Should I use mixers?

[coupable]

We all know that most chain analysis failed to identify transactions from/to Chipmixer wallets.

I don't think it was that they failed to identify transactions coming from or to ChipMixer, but rather, when a transaction was identified as coming from ChipMixer they were unable to link it to any specific transaction being deposited to ChipMixer. This is contrast to most other mixers, which as Stedsm points out above, can have their deposit and withdrawal transactions linked fairly robustly.

Sorry o-e-l-e-o, somehow i didn't understand you well. So briefly, is it safer to send coins from chipmixer chips to centralised exchanges ?
And if someone just looking for some privacy when making small trades, is it evident to get in trouble just because of using mixing methods? Knowing that there other options to hide traces .

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[o_e_l_e_o]

I am not into trading but the people who are into trading they do not have many options but to use all those centralized exchanges. This seems a big problem for cryptocurrency users.

I am also not a trader, but I think a possible work around is to buy bitcoin in a peer-to-peer manner, and then deposit it to a non-KYC non-privacy invading exchange and trade it against stable coins (although I am also not a particular fan of stable coins, but that's a whole different topic).

From your statement, it looks like on bitcoin transactions there is my full name written across it and there is a full and detailed explanation about my transactions.

If you are using bitcoin which has just been withdrawn from a centralized exchange, then there might as well be. That centralized exchange knows your name, addresses, social security number, and whatever else you told them, and will use blockchain analysis software or third parties to track your bitcoin movements and where else you deposit it or spend it, and more than likely hand that information over to various governments and their agencies.

So briefly, is it safer to send coins from chipmixer chips to centralised exchanges ?

I can't answer that I'm afraid. I pass all the coins I use through either ChipMixer or coinjoins, but I also don't use and have never used a centralized exchange. Different exchanges have different levels of draconian measures regarding where deposits come from and how likely they are to lock your coins/account.

[Stedsm]

@everyone,
Tbh, if the exchanges are stopping us from using mixers (I mean, by blocking deposits and even our accounts to frighten us), then I believe oeleo said it the right way that we should ask ourselves whether to use these "centralized exchange" services at all or not. Everything, from a custodial wallet to a centralized exchange has all the information of our coins going from our wallet to the other one which is literally not good. I mean, if someone uses a mixer to save themselves from getting traced, what's wrong with it? Why are these companies interested in fetching our personal data including crypto? Will they sell it to government and the officials will raid us and start asking for taxes while there's still no regulation for crypto in our country at all?

@shield132, let me give you an example to make you understand why "we" need to use mixers. Let's say you're a gambler and gambling is completely banned in your country but you still do it for your entertainment. Now, if you're too concerned that some day, your transactions will get traced somehow if you're making too much money through gambling and catch the eyes of your tax officials, you'll need to look for options to "hide" this activity from your officials. Obviously, gambling is not a crime and neither a monry-laundering activity, but if it's not allowed, then you may be put behind the bars with several charges on your name. So after thinking for your future, you decide to go for mixers and move your coins first to some wallets which have nothing to do with gambling industry, right? So that will save you at least, even if you are seen receiving too much money, your gambling activities are still under the hood.

@oeleo, Is it true that if we use mixing services and receive coins through them on our desired addresses, will those coins be categorized as tainted? I read this somewhere but don't remember exactly where.

[o_e_l_e_o]

Why are these companies interested in fetching our personal data including crypto?

Partly because governments are putting pressure on them to regulate and control bitcoin in the same way they can regulate and control fiat, and partly because there are third parties (including government agencies) who are very willing to pay good money for these blockchain analysis services. Have a look at some of the payments being made to various blockchain analysis services from various US government agencies:

Here are a few examples you can examine for yourself:

