Is CoinJoining/Mixing/Whirlpooling worth it in the end?

[20kevin20]

It's been months since I started contemplating improving the anonymity/privacy of my coins.

There's just one fear I keep having though, which is.. say I CoinJoin my coins a few times and then go through a mixer as well. 5 years later I want to sell my mixed coins - will I not get in trouble with the authorities?

It starts to feel more and more like the further you want to improve your privacy these days, the bigger of an enemy of the State you become. With all the crypto-related stuff that has been pushed in the last few years, it gets to the point where I think that in a matter of years mixing your coins will put you somewhere on the government's blacklist - in fact, it already got to that point in some areas of the crypto sphere such as exchanges not accepting XMR anymore or blocking/seizing your funds because they found out your BTC went through some mixer beforehand. So my fear isn't far-fetched, is it?

Therefore, while I would love to go ahead and mix the heck out of my coins just so that it becomes a big headache for and almost impossible for the government to keep up with my coins' track, there's this fear I'm having that mixing my coins now may turn into a big headache for me in the end as I might have to answer some questions I will literally have no answers for.

I can't imagine myself being able to prove for example where my coins actually came from in a matter of years if some authorities ever ask me to do so - if you asked me right now to show you all the wallets I've ever used, I'd probably send you to my local junkyard to find my shredded/burnt paper wallets and put all them pieces back together because all that's where all my previous wallets are, lol.

So what do you think, is it worth it to use mixers or could I get into a bigger trouble in the end?

[mk4]

What I personally do:

1. Mix a good chunk(but not 100%) of the coins I own.

2. Send the mixed coins(on different batches) on some addresses that I own, probably more than 10 times(preferably around 25 just to be sure). Pretty much a manual version of Samourai Wallet's Ricochet[1] because I'm cheap. This is to hopefully not sound alarms on anti-mixing(or soon to be) centralized exchanges as the coins were moved a lot of times after the time it was mixed. Or if they actually went that far and "detected" the past mixing and asked you about it, you can just say that you don't know about it lol because the mixing was like 25 transactions ago. 🤷‍♀️


EDIT: but yea boys and girls, mix your coins. at least some. at some point almost all bitcoin are already mixed in the past that it would be unfeasible for exchanges to blacklist every single address.

[1] https://samouraiwallet.com/ricochet

[gentlemand]

Unless I had a gaping security hole from leaving my coins unimxed I definitely would not mix them. We've no idea how uptight third party services will get about it in future, how good the tracking tools around at present really are and there may well be much better options to add privacy in future as well.

If there was a deeply pressing need to do it then doing it now rather than later at least looks less fishy a few years down the line.

[OcTradism]

In practice, is mixing only applicable for people who have good fund and not too small? Personally, mixing is the same as transactions and cost transaction fees. It depends on the fund value initially and number of mixing rounds.

If the fund is small, the rest after mixing will be smaller and the percent of lost for fees will be higher than if doing the same with bigger fund.

Choose time to mix is another contributor to result from mixing (in the side of mixing cost). Good time to mix should be in the weekend but people should check mempool before mixing their coins. Mixing is different than consolidation but choosing good time is the same.
[JULY 2020] Fees are low, use this opportunity to Consolidate your small inputs!

[o_e_l_e_o]

It starts to feel more and more like the further you want to improve your privacy these days, the bigger of an enemy of the State you become.

This is by no means unique to cryptocurrency. Everything from using Tor to having to root your own phone to be able to turn off some of the telemetry and tracking, it is time consuming and often difficult to maintain your privacy, and this is by no means accidental.

This is to hopefully not sound alarms on anti-mixing(or soon to be) centralized exchanges as the coins were moved a lot of times after the time it was mixed. Or if they actually went that far and "detected" the past mixing and asked you about it, you can just say that you don't know about it lol because the mixing was like 25 transactions ago. 🤷

At some point, near enough every bitcoin in circulation will have been mixed/coinjoined/payjoined/something else at some point in its history. You can't ban every bitcoin, so how far back do you look? 5 transactions? 10? 20? So all I need to do is bounce my bitcoin through n+1 transactions and now they are "clean" again? It's an untenable position for the exchanges to hold.

I would also mention, as I always do, that there is no need to rely on centralized exchanges.

[mk4]

At some point, near enough every bitcoin in circulation will have been mixed/coinjoined/payjoined/something else at some point in its history. You can't ban every bitcoin, so how far back do you look? 5 transactions? 10? 20? So all I need to do is bounce my bitcoin through n+1 transactions and now they are "clean" again? It's an untenable position for the exchanges to hold.

Exactly, but I wouldn't be comfortable in sending freshly mixed(in terms of hops) on centralized exchanges, hence why I do the Samourai Ricochet thingy. Mixing/CoinJoining is one of those things that will get it's maximum effect if everyone does it.

