Cryptocurrency News

What are Bitcoin Mixers and Why Exchanges Ban these Mixers

The very myth on which new traders and people seeking anonymity join forces with cryptocurrencies such as Bitcoin is that any transaction made with the blockchain as a platform can’t be traced. This is just a myth that has been debunked time after time that Bitcoin and various other cryptocurrencies are easily traceable; the very proof came on 27th April when U.S authorities did arrest the mastermind of the Bitcoin Fog, which was a darknet based crypto mixing service. The arrest of the operator was made possible after analyzing ten years of the blockchain data, which clearly debunks the myth that there is no tracking or tracing of the digital assets hovering in the air.

No superior knowledge of data forensics is required by a person who is remotely associated with blockchain systems and knows how these operate. Every transaction made clearly has an address on the blockchain that can’t be changed, and it will stay there permanently. While the notion stays that governments or other authorities can’t craft IP addresses or such from these blockchain addresses, the digital coins transferred are to end up buying products or paying for various services. This is the trail that the government officials can track, leading to the sender and the recipient.

The Bitcoin Fog was a more suitable service to be termed as Bitcoin mixing that allowed the users to mix their BTC with other various users initiating transactions around the globe, which made it practically impossible for these transactions to be traced back to a single user. This did provide a better level of privacy and anonymity that people crave but, at the end of the day, proved as impractical as any other thing used in the past by people to hide the money trail.

This process finds its drawback in the approach that the addition of multiple addresses to hide the true blockchain address can be done on the Blockchain, but all of it is taking place in a centralized environment, i.e. from a specified server or such that can easily be tracked having an IP address and all. So, if that particular location can be breached, it means that it is a game over for the mixers and people who did rely on the service to get their hand on their privacy. That is why exchanges in particular strictly ban this type of activity.

Leave a Reply

Your email address will not be published. Required fields are marked *