Bitcoin Mixing Services

[AuorFedelmid]

Hi,

I am very new to Bitcoin and just learning a lot of the terminology and technologies which make it run. I see in the services forum there are a lot of Bitcoin Mixers, I know what they are for but I was wondering exactly how they worked?

Ideally, you would send your BTC to the mixer and it would forward you on the same amount - fee from a completely separate transaction chain of Bitcoins so that it cant be traced, but in reality, can it work like that unless the mixer has a lot of BTC. If the Mixer has little BTC or is new they might not have funds on another chain to send to you and then they just forward your BTC back to you which has the same trail.

Could someone explain if that is likely the case in this scenario? or are there other technologies at work here?

[dkbit98]

Ideally, you would send your BTC to the mixer and it would forward you on the same amount - fee from a completely separate transaction chain of Bitcoins so that it cant be traced, but in reality, can it work like that unless the mixer has a lot of BTC. If the Mixer has little BTC or is new they might not have funds on another chain to send to you and then they just forward your BTC back to you which has the same trail.

Could someone explain if that is likely the case in this scenario? or are there other technologies at work here?

Don't use any new and unknown Bitcoin mixers because there is high risk of them being a scam, and when you are using legit mixers always double check if you are on real website and not some phishing fake website.

Chipmixer is well know bitcoin mixer that exists for years (since 2017 on bitcointalk forum), they have enough funds for sure and you don't have to pay any additional fees except donations if you are happy with their service.
They are not using any separate chain other than Biotcoin chain, and it makes extremely hard for anyone to track transactions with their chips that have predetermined amounts of bitcoin.

There are other alternative ways for making bitcoin more private with using coinjoins with wasabi wallet or exchanging with other privacy coins but none of them is perfect, and if you don't know what you are doing you can easily make a mistake that negates anything you did with mixing.

2021 List Bitcoin Mixers Bitcoin Tumblers Websites:
https://bitcointalk.org/index.php?topic=2827109

[joniboini]

More or less you got the idea, but not every mixer work the same way. Some of them will give you a private key instead of sending you money from a different address. Giving you a private key is better in theory, but it also carries another risk, because you have to trust the service to not use it asap after they give it to you. In short, they can steal your money but pretend that they don't do it since they already give you the private key, and push the blame on you instead. This is just one aspect to it, I suggest you read https://bitcointalk.org/index.php?topic=5117328.0 if you want to learn more and see which mixing services are prone to attack compared to others.

[ranochigo]

Ideally, you would send your BTC to the mixer and it would forward you on the same amount - fee from a completely separate transaction chain of Bitcoins so that it cant be traced, but in reality, can it work like that unless the mixer has a lot of BTC. If the Mixer has little BTC or is new they might not have funds on another chain to send to you and then they just forward your BTC back to you which has the same trail.

Could someone explain if that is likely the case in this scenario? or are there other technologies at work here?

They wouldn't.

The whole point of mixers is to eliminate the link between your coins and the coins sent from the service. Most mixers does this extremely well, by sending you funds that are completely unlinked to you. In most cases, the mixer takes your Bitcoins, send it to several addresses to obfuscate the link, consolidate some of them and keeps it for another user. Any competent mixer should not send the funds back to the user in the same session. Different mixers of course will have different procedures and methods to avoid detection.

As with the link mentioned above, the privacy was broken through blockchain analysis and it would be a good read if you want to know the rationale behind it. CoinJoin does not break the link, by the way. It merely obfuscates them but the link is still there.

[o_e_l_e_o]

Giving you a private key is better in theory, but it also carries another risk, because you have to trust the service to not use it asap after they give it to you.

It is no more risky than any other method. You still have to trust the mixer with your coins, and a mixer can just as easily claim that you sent coins to a phishing address as they can claim you already claimed the private key.

If the Mixer has little BTC or is new they might not have funds on another chain to send to you and then they just forward your BTC back to you which has the same trail.

This is a genuine concern, and even with a lot of intermediate transactions bitcoin can still be traced through a mixer. There was a great post a few years ago here - Breaking Mixing Services - which demonstrates exactly that.

It's worth noting that ChipMixer behaves differently to all other mixers and so is more secure in this regard. When you send coins to ChipMixer, you are given back chips which can be redeemed for bitcoin outputs which are already funded. So if I sent 0.1 BTC to ChipMixer right now, the funds they give me in return are from address which were funded in the past. There is no possible way they can return the same coins back to me.

[ChipMixer]

Giving you a private key is better in theory, but it also carries another risk, because you have to trust the service to not use it asap after they give it to you.

It is no more risky than any other method. You still have to trust the mixer with your coins, and a mixer can just as easily claim that you sent coins to a phishing address as they can claim you already claimed the private key.

If you use ChipMixer (do not know other mixer that give you private keys) you get private key after one confirmation after deposit. If it plans to use it (sweep it) after it gives you private key - it may just not give you key at all for same result.
But if you want to maximize your privacy with ChipMixer - you want to add some time between deposit and usage of withdrawn chips. Here is risk that it may steal your keys after day week or month but why would it wait?

[Husires]

Liquidity is one of the indicators that give the mixer strength, its lack or insufficiency will cause poor privacy.
The way a mixer works is what will determine the amount of privacy you will have, but in the end, absolute privacy requires the use of a decentralized mixer that does not collect user data.

All Mixers (like VPNs) says they erases the data but no One Knows.