Bitcoin Forum

What are some legitimate uses for mixing your coins? If you have done this who did you use and was it quick and safe to do?

I haven't used any of those mixing services.
Instead I send my bitcoin to exchanges and casinos and withdraw the bitcoin some time later.

What is the point of that action ?

I've never used mixing services, but thre is a mixer that has signature programs, like bitmixer.io

It deppends about what level of anonimity you want. You can use casinos and exchanges as mixers, but there are withdraw fees and limits, and also they will store your data, so it is not recommended if you want hide from someone with power or from law.

There are some mixers on Tor that the legends say the Dark Web guys use, but I guess most of them are scams.

Your own privacy is the main legitimate use. People use exchanges (though exchanges aren't in love with this unless they charge withdrawal fees), any other service that allows deposit and withdrawal like gambling sites, and there are specific mixing services. If you chain a few of them together through users you created over TOR, that should acheive about the best anonymization that you can get.

Thing is, you'll always want to be mindful of what information you're sharing when you spend and which unspent outputs (if more than one) are being combined. When funds sent to more than one address are sent in the same transaction, this typically links those two addresses as having been controlled by the same sender. Coinjoin attempts to weaken that linkage. Basically you can be as anonymous as you want according to the amount of work you want to put into it.

Financial privacy is basically the same thing as trying to be anonymous though you don't have to be as rigorous.

The legitimate use is for anonymity, though I don't know why people would care that much if they're legit. I personally wouldnt trust most of these sites. It seems like you're just asking for them to take your coins,.

You can use it to mix before using it to buy something online, so that they won't link the BTC address with your name and address.

I would not trust these services any of my coins, it is no guarantee that you can get them back.

To increase the anonymity. The purpose of Bitcoin is to make payments without revealing your actual identity. However, the public ledger will record all the transactions and if you do something which you do not want anyone to know, there is a chance the coin will be traced back to you. The coins will be mixed by them sending a bunch of coin which have no connection with your previous output, therefore, no one can trace the coin back to you.

I think https://bitmixer.io/ (https://bitmixer.io/) is doing that.

Coinjoin still leaves taint though and is not untraceable.

Most of the good mixing services are on the deep web. You'll have to ask around on there to get a good idea.

Mixing services are in a business to make money. They charge high fees and make a whole lot of it (money). If a service has a good reputation, they're not going to ruin it to steal a couple BTC.

Remaining anonymous or just wanting to preserve your privacy. It is no ones business where I got my coins from and also no ones business where I decide to spend them. Due to the blockchain, transactions are traceable (which is a good thing, it holds up the integrity of Bitcoin) but it lowers your chances of remaining anonymous... For this mixing services are a great thing!

If you want to buy a good but dont want it to be traced back to you. Doesnt have to be illegal..

Only mixing service I would use is bitcoinfog, they still can't be trusted 100% but it's the only one I'd feel comfortable sending larger amounts of btc.

Yeah, but please read the initial question. The post didn't ask about what mixing services to use, but rather about legitimate uses of those services apart from the obvious illegal ones, where you don't want your coins to be traceable!

Do you even need to use a mixing service for this? You could probably just send it to a bitcoin gambling site and then instantly withdraw it again.

I don't want people to know how many coins I have. If I send people coins from a big wallet or even an address that's being fed from a big wallet, they'd immediately know how much money I have! I just don't want people to know about that, it's not illegal to keep that for yourself! :)

That's generally not worth a 1%+ fee. Just use multiple addresses.

Yeah, true. However, most gambling sites keep a log of deposits and withdrawals. If they are contacted by the authority, they can hand over your original address and IP address. It is easy to know where it's from since most gambling site have a centralised wallet or a cold storage. Some coin mixers does not keep a log of your information and you can remain anonymous.

Technically, if you reside in the US, then it is illegal under certain circumstances. Since Bitcoins are now subject to capital gains tax, then attempting to obscure your identity and/or your Bitcoin holdings with (or without) the intent of doing so in order to avoid paying tax is a legal, and possibly criminal, issue. According to the rumor mill, England and some parts of Europe might soon start taxing them as well. In the vein of this discussion, hiding one's wealth is indeed one of the primary reasons why people subscribe to coin mixing solutions, but saying that it's not illegal is not an acceptable defense if and when the government contests your reasoning.

That's really only an issue when cashing out or buying things, though. If you report that, you're not doing anything illegal but obfuscating your trail.

Use tor or a proxy. It'll still be pretty difficult to trace it back to you if you;re careful.

It really depends upon whether or not your BTC has ever not been anonymous. If you always use proper anonymization techniques for yourself and your own IP address and never connect your own personal info to your BTC, you're pretty much home-free. Even if they can trace it, they can't trace it to you.

I really dont understand whats the point of that? Just not to be traced or is there something else? Can someone explain in details?

Probably because they have so many bitcoins that they don't want to be traced to avoid taxes etc.

What if you're using proxies in order to mask your tracks or appear to come from another country? I think it's rather simple to appear to be anonymous on the Internet! It would also be interesting to see which Casinos / Dice sites really are going to cooperate with the law enforcement authorities!

If they give the authority the send address, you must have bought it from somewhere. It can be traced back to the owner if the casino releases the information. This is possible for the casino owner to not comply with the authority but they may be forced to shut down. If you bought it from the exchange, the authority can easily ask them for identity verifications and identify you.

Woah, really? Wow, didn't know that. Good thing, I'm not located there :D But thinking about it, from the side of the IRS or something, this makes a lot of sense. It is a suspicious behavior! Maybe the current rules and regulations just aren't made for Bitcoin and shouldn't apply!

But what if the authorities can't get hold of the casino owners? Some are operating from an obscure servers located on tropical islands or use various proxies themselves! It's not as if they're registered companies, to begin with :-/

Just set up three or four wallets and send the money through.
Yes they can trace it but no they cannot prove you owned the intermediate accounts.
You can then always say you bought them through localbitcoins.
Or sell your coins through localbitcoins.

Or

Create account on BTC-e using proxy or so.
Put money into account.
Trading to LTC or another shitty altcoin.
Send money to another trading site.
Trade back to BTC.
Put into your account.

Obviously the most legitimate use for Bitcoin mixing is to conserve privacy and improve safety for some people/companies that deals with large amount of BTCs, on the other hand, these services are most likely to be used for money laundry and for criminal activities, and this why in my opinion such services should include a service to survey and block any funds that were flagged such as in the case of the guy who lost over 1K BTC