Chainalysis - https://www.fpds.gov/ezsearch/fpdsportal?indexName=awardfull&templateName=1.5.1&s=FPDS.GOV&q=VENDOR_FULL_NAME%3A%22CHAINALYSIS+INC.%22
Elliptic - https://www.fpds.gov/ezsearch/fpdsportal?indexName=awardfull&templateName=1.5.1&s=FPDS.GOV&q=VENDOR_FULL_NAME%3A%22ELLIPTIC+INC.%22
CipherTrace - https://www.fpds.gov/ezsearch/fpdsportal?indexName=awardfull&templateName=1.5.1&s=FPDS.GOV&q=VENDOR_FULL_NAME%3A%22CIPHERTRACE%2C+INC.%22
Coinbase - https://www.fpds.gov/ezsearch/fpdsportal?indexName=awardfull&templateName=1.5.1&s=FPDS.GOV&q=VENDOR_FULL_NAME%3A%22COINBASE%2C+INC.%22

Is it true that if we use mixing services and receive coins through them on our desired addresses, will those coins be categorized as tainted?

I will preface my answer by saying that I would argue such a category is completely meaningless. Whatever metric you use for classifying a coin as tainted, then if you go back far enough then almost every bitcoin in active circulation will be tainted. How do you combine tainted and non-tainted coins? What if Coinbase accepts the deposit of a tainted coin and transfers it to their hot wallet? Is every withdrawal from Coinbase now classed as tainted? Or perhaps they are only 0.1% tainted? If a tainted coin is used in a coinjoin with 49 other inputs, are all the outputs 2% tainted? What if a coin is moved 5 times? Is it still tainted? What about 10 times? 100? 1,000? It is completely arbitrary.

Having said all that, that's not to say these tainted metrics don't exist. However, you need to consider who is categorizing these coins as tainted. Yes, there are numerous centralized exchanges out there who are deciding coins which have been mixed or coinjoined are "tainted", and will then freeze accounts which deposit such coins. However, there is no such thing as "tainted" coins to nodes, to miners, to the network, to the protocol. "Tainted coins" are a creation of centralized third parties.

As I said above, I either ChipMix or coinjoin all my bitcoin. I have never once ran in to a problem spending, using, transacting, or trading my bitcoin, but I also do not use a single centralized exchange. You have to balance what is right for you. If you can't live without a specific centralized exchange which classifies coins as tainted, then you just have to accept a complete invasion of your privacy as the price to use that exchange. I would argue that the better option, both for you individually and for bitcoin as a whole, would be to stop giving custom to exchanges who behave like this and instead seek out exchanges which respect your privacy and do not use such meaningless algorithms.

[AB de Royse777]

I am also not a trader, but I think a possible work around is to buy bitcoin in a peer-to-peer manner, and then deposit it to a non-KYC non-privacy invading exchange and trade it against stable coins (although I am also not a particular fan of stable coins, but that's a whole different topic).

This reminds me about a topic I was thinking about from the last few weeks to create. I will come up with it in a day or two or maybe later today. They way BTC price is raising, at some point we may need some stable coins if anyone wants to get benefit from it.

[Joel_Jantsen]

Could someone elaborate on how exchanges find out if the source of the coins coming in is through a mixer? Because of the popular mixers like ChipMixer etc? What if I have my own set-up to mix coins? Like I toss them around various sources, convert them to the original source without using any third party mixers, will the centralized exchanges still find out if they're mixed?

As far as the topic goes, if I've done KYC on a centralized exchange, mixing coins would hardly make a difference because a very big portion of my anonymity is already compromised.

[figmentofmyass]

Actually, most exchanges are reluctant to providing their users the authority of using mixers while depositing on their platform and I have heard so many news about exchanges stopping and freezing the account and some didn't even release the account as of today.

that has happened several times publicly with coinjoins......any examples of it happening with centralized mixers?

Not deposit, but here's an example: https://twitter.com/PaxosGlobal/status/1222237095009320960

that was one of the public examples i was talking about. i know paxos' tweet lumps mixers and coinjoins together, but if you look into the details, the transaction(s) they flagged @RonaldMcHodled for were actually wasabi wallet coinjoins.

[o_e_l_e_o]

Could someone elaborate on how exchanges find out if the source of the coins coming in is through a mixer?

