The Ergomixer is the first non-interactive, non-custodial mixer in the cryptocurrency space. There have been requests from the community to understand the mixer, why it is an important piece of tech, and why people would choose to use it.
It is my hope that I can cover these questions in a way that a novice to the crypto space can understand and comprehend.
A non-interactive application is permissionless. Everyone has the ability to use it without initiating a request. Imagine you came across someone who gave non-interactive high fives. They just walked about with their hand outstretched offering a high five to everyone they passed. This type of application empowers the user, it treats everyone the same. There are no special privileges, no compliance requirements, non-interactive applications are simply free and open to all.
The ergo mixer is non-custodial meaning at no point does another party hold an individual’s tokens. Originally mixing cryptocurrency was a service. A user had to send their tokens to a custodial party, who would then provide the service of mixing. Hopefully, the tokens that were sent were returned. As many of you know, there are often grifters who float about on social media offering all kinds of wonderful services without any intention of returning whatever you send them. Giving custody of your tokens to another party does come with risk. The Ergomixer eliminates that risk.
These are two principles of true decentralization that I would recommend to everyone in the cryptocurrency come to recognize, understand and use.
Why? Because these types of applications protect you, the user.
In time any token on the Ergo blockchain will have the ability to be mixed. The first token that was mixed through the mixer beyond Ergo’s native token was SigmaUSD. This is really an exciting accomplishment, especially given there is a Dex in the process of being developed on the Ergo Blockchain.
Any coin that will be listed on Ergo’s decentralized exchange will have the capability of being mixable. I am sure the development of that will take some time, however, it suddenly gives privacy capabilities to tokens that have no privacy features.
Suddenly users may be able to mix a variety of stablecoins and assets.
Why Might I Want to Mix Tokens?
The UTXO model of account is similar to cash register accounting. Simply stated, a deposit is made, amounts are combined, and change is returned.
If you go to a local shop and pay in paper currency, the cashier does not have the ability to look into your wallet. Perhaps they may peek inside from a distance and try to gauge the amount that you are carrying, however, you have a certain element of privacy in the transaction.
In the basic UTXO model of accounting, this transaction is not private. While it may be extremely difficult to connect the wallet and the user, the amount held is stored. This information is not simply available as if a cashier is trying to catch a momentary glance, that transaction is stored for all to see and is auditable at any point in the future if someone has the transaction information.
The Ergomixer is a way to send tokens and potentially conceal both sides of a transaction.
Practical Example for Senders
Imagine a user wants to place a bid on the latest NFT at the Ergo Auction House.
A bidder may want to conceal their wallet information for a variety of reasons, for example, they may have a limited budget and not want that information broadcast to their competitors.
They may be transferring money into the future Decentralized Exchange and want to conceal their total balance from other traders. Perhaps they have a large position and believe other traders may try to take advantage of knowing a large sum is inbound.
There are many practical reasons why parties making an exchange may want to conceal their financial decisions. We do this all the time.
In truth, this is no different than the privacy features of cash.
You can go into a store, take out a 10, and ask for two 5’s... You have just mixed money.
There is a reason why people do not go about in their daily life with all of their net worth on their person. In reality, it is common sense. On a blockchain, it is often associated with some nefarious intent.
Cash is fungible, interchangeable, mixable. We have accepted that as normal. I hope that in time the perception of mixing on a blockchain is as acceptable as the same properties we see with physical currency.
The truth is the majority of criminal and illicit activities occur in physical fiat currency. However, this has never been a legitimate justification to outright ban the use of fiat currencies.