What are the dangers of mixer/tumblers

[TimeTeller]

Mixers or tumblers are services that allow users to mix their Bitcoin transactions with those of other users to obscure the source and destination of funds. While mixers can be useful for maintaining privacy, there are also some potential dangers associated with using them. There are several services that claim to offer this level of security, but it is important to be careful of any claim that the mixer is completely secure or anonymous and at worst is blacklisted by exchanges and other service providers.

Any person who have use mixer or tumbler know if centralized exchange, bank, and government are blacklist mixing usage because it can be used to money laundering. This is we have an option to use decentralized exchange and cash out without bank, but it's hard since you need to find someone who's willing to trade with you. Mixing isn't make your transaction secure, but it just to increase your privacy into 100% anonymity.

Top mixer are being sued by the government now because of fraud issue so it will be hard to spot a good one if you still concern about your privacy. Dealing to someone is not safe as well, you can’t fully trust their statement alone, it should be based on their trust rating as well. If your purpose is privacy, then try to use other platform who offers this kind of services, just try it for a few bucks and see how it works.

The Chipmixer issue really is a big blow to the crypto mixer business.
They are one of the top and reputable mixers in this community.
So right now, we don't know how safe and secure they are once the government seized their operations.
You can try other mixers, but as you said, use small funds if it will go thru smoothly.
However, if you don't need this service, why not just use the regular trading platforms for your crypto needs?
Ask yourself, how badly you need the 100% anonymity that you will go thru via mixer services?

[Abiky]

The Chipmixer issue really is a big blow to the crypto mixer business.
They are one of the top and reputable mixers in this community.
So right now, we don't know how safe and secure they are once the government seized their operations.
You can try other mixers, but as you said, use small funds if it will go thru smoothly.
However, if you don't need this service, why not just use the regular trading platforms for your crypto needs?
Ask yourself, how badly you need the 100% anonymity that you will go thru via mixer services?

Using mixers is a gamble these days. You'll never know when governments will shut them down, or if you could get flagged by the authorities after using them. With crypto being heavily-scrutinized by regulators, we should expect mixers to disappear in the future (centralized ones, of course). Unless crypto/privacy advocates fight for privacy/anonymity, mixers won't be going anywhere soon.

I'd "stick" with non-custodial mixers just to be safe. Some BTC wallets already have built-in mixing features (eg: Wasabi and Samourai) so there should be nothing to worry about. Who knows if governments give up in their efforts to try to take down crypto/Blockchain tech for good? Just my opinion

[Ferib]

I ended up doing some research of my own and simply made my own 'coinjoin' implementation for Litecoin. I started it pretty basic by having the host create the unsigned (final) transaction for all participants. The host negotiates with all participants and the conclusion of that agreement results in an unsigned transaction. From there, the transaction is passed to the first participant who signs it and passes it back to me so I can forward it to the next participant until every signature was added.

I looked into the Wasabi wallet but none of them are supporting hardware wallets. That kinda makes sense as going back and forth with signing (especially with big transactions) can be an annoying task if done manually.

Lastly, how come all online 'mixers' and other bogus is straight-up a scam? Do people really trust these time-based 'mixers'? To me, they seem to either be a honeypot,  a scam, or a scan that hasn't happened yet (exit scam).

[Velemir Sava]

One of the main risks is that mixer/tumblers can be used to facilitate money laundering or other illegal activities. By mixing or tumbling funds, user can effectively obscure the origin and destination of their transactions, making it difficult for law enforcement agencies to track and investigate these activities. Another danger is that mixer/tumblers can be used to scam or fraud unsuspecting users. Some mixer/tumbler services may be operated by malicious actors who seek to steal or launder funds, or who may charge exorbitant fees for their services. There is also risk of technical issues or errors when using mixer/tumblers in crypto currency transactions. If a mixer/tumbler service experiences a glitch or malfunction, funds may be lost or delayed, leading to financial losses for users. To minimize risks, it is important to exercise caution when using mixer/tumblers in crypto currency transactions. Users should only use reputable services with a proven track record of reliability and security, and should be aware of the potential risks and limitations associated with these tools.

While there are risks associated with a mixer/tumbler service there is another side that we should look at as well e.g. in terms of Enhanced Privacy and Security, a mixer/tumbler can provide increased privacy and security for authorized users. Cryptocurrency transactions are often recorded on public blockchains, making them potentially traceable to anyone. Mixer/tumbler services allow users to obfuscate their transaction history, protect their privacy and prevent targeted surveillance or tracking. This can be especially beneficial for individuals in countries with oppressive regimes or those who are concerned about their financial privacy.