If I deposit coins to a mixer, I can watch what happens to those coins for the next couple of transactions. If I withdraw coins from a mixer, I can look back to see where those coins came from for the last couple of transactions. Although I cannot link inputs and outputs, I can be reasonably certain of a few addresses which belong to the mixer, and I can look for other coins passing through those addresses.

What if I have my own set-up to mix coins? Like I toss them around various sources, convert them to the original source without using any third party mixers, will the centralized exchanges still find out if they're mixed?

Depends on what you mean by "various sources". If you are talking about other exchanges, then you are making your privacy worse by doing that, not better.

As far as the topic goes, if I've done KYC on a centralized exchange, mixing coins would hardly make a difference because a very big portion of my anonymity is already compromised.

That's the whole point. Any coins you withdraw from a centralized exchange are linked to your real identity and therefore the exchange knows exactly who you are and what you are spending your coins on. If you mix them after you withdraw them, then your activities can no longer be tracked.

[shield132]

I have not stolen anything or have not done anything illegal however I do not want to let others know that this is my coin, I want to keep everything unknown from others.

Are you saying this is wrong? Protecting my privacy is my basic right.

In your context you sound like something is wrong this is why nothing to hide.

If you want to hide everything, then it's up to you. I don't say that you should never touch the mixer, I say that it's just not so necessary for overall anonymity. Not so necessary because it has it's fees and especially right now, when tx fees are very high, it would cost you a lot.
It's like when people advice: You should use steroids if you want to compete in professional bodybuilding, otherwise - don't touch.
Hope you understand the point.

You know, blockchain is an open book of transactions. Do you have something to hide from anyone? If no, then there is no reason to use mixers.

And clearly this is not the case.

If you want to feel extra secure and have resources and willpower for that, then use mixers! I talk here about average Joe with simple wishes.

From your statement, it looks like on bitcoin transactions there is my full name written across it and there is a full and detailed explanation about my transactions.

If you are using bitcoin which has just been withdrawn from a centralized exchange, then there might as well be. That centralized exchange knows your name, addresses, social security number, and whatever else you told them, and will use blockchain analysis software or third parties to track your bitcoin movements and where else you deposit it or spend it, and more than likely hand that information over to various governments and their agencies.

That's another case, that way you may use the mixer, it's up to you. But if I get freshly mined coins, then what? It's a very personal task in overall and depends on some factors too. For example, current high transaction fees and mixing fees make it hard for some people to use them.
I don't tell you not to use mixer, I just personally think that average Joe doesn't use Tails, VPN, Tor and mixer.

[FinneysTrueVision]

It all depends on your circumstances. Doing a lot of common sense things can prevent people from tracking you if you break up the trail among your transactions. Not using KYC services, avoiding creating change, and using new addresses for every transaction can be very helpful.

This brings to mind the question about using Chipmixer. We all know that most chain analysis failed to identify transactions from/to Chipmixer wallets. And with the system of Chipmixer where the user receive chips of private keys/addresses containing the desired amount which has been previously sent to that keys. In this case, isn't evident to send those funds to a personal address then to any centralised exchange ?

Elliptic was able to trace funds from the KuCoin hack as being sent to ChipMixer. As of today we have not heard whether they were able to trace the hackers after that point.

[o_e_l_e_o]

But if I get freshly mined coins, then what?

Sure, if you have just mined a block and picked up the block reward anonymously, then there is no need to mix those coins. But the majority of coins people are receiving have gone directly from an exchange, gambling site, or other service at which they have completed KYC, and therefore whatever they do with those coins can and will be linked to their real identity and passed on to countless third parties. If you don't fancy a bunch of unknown third parties sticking their noses in to your financial transactions and activities, then mixing is a good idea.

For example, current high transaction fees and mixing fees make it hard for some people to use them.

I don't want to seem like I'm shilling for ChipMixer (although they are the only mixer I use), but they have a pay-what-you-want model, so it is entirely possible to mix your coins with only one additional transaction fee (so a few cents up to maybe a dollar or two at peak times) than if you did not mix them at all.

I just personally think that average Joe doesn't use Tails, VPN, Tor and mixer.

