Crypto mixers, which are more commonly known as tumblers, have recently made the spotlight. This newfound popularity is most likely due to the recent Interpol bust of Bestmixer.io.
Crypto mixers are basically an anonymity tool. Its main purpose is to transform transactions of non-private coins to private ones. This is achieved by mixing crypto funds together, making it near impossible to locate the funds’ original source.
The raid on Bestmixer.io was initialized due to reports claiming that the platform was laundering dirty money. Many crypto stakeholders were not pleased by Interpol’s raid. They thought that the entire government operation was a huge overreach by government agencies.
Dutch law enforcement took down a mixer today and apparantly charged them with money laundering. I find this a very worrying precedent, because mixers are currently the only tool to mitigate Bitcoin's poor on chain privacy. This action puts lives at risk. https://t.co/fcxj9kMhys
— Sjors Provoost (@provoost) May 22, 2019
Vitalik Buterin purposed that an on-chain crypto mixer is a viable alternative. He believes that the biggest issues lie with the governments’ fixation on anonymous crypto operations. An on-chain anonymity feature could be the solution for users preferring to keep their transactions anonymous.
Even though anonymous transactions are often tied with cryptocurrencies, most blockchains aren’t really anonymous. The fact that crypto transactions do not need a third-party, should not be mistaken with actual anonymity.
Usually a person sending a transaction has to go through a bank. The bank gets to know the identities of both participants and if needed it can and will provide them to government agencies. Crypto transactions do not require the people initiating the transaction to know their identities. The transaction however, is still very much visible to other blockchain participants.
There are many public addresses which belong to crypto exchanges and other major stakeholders in the industry. These addresses are known to many people in the crypto community and are evaded like the plague.
Crypto mixers are completely necessary in our time
Crypto mixers come into play because not everyone who wants to remain anonymous, prefers to use privacy coins. When the source and destination are obscured following the money becomes incredibly difficult.
Crypto mixers are also used to remain anonymous while receiving from platforms that have KYC protocols. Users are usually required to have more than one disposable crypto addresses, which are more commonly known as temporary wallets. The mixing process never takes more than 6 hours and these platforms usually store information for about 24 hours.
Needless to say, the government doesn’t really like privacy and anonymity. Whether or not Bestmixer.io was laundering dirty money remains to be seen. According to the authorities, investigation into the company began back in June 2018. Europol also shared the gathered information with many other law enforcement agencies.
Within the 10th section of bitcoin’s white paper, Satoshi Nakamoto discusses the issue of privacy. Crypto enthusiasts naturally hold privacy and anonymity as very valuable qualities. So, there is nothing wrong with developers working on censorship resistant platforms which will allow for truly anonymous transactions.
You can also check out:
- Coinbase Custody Already Has Over $1.3Billion AUC: Aims Higher - Jun 17, 2019
- CENTRE Consortium Expanding: More Members Gain Access to USDCs - Jun 14, 2019
- Bitcoin Theft has to be Answered Personally by Craig Wright - Jun 13, 2019
- Blockchain-based Tools to be Used After Improvements from Microsoft - Jun 12, 2019
- CCN Shutdown and The Inevitable Surrender to Google’s Power - Jun 11, 2019
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