Can a bitcoin tumbler save your crypto stack?
Let’s get one thing clear from the outset – no, a bitcoin tumbler isn’t where you mix BTC with ice, pineapple juice, coconut cream, and a bit of rum.
Instead, it is an impressively powerful tool used to mask the origins of your bitcoin. Now, why would you want to do that? The answer is simple: To save your cryptocurrency stack, of course.
Here’s the deal – every year, billions of dollars worth of cryptocurrency are stolen, seized, or otherwise compromised from user wallets. Sometimes there is a big exchange, like Binance, there to swoop and save the day with an insurance fund, but most of the time, there isn’t.
To date, Binance’s #SAFU fund has covered tens of millions USD worth of losses– a mere drop in the bucket when you consider the sheer amount of crypto that’s been taken. However, there is a way to cover yourself that is proven to work every time.
Why you should protect your wallet (and your wealth)
There are a lot of prying eyes out there. Blockchains, like the bitcoin blockchain, are public ledgers that can be viewed by anyone that has an internet connection.
Think of it like having your wallet, along with everyone you’ve ever transacted with, open and on display behind a glass window along an immensely busy street. Tons of people will stop, look, and keep moving, but eventually someone is going to come back at night, throw a rock through that window, and take your wallet.
Same thing applies in the crypto world. There are hackers, cyber-criminals, and bad actors out there who know how to throw the digital version of a rock through the window. They use your publicly known, blockchain available information against you to do things as intricate as figure out your IP address, or where you stash your coins.
Once known, you’re easily susceptible to losing the crypto wealth you’ve worked so hard to accumulate. What’s more, it isn’t only hackers who are checking out your wallet.
Blockchain analysis firms have a keen interest in what your blockchain wealth is looking like. That’s because – you guessed it – they want to tax you for transactions past and present. Not only that, they also want to take your BTC if they think they’ve been used in any illicit activities past or present.
So, even if you haven’t done anything wrong, you may be holding BTC in your wallet that was once used in a crime. If so, and if an investigation leads to the BTC in your wallet, your holdings are at stake.
Defend yourself with a bitcoin mixer
Bitcoin tumblers, sometimes referred to as mixers, are a frontline defense in the fight against hackers and other blockchain sleuths trying to pry your wallet from you.
The way they operate is deceptively simple. Basically, you send BTC from your current wallet to the tumbler, then it sends BTC that didn’t originally belong to you to a new wallet address (which you specify at the start of the process).
The result? A completely broken connection between your old wallet and the new one. No matter how hard anyone tries, they won’t be able to draw a link between your new BTC and any other previous transaction. In a way, this is like hiding your BTC in plain sight. Anyone can still see your wallet if they know the address, but without being able to draw any connections to it via a trail of transactions, there is zero information they can glean from it.
Awesome bitcoin mixer startups like Tumbler.io get you from potentially traced bitcoin to anonymized BTC in a matter of a few clicks, meaning the process is simple for anyone to use. No technical or specialized knowledge needed of any kind. In fact, using a bitcoin tumbler is easier than buying crypto in the first place.
Tumbled well, tumbled often
The process of tumbling your BTC is only effective if you continually do it every time you receive bitcoin from a new address. If, like many others, you receive payments in bitcoin, then you’ll need to anonymize them in the tumbler before storing them.
Why? Because every bitcoin out there has a long history attached to it, so if you introduce them into your stable of anonymized BTC, then your wallet will easily be traceable once again, which defeats the whole purpose. If anyone sends you BTC, or if you receive bitcoin from a funding source like a cryptocurrency exchange, then you’ll need to immediately send everything over to Tumbler.io for a proper erasing the transactions history.
Think of this is a sort of housecleaning work. Not only is it a good practice, but when the stakes are this high (your entire crypto fortune), why gamble with it? Regardless of how much (or how little) bitcoin you own, using a bitcoin tumbler to anonymize it thoroughly is always advisable.
Besides, that small amount of BTC you now own might one day be worth an unbelievable amount. Therefore, investing a little bit of time and effort now to protect it might have an outsized payoff a little bit further down the road.
Using anonymous BTC
After passing your bitcoin through a mixer, you effectively have anonymous bitcoin. The best way to use it is the same as you would normal BTC.
This might be surprising to hear, especially since you may think that there is something special to do with anonymous BTC. The fact is, there really isn’t. Just use it as you would normally, with the extra advantage of knowing that your wallet is safe, protected, and untraceable.
Sometimes you may want to send bitcoin anonymously for personal reasons, in which case tumbling first is the only tried and true way to do so.
Additionally, if you want to receive bitcoin anonymously, then you can’t communicate with the sender and indicate that they should designate your wallet address as the receiving address in a bitcoin tumbler order.
Disclaimer: This article is not intended to provide financial advice or promote the use of Bitcoin and other cryptocurrencies. Its main purpose is to inform, explain, and educate. Readers must make their own decisions regarding the use of such services.