While cryptocurrency addresses are usually pseudonymous, they can frequently be linked to real-world actions and individuals.
When creating an account on an Exchange users need to identify themselves via a KYC (Know Your Customer) procedure and when they decide to withdraw their tokens, the exchange operators will have access to the users’ private information.
Furthermore, Companies like Chainalsysis and Cyphertree specialize in blockchain forensics to trace transactions and wallets back to users utilise advanced methods that can be used to link people to a public address.
Who uses mixers?
In order to provide users with more privacy and ensure transactions are harder to trace, mixers allow their users to send their tokens into a batch of transactions from several other users and mix them all together. The goal is to guarantee that the transaction from “address A” to “address B” is not as traceable as it could be through a direct transaction.
Each mixer has its own features and service fees, depending on reliability or trust and in this article we will discuss the TOP Mixers of the market, as well as their pros and cons.
Current top mixers
MyCryptoMixer has gained popularity as a trusted and user-friendly platform. Although they only support Bitcoin and Ethereum at the moment, there are plans to expand to other cryptocurrencies based on its community feedback. Self-nominated as a “People-First service provider, they are constantly looking to innovate and provide for the changing demands of their users.
Disantavages: Only BTC and ETH supported;
BitMixer is a mixer that requires little to no personal information, not storing any users data, thus increasing their privacy. The platform provides tools to calculate the exact fee they will be paying for each transaction, and it ensures the process occurs as smoothly as possible.
Advantages: Anonymity, user experience;
Disantavages: No ETH supported;
ChipMixer is a unique tumbler that works somewhat uniquely. The service has wallets with chips that range from 0.01 BTC to 8.192 BTC which can be split and merged according to the holder's needs. Since the mixing is performed by the user, there are no standard fees and the customer decides what the amount is they want to donate in exchange for the service provided.
Advantages: Anonymity, fees, the “chip” method;
Disadvantages: Only supports BTC;
CryptoMixer began offering mixing services in late 2016, built from the ground up with inputs from the Bitcoin Community. It has a reserve with over 2,000 coins allowing almost instant tumbling, thus improving the traceability to a minimum. All data about any transaction is deleted in 7 days. The provided CryptoMixer code ensures that every coin which has already been cleaned on the platform is reserved and marked to prevent it from returning to the customer’s wallet again.
Advantages: Anonymity, no-log policy, affiliation programs;
Disadvantages: Only supports BTC;
MyCoinChain has a massive reserve of 200 coins, offering mixing services to everyone for only 2% fees. The reserve guarantees that the user never has to wait more than 30 minutes to send their coins. MyCoin offers an exchange service for Bitcoin, Ethereum, Litecoin, Bitcoin Cash and Monero.
Advantages: Supports various cryptocurrencies, fees;
Disadvantages: Registration Required;
Why choose the ErgoMixer:
Σ–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.
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.
How does it actually work?
Understanding the full operation of ErgoMixer requires a fairly in-depth grasp on cryptography, but the base concept is fairly simple. Participants send coins to a pool, and these can be spent by any different members. The protocol ensures that it is impossible to know which member spent them.
Let’s set a quick example. There’s a pool with coins that can be spent by the individual “A” or “B”. Any of them can sign a transaction and move the coins, but no external observer is able to know exactly which one did it. The fact that this process is repeated over and over again with multiple users makes it impossible to trace them, while at the same time the coins never left the control of their original owner, making it a risk-free process.
In conclusion, ErgoMixer is revolutionizing the mixing industry, guaranteeing that there is no risk of lost funds and that no transaction can be traced.
How do I use it?
Luckily you don’t need to be a cryptographer to use the mixer either. For Mac and Windows users, there are compiled programs that you can download and run which are available in the releases section on GitHub. You can of course also build from source or run the .jar file directly.
When you open the Mixer, the home page displays information about the system and how each component works. ErgoMixer will also be available from your menu bar.
The mixer only mixes while the application is running - however, you can close to pause mixing at any time, covert addresses will also work fine and start mixing when you launch the application.
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. Simply set up a new mixer for some erg, do not set a withdrawal address (otherwise your mixed erg will be withdrawn) and once the mixing is complete - you can convert it into either SigmaUSD or SigmaRSV on withdrawal.
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.
Covert addresses allow you to set up an address to receive tokens to - these tokens will be automatically mixed when you launch the program. Future improvements on the horizon is adding the ability to allow users to create a covert address that automatically receives ERG and mixes SigUSD/SigRSV.
Practical Example for a 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.