Cryptocurrency mixing services do more harm than good to blockchain technology

[thesmallgod]

A mixer (or tumbler) blends various types of theoretically recognizable cryptocurrency. This increases transaction confidentiality, because it allows tracing bitcoin difficult. The owner of Bitcoin sends the money to the mixing machine, exchanging it with that of other users and sending the combined cash to the requested address, ensuring there is no relation between the initial transaction and this address. Settlement sums should be chosen arbitrarily and the settlement consists of several tiny partial payments distributed over a longer period of time.
Such services are widely used by scammers such that they do not get traced.
Do you think mixing services are harming the adoption of the technology ?

[pooya87]

Such services are widely used by scammers such that they do not get traced.

have you performed any research and came up with statistics that told you scammers are using these services or is it just your personal guess?

Do you think mixing services are harming the adoption of the technology ?

no, but i am more curious to know why you think they are doing "more harm than good" since you only explained how the mixing process works and forgot to come to a conclusion that you placed in your title.

[mocacinno]

It's not because a service gets used by scammers that it does more harm than good...

I use mixing services all the time to protect my family and myself against a $5 wrench attack...

[mk4]

Such services are widely used by scammers such that they do not get traced.
Do you think mixing services are harming the adoption of the technology ?

Because only hackers and scammers need privacy, right? Because who doesn't want getting their funds to get tracked? /s

Technology in general will be used for both good and bad purposes. It's been the case throughout the history of existing technologies.

[so98nn]

It's not because a service gets used by scammers that it does more harm than good...

I use mixing services all the time to protect my family and myself against a $5 wrench attack...

In short it's exactly the opposite to what OP says. Mixing services are for the sake of securing attacks from scammers and not the way around it.  

With few of the exceptional services , most of them could harm your fund though, by claiming their genuinely services and at the end engulfing your fund to their wallets. Now I would say that is the harm a bitcoin mixing service could do with the help of blockchain.

Also in the very beginning, the sole purpose of blockchain itself is integrity of transaction/data. If we add up more complex algo to do a transaction over it then it doesnt mean its harming the blockchain at the end.

[Oyarebu]

Come to think about the fiats, is your fiats not be used for ML?, Why are those scammers printing fake currency notes to scam others?, C'm-on, you should understand that, no matter the technology scammers and hackers will always find their ways around for their personal gains(for their safety). No harm from mixer as I could see!....

[davis196]

A mixer (or tumbler) blends various types of theoretically recognizable cryptocurrency. This increases transaction confidentiality, because it allows tracing bitcoin difficult. The owner of Bitcoin sends the money to the mixing machine, exchanging it with that of other users and sending the combined cash to the requested address, ensuring there is no relation between the initial transaction and this address. Settlement sums should be chosen arbitrarily and the settlement consists of several tiny partial payments distributed over a longer period of time.
Such services are widely used by scammers such that they do not get traced.
Do you think mixing services are harming the adoption of the technology ?

It's no secret that mixing services are mostly used by scammers.What's weird about them,is that most mixing service websites state in their Terms of Service that using the mixing service for illegal purposes is not allowed,even though we all know for what purpose those services are being used.It's like giving a bottle of whiskey to an alcoholic and saying "Don't drink the whiskey!"  
BTC mixers are going harm to the BTC community in two ways:
1.By creating a bad image of Bitcoin as a scammer/criminal friendly cryptocurrency.
2.By scamming people and stealing their coins.

[bitmover]

Such services are widely used by scammers such that they do not get traced.
Do you think mixing services are harming the adoption of the technology ?

You cannot ban a legit service because criminals/scammers use them. This is censorship, this is how dictators think. Scammers will always use legit services.

Scammers/criminals should be hunted by the authorities without harming honest people.

Criminals use cars to run away from the police. Let's ban cars as well?

[ranochigo]

Cryptos in general are designed to help to create a decentralised currency such that they are inherently harder to trace and are better able to preserve the privacy of users. Mixers are just a way for users to better improve their privacy and that is totally reasonable.

It's foolish to assume that all of the users of mixers are engaging in illicit activities and it is also unreasonable to stop crypto mixers just because a portion of its users are doing something illegal. Fiat is also often used to commit crime and no one has the intention to dump fiat and adopt some other currency.

[thesmallgod]

Cryptos in general are designed to help to create a decentralised currency such that they are inherently harder to trace and are better able to preserve the privacy of users. Mixers are just a way for users to better improve their privacy and that is totally reasonable.

It's foolish to assume that all of the users of mixers are engaging in illicit activities and it is also unreasonable to stop crypto mixers just because a portion of its users are doing something illegal. Fiat is also often used to commit crime and no one has the intention to dump fiat and adopt some other currency.