I would also mention, as I always do, that there is no need to rely on centralized exchanges.

True, and I rarely use centralized exchanges. Sometimes I just need money urgently and have to sell some coins in a quick manner. I have contacts with a few bitcoin buyers and sellers, but timezone differences is a btch.

[bitmover]

What I personally do:

1. Mix a good chunk(but not 100%) of the coins I own.

2. Send the mixed coins(on different batches) on some addresses that I own, probably more than 10 times(preferably around 25 just to be sure). Pretty much a manual version of Samourai Wallet's Ricochet[1] because I'm cheap. This is to hopefully not sound alarms on anti-mixing(or soon to be) centralized exchanges as the coins were moved a lot of times after the time it was mixed. Or if they actually went that far and "detected" the past mixing and asked you about it, you can just say that you don't know about it lol because the mixing was like 25 transactions ago. 🤷‍♀️

[1] https://samouraiwallet.com/ricochet

That's a good suggestion.
Antonopoulos made that suggestion few years ago.

Just use the mixer for the coins you want to mix (not all ofc). Then transfer those mixed coins about 5-10 times in addresses you own.

If Exchanges do not accept your coins because they are tainted, it is because they checked the past 5-10 transactions of those coins. If they check all previous transactions of those coins, they would realize that almost all coins are tainted (because they had been in a mixer/casino/etc at some point in the past).

So just move them in your wallets for some time to by pass their taint check.


Edit: Just saw o_e_l_e_o post:

I would also mention, as I always do, that there is no need to rely on centralized exchanges.

I agree, but they are usually much safer. In some exchanges like bitstamp, Kraken, coinbase, I can trust that I will be able to buy/sell 2-3 bitcoin easily, with safety.
I don't know if I would trust some random guy in the internet with such amount.

[o_e_l_e_o]

Exactly, but I wouldn't be comfortable in sending freshly mixed(in terms of hops) on centralized exchanges, hence why I do the Samourai Ricochet thingy.

Oh absolutely, I'm simply pointing out that while centralized exchanges do hold such a position, it is a stupid position, and one that is easily overcome as you are doing.

I agree, but they are usually much safer. In some exchanges like bitstamp, Kraken, coinbase, I can trust that I will be able to buy/sell 2-3 bitcoin easily, with safety.
I don't know if I would trust some random guy in the internet with such amount.

It's funny, but I'm the exact opposite. There is no way I would send 2-3 bitcoin to a centralized exchange. I have exactly zero faith that they wouldn't freeze my account, demand ridiculous amounts of personal data and information, I would spend weeks having to jump through hoops to hopefully get my coins back, and all my data would end up in the hands of third parties and governments for my troubles. I'd much rather trust a hardcoded multi-sig escrow or someone I have personally traded with several times in the past.

[20kevin20]

First and foremost, thank you all for replying with your sincere opinions.

1. Mix a good chunk(but not 100%) of the coins I own.
2. Send the mixed coins(on different batches) on some addresses that I own, probably more than 10 times(preferably around 25 just to be sure).

Yeah, this is definitely a good idea. I might spare some money on these txs just to hop my mixed BTC from one address to another until it gets exhaustive and quite hard to keep up with its trace.

Unless I had a gaping security hole from leaving my coins unimxed I definitely would not mix them. We've no idea how uptight third party services will get about it in future, how good the tracking tools around at present really are and there may well be much better options to add privacy in future as well.

If there was a deeply pressing need to do it then doing it now rather than later at least looks less fishy a few years down the line.

I might have a few privacy/security holes if I take an in-depth look at the history of my coins as I had zero idea about any privacy issues back when I started with crypto, so I'd rather mix them up. I agree though that future is quite uncertain so it might be a mistake to mix my coins right now.

This is by no means unique to cryptocurrency. Everything from using Tor to having to root your own phone to be able to turn off some of the telemetry and tracking, it is time consuming and often difficult to maintain your privacy, and this is by no means accidental.

At some point, near enough every bitcoin in circulation will have been mixed/coinjoined/payjoined/something else at some point in its history. You can't ban every bitcoin, so how far back do you look? 5 transactions? 10? 20? So all I need to do is bounce my bitcoin through n+1 transactions and now they are "clean" again? It's an untenable position for the exchanges to hold.

Agreed. Yeah, never thought that at one point all BTC will undergo a "privacy-improving process", especially as some of those willing to do so may be trying to evade taxes/charges, which means they probably have a quite impressive stash to mix.

I agree, but they are usually much safer. In some exchanges like bitstamp, Kraken, coinbase, I can trust that I will be able to buy/sell 2-3 bitcoin easily, with safety.
I don't know if I would trust some random guy in the internet with such amount.