Agreed, but I am of the opinion that the average Joe should do all these things. Everyone should be taking steps to protect their privacy at all times, especially with so many parties constantly trying to invade and infringe on it. Without privacy there is no freedom.

[aizzaku]

I hope everyone here knows what mixing services are, and for those who don't:

BTC mixers work as a medium, a medium that works like an escrow, gives you back your own coins but on your desired addresses and that too, from different places so for you to become non-traceable at your end. Now, these mixers don't know where these coins will be going to, so it's only you who knows about your coins, your addresses and your transactions.

So, what's the reason behind this thread?

Actually, most exchanges are reluctant to providing their users the authority of using mixers while depositing on their platform and I have heard so many news about exchanges stopping and freezing the account and some didn't even release the account as of today. I'm a privacy conscious person and would like to ask you whether I should still use mixers when depositing on an exchange or not.

That is a good question and I have also heard accounts getting flagged after coming from some mixing pools.

Did you check out Samourai? They apparently claim to have tested sending amounts to multiple exchanges and keep it operational without getting flagged.

I believe you might find the podcast talk by them quite interesting. Search for 'SLP209 SAMOURAI WALLET – BITCOIN CULTURE & NEW PRIVACY FEATURES'

Curious to know what do you think as I am also a privacy-conscious person.

[DoublerHunter]

~snip~
That is a good question and I have also heard accounts getting flagged after coming from some mixing pools.

^ This what I am afraid for. I have not used a mixer service as well since I have no issue on my previous exchanges and on my gambling activities so it can only be a waste of time and another risk that you will take if you use one. In fact, many investors still didn't use it or have just tried it for once but for convenience and security I prefer not to use it anymore. Nevertheless, if you think it will make you more comfortable and secure you may still use a mixer it always depends on our preferences.

[aizzaku]

~snip~
That is a good question and I have also heard accounts getting flagged after coming from some mixing pools.

^ This what I am afraid for. I have not used a mixer service as well since I have no issue on my previous exchanges and on my gambling activities so it can only be a waste of time and another risk that you will take if you use one. In fact, many investors still didn't use it or have just tried it for once but for convenience and security I prefer not to use it anymore. Nevertheless, if you think it will make you more comfortable and secure you may still use a mixer it always depends on our preferences.

plus it does come at a cost and the cost I think will increase over time. Eventually like you mentioned it depends on our preferences. It is also true that it isn't either 1 or 0 but can be a combination within your assets, to choose wisely.

[pugman]

Even if they do then how do they confirm that the fund is connected to mixer?

By looking at coin history/lineage for deposits, as well as tracking where coins go once they've been sent from the exchanges to users, i.e. do the coins ultimately go through a CoinJoin mechanism further down the line?

Binance in Singapore, for instance froze a user's funds after they were connected with a Wasabi CoinJoin.

Companies like Chainalysis have perfected the art of tracking Bitcoin and Bitcoin users and employ a host of techniques of identifying (Wallets / Entities / Clusters) through all sorts of analysis, which includes co-spending of inputs, change address analysis, amount analysis and unique finger-print style analysis of wallets. This means they are able to identify Gambling website entities and who is who.

CoinJoin transactions, by their very nature, are very easy to identify, even including which type of CoinJoin service you even used.

When exchanges use and integrate these Chain Analysis services into their systems, user's simply get flagged and the exchange is then capable of becoming a bully asking for further KYC checks.

So far, this flagging and policing hasn't been massively prevalent on a wide-scale. But it's possible that it may increase in the future.

This is massively fucked up.

Since I am a noob in this case, I would like to ask you fellow comrades, can y'all give me a few examples of a decent enough decentralized exchange where I can mix my coins? I am a simp for chipmixer, pls help.

Also, very interesting thread, its intriguing and the replies are scaring me off a bit, I won't lie.

[tippytoes]

~snip~
That is a good question and I have also heard accounts getting flagged after coming from some mixing pools.