It is obvious you don't read  what I posted there. I'm not assuming that all users of mixers are scammers. If you see it in my post you can quote it. It is no more news that many blockchain projects are easily turning to scam and one of the way those scammers run totally with such funds is to use mixing services. Such case is what was posted here https://www.financemagnates.com/cryptocurrency/news/plustoken-wallet-moves-13k-btc-to-mixer-another-sell-off-imminent/

[mocacinno]

Well, it's all pretty simple... Bitcoin is a system to transfer wealth. Just like cash or gold.

When i was young, you could buy all kind of illegal drugs at the gate of our school using fiat, mind you, this was many, many, many years before satoshi published anything even remotely related to bitcoin. Still, my mother forced me to go to school and she gave me pocket money every month (which I used to buy weed).

It was known that if you wanted to avoid taxes, your had to bring your "black market money" (money you made by doing jobs for which you didn't pay any taxes) to luxembourg. They accepted your cash without questions, gave you a high interest rate and they didn't communicate with other governements for tax fraud purposes. Still, most transfers were completely legal.

It was known that certain shops in certain city's took in stolen money and "black market money" and laundered it. Still, an average person like me could visit these shops and buy a newspaper (or whatever they sold)

There were jewelers that took in stolen gold, melted it down and poured it into legal-looking forms. Still, an average person like me could walk into these shops and buy a wedding ring for his wife.

That's just the way any system to transfer wealth works. It's mostly used for good, but it can also be used for bad. No need to ban all banks, all shops and all jewelers. No need to close the schools or burn all fiat money. Just find the drug dealers, money launders and other criminals and punish them accordingly.

Mixers serve a very good purpose... They protect not only my privacy, but also my family's well-being. I depend on services that take crypto currency that can be linked to me and in exchange give me a slightly smaller amount that cannot be traced back to me.
I know many, many other completely legit people that do not posses a single satoshi in their private wallets that hasn't been mixed or coinjoined.

I do agree that if you ever found a system to transfer wealth that could never be used for any illicit activity, it would have a better image than any "other" system to transfer wealth (like fiat, gold or bitcoin). But i don't see this happening anytime soon.

[ranochigo]

It is obvious you don't read  what I posted there. I'm not assuming that all users of mixers are scammers. If you see it in my post you can quote it. It is no more news that many blockchain projects are easily turning to scam and one of the way those scammers run totally with such funds is to use mixing services. Such case is what was posted here https://www.financemagnates.com/cryptocurrency/news/plustoken-wallet-moves-13k-btc-to-mixer-another-sell-off-imminent/

I actually did. Apologies if the way I phrased it sounded like I was implying that you're the one assuming that mixers are only used by scammers.

Point still stands. I don't believe 13k Bitcoins is a huge amount, relative to the amount of Bitcoin mixed regularly. Scams are bound to happen and mixers only helps to improve the privacy. If anything, this would just be a good indication that it is hard to trace Bitcoin and that privacy would be improved with the use of mixers. It could provide a justification for the government's resistance but it would be beneficial from a consumer stand point. Standard Chartered (and various other major banks) had a huge money laundering scandal and it doesn't seem to have affected the consumer market that much.

[DarkDays]

It is my personal opinion that mixing services do somewhat facilitate the cleaning of illegitimate funds, I don't think anybody would argue against this.

It may not be the absolute biggest use case for mixers, but I would guess that at least 20% of their activity comes from people trying to improve the fungibility of their assets because they're from dubious sources.

I'm not a fan of them in general either. I think there should be on-chain privacy features that don't require the use of a "trusted" third party like mixers. Understandably, most of these mixers have an anonymous team, but that also means they can run off with funds without a hitch if they chose to. This makes it very difficult to trust them.

I think we simply need some way of performing a trustless atomic swap between cryptocurrencies like BTC and XMR, then we can cut out these middlemen programs and avoid the risks that come with them.

[cryptomaniac_xxx]

Let me leave the quote here of one of the most successful tumbling services, even preceding Chipmixer.

Hi all!
Despite the huge profit we earn, we are closing our activity. Let me explain why.

I'm bitcoin enthusiast since 2011. When we started this service I was convinced that any Bitcoin user has a natural right to privacy. I was totally wrong. Now I grasped that Bitcoin is transparent non-anonymous system by design. Blockchain is a great open book. I believe that Bitcoin will have a great future without dark market transactions. You may use Dash or Zerocoin if you want to buy some weed. Not Bitcoin.

I hope our decision will help to make Bitcoin ecosystem more clean and transparent. I hope our competitors will hear our message and will close their services too. Very soon this kind of activity will be considered as illegal in most of countries.

