
1. Tumbler.to - our very own Bitcoin mixing and anonymizing service. Besides standard mixing, Tumbler.to offers a unique feature to anonymize your Bitcoins entirely by using a dedicated privacy coin — Monero.
2. BitMix.biz - is a popular mixing service. They work by mixing your coins with other deposits, returning you completely new, clean coins.
3. BitcoinLaundry.com - is a popular choice among Bitcoin users that prefer low fees and a friendly user interface. Bitcoin Laundry charges a meager service fee; however, they do make money from donations.
Is Bitcoin mixing necessary?
There are several reasons as to why to mix your Bitcoins. If you use darknet markets, using a mixing service is a must. For everyone else, Bitcoin tumbler is a handy tool for protecting one's privacy.
New tools to track Bitcoin transactions are continuously developed. Even though most of them are still available for financial institutions and government agencies, soon, they might be open to the broad public.
Therefore, if you don't want third parties, such as employers, store owners, or criminals, to learn about your Bitcoin transactions, spending habits, and account balances, then using a Bitcoin mixing service will soon become a necessity.