^ This what I am afraid for. I have not used a mixer service as well since I have no issue on my previous exchanges and on my gambling activities so it can only be a waste of time and another risk that you will take if you use one. In fact, many investors still didn't use it or have just tried it for once but for convenience and security I prefer not to use it anymore. Nevertheless, if you think it will make you more comfortable and secure you may still use a mixer it always depends on our preferences.

If you really have no strong reason why you want to use mixer, better not to. Because somewhere along the way, you won't know if the exchange site you will be using in your future transactions will flag down your tx owed to being tied up with mixer. So avoid potential problem, why not avoid it in the first place? If you are worried about your privacy, there are exchanges that have no KYC like BNB or Kucoin, if you are dealing with lower amt of btc daily. Why not take advantage of those top exchanges that don't require KYC instead of using mixers?

[o_e_l_e_o]

can y'all give me a few examples of a decent enough decentralized exchange where I can mix my coins?

I'm not sure I follow what you mean here. You want to use a decentralized exchange to mix your coins? Why would you not just use a tried and tested mixer such as ChipMixer instead? Or do you mean a decentralized exchange which will not discriminate against you for trading mixed coins or mixing your withdrawals?

So avoid potential problem, why not avoid it in the first place? If you are worried about your privacy, there are exchanges that have no KYC like BNB or Kucoin, if you are dealing with lower amt of btc daily. Why not take advantage of those top exchanges that don't require KYC instead of using mixers?

Why not avoid potential problems by avoiding privacy invading exchanges instead? If you are worried about your privacy (which you should be), there are decentralized exchanges like Bisq and Hodl Hodl. The problem with using centralized exchanges like Binance or Kucoin which allow some users to not complete KYC, is that they can and do spring unannounced KYC on their users frequently, freezing your account and seizing your coins in the meantime. Your choice is then to either surrender your privacy or surrender you coins. Why not use mixers and decentralized exchanges, keep your privacy, and completely avoid the risk of some centralized exchange scamming you out of your coins.

[JohnBitCo]

I hope everyone here knows what mixing services are, and for those who don't:

BTC mixers work as a medium, a medium that works like an escrow, gives you back your own coins but on your desired addresses and that too, from different places so for you to become non-traceable at your end. Now, these mixers don't know where these coins will be going to, so it's only you who knows about your coins, your addresses and your transactions.

So, what's the reason behind this thread?

Actually, most exchanges are reluctant to providing their users the authority of using mixers while depositing on their platform and I have heard so many news about exchanges stopping and freezing the account and some didn't even release the account as of today. I'm a privacy conscious person and would like to ask you whether I should still use mixers when depositing on an exchange or not.

Lets think of a scenario, You have bitcoins in Wallet A and you create another wallet B. Now you mix the coins and transfer them to the wallet B directly from the mixing service. Now you have got the coins in your wallet B, you can transfer them to any exchanges without any issue. This is the safest way to avoid any complexities at the exchanges.

[imstillthebest]

i didnt knew that it can work as an escrow but i remember than an escrow held both funds before releasing them . mixers cant do that afaik but there are mixers that you can set a delay or on what time for your coins to arrive  but using a trusted escrow is what i will still prefer  . for depositing coins to exchange , there is no need to use for mixers . i never hear a hacker that steal coins from someone then depo it to an exchange but they will mostly depo it on the wallet or they will use mixers first .  the reason could be the restriction of exchange is because they think the funds are stolen .

[MFahad]

i didnt knew that it can work as an escrow but i remember than an escrow held both funds before releasing them . mixers cant do that afaik but there are mixers that you can set a delay or on what time for your coins to arrive  but using a trusted escrow is what i will still prefer  . for depositing coins to exchange , there is no need to use for mixers . i never hear a hacker that steal coins from someone then depo it to an exchange but they will mostly depo it on the wallet or they will use mixers first .  the reason could be the restriction of exchange is because they think the funds are stolen .

Bitcoin mixers should not be confused with the escrows. Both are different things with different purposes.
Also you should use mixers if its absolutely necessary to mix your coins to avoid the trace, because in normal circumstances we don't require mixers at all.