Cheers,
Bitmixer.IO

I think we can surmise what can be the answer to the OP's question.

[alani123]

Bitcoin can be used for various things. Much like cash. Because bitcoin can be used for illicit activities, should we ban it?
Do you think that there aren't legitimate uses to mixers? Freedom of choice is an important aspect of money. You can't just ban certain uses of money and expect that to be followed.

What's good and bad can be determined with several thought processes. Not all are as objective.
But in terms of causing harm, I think mixers do little harm to other parties. They are not dangerous or violent towards others for example. They're just a tool to offer more frangibility to non-anonymous blockchains.
The harm isn't done by these services. Its maybe by some of their users. But that doesn't mean the services are at fault.

[yazher]

You forgot to research another story about it which Cryptocurrency mixing services will give more secure transactions for holders and will make their transaction untraceable because there are lots of people out there who had been a victim by those evil people who only exist to steal other peoples money. With the help of Cryptocurrency mixing services, they can prevent this kind of act. for your information, you can see some people who fell victim when evil people traced them. check this link: https://github.com/jlopp/physical-bitcoin-attacks/blob/master/README.md

[o_e_l_e_o]

Such services are widely used by scammers such that they do not get traced.

It's no secret that mixing services are mostly used by scammers.

Except those statements are categorically not true.

An analysis of mixers was performed by Chainalysis last year, who are probably the biggest blockchain analysis company in existence and are used by some of the biggest players in the space such as Binance and Bitstamp. Unfortunately, the webinar presentation of their findingss has since been taken down, but you can still see their findings reported in multiple news and blog sites such as here: https://bitcoinmagazine.com/articles/chainalysis-most-mixed-bitcoin-not-used-for-illicit-purposes

They found that only 8% of coins being mixed were stolen or otherwise illegally obtained coins. By far the most common source of coins being mixed was directly from exchanges, meaning mixers are most widely being used by average bitcoin users trying to reclaim some of their privacy from the ever more invasive surveillance performed by centralized exchanges.

[stompix]

The owner of Bitcoin sends the money to the mixing machine, exchanging it with that of other users and sending the combined cash to the requested address, ensuring there is no relation between the initial transaction and this address. Settlement sums should be chosen arbitrarily and the settlement consists of several tiny partial payments distributed over a longer period of time.

Hmm, I wonder how much you've studied mixers before saying that, also curios if this is not some translated text since I have no idea why you used the term cash..

It's no secret that mixing services are mostly used by scammers

Proof?
Using a mixer makes me a scammer?

What's weird about them,is that most mixing service websites state in their Terms of Service that using the mixing service for illegal purposes is not allowed,even though we all know for what purpose those services are being used.It's like giving a bottle of whiskey to an alcoholic and saying "Don't drink the whiskey!"   

Nope, it's like giving a bottle of whiskey and asking the guy not to drink and drive, not to hit somebody else with the bottle, not to pour the whiskey on somebody and light them on fire...

2.By scamming people and stealing their coins.

Hmm, so are you accusing a certain bitcoin mixing service of being a scam and stealing clients coins, or am I missing something?

[kryptqnick]

A mixer (or tumbler) blends various types of theoretically recognizable cryptocurrency. This increases transaction confidentiality, because it allows tracing bitcoin difficult. The owner of Bitcoin sends the money to the mixing machine, exchanging it with that of other users and sending the combined cash to the requested address, ensuring there is no relation between the initial transaction and this address. Settlement sums should be chosen arbitrarily and the settlement consists of several tiny partial payments distributed over a longer period of time.
Such services are widely used by scammers such that they do not get traced.
Do you think mixing services are harming the adoption of the technology ?

I thought you'd actually provide some evidence that the technology is being harmed by regular use of mixers (although I didn't understand how it would be possible as mixing doesn't involve any intervention into Blockchain). Instead what you are saying is more about reputation than real harm and of bitcoin rather than Blockchain. I've never used bitcoin mixers, but I don't think it's fair to be prejudiced against mixer users. And the argument about scammers using it is weak because scammer also drink water and drive cars, so why don't we stop doing that as well?

[hulla]

Didnt see any harm cause by mixing services to blockchain technology but to only enhance the privacy and anonymity of crypto currency transactions.  What will say about privacy coins?
Understand that people used mixing service to secure themselves cause using a single wallet thrice is not a safe decision cause theres some online thefts which purpose was to target huge coins sent and with mixing service person dont need to be worry.

Meaning mixers are most widely being used by average bitcoin users trying to reclaim some of their privacy from the ever more invasive surveillance performed by centralized exchanges.

+1