I get your point but I still do not trust them. I barely trust sending $10 to an exchange at this point, as I'm just sick of their procedures. The fact that you cannot trade on a website without having the ensurance that your money will still be yours afterwards is annoying as hell. I'd rather find other ways to trade and accept stupid mistakes I may make than ever use them again.

[figmentofmyass]

There's just one fear I keep having though, which is.. say I CoinJoin my coins a few times and then go through a mixer as well. 5 years later I want to sell my mixed coins - will I not get in trouble with the authorities?

the ideal is for decentralized/p2p mixing transactions (like coinjoins or atomic swaps) to blend in among normal network transactions.

right now, that isn't possible. it's currently trivial for blockchain analysis to recognize coinjoin transactions/outputs or to monitor multiple blockchains for atomic swaps. i'm skeptical it will "get you in trouble with the authorities" on its own, but it could get your money frozen by over ambitious exchanges. we definitely need better on-chain privacy enhancements.

something i'm excited for is schnorr signatures, which will in turn enable adaptor signatures. this will allow atomic swaps without requiring you to publish all the script information on-chain. in other words, you'll be able to do atomic swaps for mixing without leaving behind any on-chain data that connects the outputs together. http://diyhpl.us/wiki/transcripts/layer2-summit/2018/scriptless-scripts/

[witcher_sense]

From my point of view, it is worth it to mix, coinjoin, whirlpool your coins. In decentralized ecosystems like bitcoin, everyone agrees on certain qualities, characteristics, properties of the system, usually it is hard to change even a single aspect of decentralized system. If majority decide, for example, that total supply should remain fixed, it will stay so. Majority tend to defend what they consider useful for the system in order for it to effectively grow and evolve. Fungibility is one of the main properties of money, otherwise it is not money if it couldn't be exchanged for another unit. Bitcoin is also money, way better than we had seen before. That property should also be protected like other useful properties of bitcoin. The only way to defend it in decentralized system is to convince majority that it needs to be protected by any means including obfuscating of bitcoin transactions.

"United we stand, divided we fall..."

[Wind_FURY]

What I personally do:

1. Mix a good chunk(but not 100%) of the coins I own.

2. Send the mixed coins(on different batches) on some addresses that I own, probably more than 10 times(preferably around 25 just to be sure). Pretty much a manual version of Samourai Wallet's Ricochet[1] because I'm cheap. This is to hopefully not sound alarms on anti-mixing(or soon to be) centralized exchanges as the coins were moved a lot of times after the time it was mixed. Or if they actually went that far and "detected" the past mixing and asked you about it, you can just say that you don't know about it lol because the mixing was like 25 transactions ago. 🤷‍♀️

[1] https://samouraiwallet.com/ricochet

That's a good suggestion.
Antonopoulos made that suggestion few years ago.

Just use the mixer for the coins you want to mix (not all ofc). Then transfer those mixed coins about 5-10 times in addresses you own.

If Exchanges do not accept your coins because they are tainted, it is because they checked the past 5-10 transactions of those coins. If they check all previous transactions of those coins, they would realize that almost all coins are tainted (because they had been in a mixer/casino/etc at some point in the past).

So just move them in your wallets for some time to by pass their taint check.

Then it's better NOT to mix anything if your coins are, exchange - your wallet - exchange.

Edit: Just saw o_e_l_e_o post:

I would also mention, as I always do, that there is no need to rely on centralized exchanges.

I agree, but they are usually much safer. In some exchanges like bitstamp, Kraken, coinbase, I can trust that I will be able to buy/sell 2-3 bitcoin easily, with safety.
I don't know if I would trust some random guy in the internet with such amount.

Or make good relationships with some people in peer to peer trading markets like LocalBitcoins.

[mk4]

Then it's better NOT to mix anything if your coins are, exchange - your wallet - exchange.

While I personally don't mix all my coins, not sure about you, but I don't like my money being traced not only by random people, but also by exchanges either; regardless how reputable or "trusted" that certain exchange is. Regardless, requiring privacy in this case is hugely subjective so, you do you.

[slaman29]

You will not get in trouble if you did not knowingly take money from a criminal that is all I'm very confident of. I mean, dollar bills have cocaine on them. And corrupt ministers give money out all the time. If you was going to jail because a bad guy touched your money, we would all be in jail now!

[Lucius]

There's just one fear I keep having though, which is.. say I CoinJoin my coins a few times and then go through a mixer as well. 5 years later I want to sell my mixed coins - will I not get in trouble with the authorities?

So my fear isn't far-fetched, is it?

So what do you think, is it worth it to use mixers or could I get into a bigger trouble in the end?

