Is it possible to anonymize funds?

Everyone who is at least indirectly familiar with the principle of operation of blockchain technology is aware that all committed transactions are recorded in a special register. Anyone can view the blockchain registry by downloading a full node to a PC.

Bitcoin mixers are specially designed so that even under such conditions, users can remain anonymous. This, in turn, increases the security of using bitcoin. Firstly, you can be sure that intruders will not be able to find you, and, secondly, it will protect you from the regulatory authorities. In the end, even if you do not commit anything criminal, you still cannot be sure that the coins you have in your account were mined honestly.

How does the bitcoin mixer work?

Bitcoin mixer is based on an algorithm that “mixes” the received coins, thus “obfuscating the tracks”. So, the mixing quality depends on the service algorithm.

Simple mixing. It works on the exchange principle. Clients send bitcoin addresses, the mixer divides the money into parts, which it distributes among the users of the service. The disadvantages of this approach are obvious: not all algorithms provide protection against getting your own money. Another factor is the presence of the mixing code associated with the transaction. It can be classified as identification information, which reduces the degree of anonymity. A good example of this scheme is BitMix allowing conducting more than 100 transactions per month, with automatic exchange and guarantee of anonymity. The service does not store transaction data; they are deleted within 72 hours after mixing.

Complex mixing. The sent funds go to the premier, where they are crushed into parts. Then the blocks are sent not to other clients, but the exchanges. The algorithm protects you from receiving your bitcoins and checking the “purity” of the received coins.

So, the higher level of privacy you need, the more serious algorithm should be.