Why is it important to use a bitcoin mixer?
The amount of traceable personal data given away for free by cryptocurrency users is astounding. On a per click basis, the best crypto exchanges such as Binance, Gemini, Coinbase, and Huobi are taking your sensitive data, then passing them onto third parties and law agencies.
That’s why it is crucial to use a bitcoin mixer if protecting your privacy is a concern. When talking about crypto privacy, what is of concern are details such as your identity, financial status, and even your credit card information. So, if you care about keeping such details on a need-to-know basis, then read ahead for why using a bitcoin mixer is a must in today’s crypto environment.
Bitcoin mixer explained
The idea behind using a bitcoin mixer is simple. In a nutshell, a bitcoin mixer breaks the connection between your old wallet (which has ties to your identity), and a new wallet where your coins go after being mixed.
Think of it this way. When you buy bitcoin using Coinbase, you’ve got to enter a plethora of KYC (know your customer) data, submit photos of your ID, and enter bank account or credit card details. That’s enough information to thoroughly sink you if it was ever lost or sought after by malicious hackers or over-reaching lawmen.
The solution to buying bitcoin but using it anonymously is to send your crypto exchange-purchased BTC to a bitcoin mixer.
A bitcoin mixer:
- Takes your easily traced BTC
- Mixes them with others in the pool
- Make them untraceable
- Sends anonymized BTC to your pre-designated wallet address
This process effectively breaks the link between your old potentially traced BTC and your new anonymized BTC.
Once the anonymized bitcoin arrives at your new wallet address, you can begin sending bitcoin anonymously without worrying about the new recipients — or any onlookers — being able to check on your entire financial history.
Blockchain is not anonymous
What’s that, you ask? People can see your entire financial history on the blockchain? The answer is a resounding yes. A common misconception in the blockchain space is that blockchains like bitcoin are anonymous. The unfortunate, though very important to realize fact is that they are certainly not.
Blockchains are public ledgers meant to keep a transparent record of transactions going all the way back to the original transaction. This forms a huge chain of events that is immutable. Once your transaction is recorded to the blockchain, nothing can be done to erase it.
For some, that fact may settle well — while for others, the idea of having their financial activity made permanently public is probably a bit unsettling. Additionally, because all transactions are in the public domain, your wallet balance is as well. With the click of a button, anyone can see entire net worth, along with you’ve sent to and received from.
Regardless of what your purposes for using blockchain are, the likelihood that you’re comfortable with these levels of sensitive data sharing is low. That’s why using a bitcoin mixer to get a fresh start on the blockchain is not only important but also vital for those concerned with their privacy.
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.