I think your fear is completely justified, the pursuit of anonymity will always have its price in the future - especially if we take into account that the idea of decentralized money has never and will not fall on fertile ground. I recently read an article where someone pointed out how Bitcoin could be classified in the future, in fact that their price will depend on their origin. If we consider that something like this can happen, in 5 or 10 years someone might tell you or me that our BTCs are worth 10-20% less because they are not very clean - or in an even worse case they could be frozen on some exchange while we do not prove their origin.

However, as others have stated, most BTCs will be marked as black/gray in some way by going through mixers, online casinos, participating in scam or the dark web. The only sure way to have clean coins is to buy virgin Bitcoins, and not use any mixers afterwards - but miners usually sell their stock over OTC at a 10-20% higher price

[bitmover]

Then it's better NOT to mix anything if your coins are, exchange - your wallet - exchange.

Coins which go from exchange - your wallet - exchange are important to mix imo.

As exchanges requires KYC, your coins will be linked to your ID when you send them to exchange. So, basically, if coins came from bitcointalk, you are linking your bitcointalk account to your ID if you don't mix them.

[Wind_FURY]

Then it's better NOT to mix anything if your coins are, exchange - your wallet - exchange.

Coins which go from exchange - your wallet - exchange are important to mix imo.

As exchanges requires KYC, your coins will be linked to your ID when you send them to exchange. So, basically, if coins came from bitcointalk, you are linking your bitcointalk account to your ID if you don't mix them.

But the risks? Read OP. I believe privacy is less-important for a trader who is here only to profit in fiat in my opinion. Exchange - wallet - exchange.

[Ucy]

Privacy/anonymity is a human right. That can't be taken away from anyone unless you commit serious crime.
This's one of the reasons I believe it's important to understand the problems the laws are trying to solve in other to help them (the laws) solve the problem without violating important/fundamental rights like privacy/anonymity.
I would suggest methods that cloak/hide users transactions or coins effectively without making them hard to go through or traced when the law wants them. This's why immutablity should remain a fundamental principle of Blockchain/decentralized tech.
You could tie the important/big transactions and coins to your unique personal identities while still keeping them well hidden, private or anonymous...so that you can easily go through them when requested by the law. Again this is why immutablity is important.

I believe people have the right to refuse to reveal certain data if they did not break any serious rules/laws, and if they feel unsafe. People also have the right to delete harmless/safe/good data they no longer need if they want to, but it could make things a bit hard for them in the future.

[bitmover]

But the risks? Read OP. I believe privacy is less-important for a trader who is here only to profit in fiat in my opinion. Exchange - wallet - exchange.

There are risks when you don't mix them as well.

For example, you earned a lot of money in this forum already in your signature campaign. Have you paid taxes from that earnings?
Did you send your coins from crypto-games campaign straight to an exchange, linking your ID with crypto-games (a casino) and your bitcointalk profile?

Are casinos legal in your country? Shouldn't you pay taxes on your earnings? Can you explain all that to the authorities?

[20kevin20]

From my point of view, it is worth it to mix, coinjoin, whirlpool your coins. In decentralized ecosystems like bitcoin, everyone agrees on certain qualities, characteristics, properties of the system, usually it is hard to change even a single aspect of decentralized system. (..)

"United we stand, divided we fall..."

I honestly really wish it was that way, but it looks like the authorities have found a way to forcefully change some stuff without changing Bitcoin itself. Let's hope your last quote will still apply even 5, 10 or 30 years from now.

You will not get in trouble if you did not knowingly take money from a criminal that is all I'm very confident of. I mean, dollar bills have cocaine on them. And corrupt ministers give money out all the time. If you was going to jail because a bad guy touched your money, we would all be in jail now!

Tell the centralized exchanges this, not us! I'm quite sure there would be a problem if there was a clue that your banknotes came from a not-so-legal source. It goes even worse for bank accounts (which are closer to what Bitcoin is): had you received money from a criminal through the bank, don't be surprised if authorities ever call you out for an interrogation.

I would suggest methods that cloak/hide users transactions or coins effectively without making them hard to go through or traced when the law wants them. This's why immutablity should remain a fundamental principle of Blockchain/decentralized tech.
You could tie the important/big transactions and coins to your unique personal identities while still keeping them well hidden, private or anonymous...so that you can easily go through them when requested by the law. Again this is why immutablity is important.

Your statement is quite contradictory, you cannot cloak/hide a transaction without making it hard for authorities to trace it. If the authorities can easily do so, then can the average person who knows how to do a proper blockchain analysis. The idea is that I'm trying not to link my txs to my identity/fingerprints.

There are risks when you don't mix them as well.

True. It's a double-edged sword. You basically have to choose between the probability of a bad actor trying to analyze the blockchain to find who you are and the probability of someone considering you a suspicious dude because you tried avoiding your identification.