Second is Utilization for Legitimate Purposes, The mixer/tumbler may also be used for lawful purposes. For example, individuals may wish to separate their personal transactions from business-related transactions for accounting purposes. meaning a mixer/tumbler service can help achieve this separation, ensuring accurate financial records without compromising privacy. In addition, they can be used to improve fungibility, where all units of a cryptocurrency become indistinguishable, making the currency more exchangeable and facilitating wider adoption.

[Abiky]

I ended up doing some research of my own and simply made my own 'coinjoin' implementation for Litecoin. I started it pretty basic by having the host create the unsigned (final) transaction for all participants. The host negotiates with all participants and the conclusion of that agreement results in an unsigned transaction. From there, the transaction is passed to the first participant who signs it and passes it back to me so I can forward it to the next participant until every signature was added.

I looked into the Wasabi wallet but none of them are supporting hardware wallets. That kinda makes sense as going back and forth with signing (especially with big transactions) can be an annoying task if done manually.

Lastly, how come all online 'mixers' and other bogus is straight-up a scam? Do people really trust these time-based 'mixers'? To me, they seem to either be a honeypot,  a scam, or a scan that hasn't happened yet (exit scam).

Interesting. If you decide to publish the source code or even launch the privacy solution for public use, please let me know. I'd suggest you don't reveal your true identity, or governments will be on your tail. You can see how one of Tornado.Cash's developers was arrested because of his involvement in the project. If he had used a pseudonym, it would've been harder (or almost impossible) to find him. These days mixers are getting scrutinized by mainstream governments, so we should not let our guard down.

I believe all centralized mixers will fail because it's easy enough to shut them down by the authorities. But I cannot say the same about non-custodial or decentralized mixers and/or privacy techniques. Let's see how everything will unfold as crypto/Blockchain tech becomes more popular worldwide.

[Ferib]

One of the main risks is that mixer/tumblers can be used to facilitate money laundering or other illegal activities. By mixing or tumbling funds, user can effectively obscure the origin and destination of their transactions, making it difficult for law enforcement agencies to track and investigate these activities. Another danger is that mixer/tumblers can be used to scam or fraud unsuspecting users. Some mixer/tumbler services may be operated by malicious actors who seek to steal or launder funds, or who may charge exorbitant fees for their services. There is also risk of technical issues or errors when using mixer/tumblers in crypto currency transactions. If a mixer/tumbler service experiences a glitch or malfunction, funds may be lost or delayed, leading to financial losses for users. To minimize risks, it is important to exercise caution when using mixer/tumblers in crypto currency transactions. Users should only use reputable services with a proven track record of reliability and security, and should be aware of the potential risks and limitations associated with these tools.

No thanks, could have asked ChatGPT myself

I ended up doing some research of my own and simply made my own 'coinjoin' implementation for Litecoin. I started it pretty basic by having the host create the unsigned (final) transaction for all participants. The host negotiates with all participants and the conclusion of that agreement results in an unsigned transaction. From there, the transaction is passed to the first participant who signs it and passes it back to me so I can forward it to the next participant until every signature was added.

I looked into the Wasabi wallet but none of them are supporting hardware wallets. That kinda makes sense as going back and forth with signing (especially with big transactions) can be an annoying task if done manually.

Lastly, how come all online 'mixers' and other bogus is straight-up a scam? Do people really trust these time-based 'mixers'? To me, they seem to either be a honeypot,  a scam, or a scan that hasn't happened yet (exit scam).

Interesting. If you decide to publish the source code or even launch the privacy solution for public use, please let me know. I'd suggest you don't reveal your true identity, or governments will be on your tail. You can see how one of Tornado.Cash's developers was arrested because of his involvement in the project. If he had used a pseudonym, it would've been harder (or almost impossible) to find him. These days mixers are getting scrutinized by mainstream governments, so we should not let our guard down.

I believe all centralized mixers will fail because it's easy enough to shut them down by the authorities. But I cannot say the same about non-custodial or decentralized mixers and/or privacy techniques. Let's see how everything will unfold as crypto/Blockchain tech becomes more popular worldwide.

Obviously, I wrote mine for the sake of educational purposes only as I was researching the possibility of the Bitcoin/Litecoin blockchain, and how I can take advantage to secure my spending. I wrote my journey at https://ferib.dev/blog.php?l=post/Bringing_Obfuscation_to_the_Bitcoin_Blockchain, it's not perfect and I'm looking to improve.

[podluznyj]

Hi folks, I was looking around into Mixers/Tumblers the other day and stumbled upon some very good research like the zk-SNARKs and TumbleBit. Two technologies that 'obfuscate' transactions, making blockchain analysis a guess fest.

My interest in the mixer is in Bitcoin forks and nothing fancy like Ethereum (which has zero-trust mixers based on zk-SNARKs like Tornado cash AFAIK) but when looking into existing online mixers they all appear to be 'send me coins and I promise I will send them back' kind of vibe.

Aren't there any zero-trust mixers for Bitcoin or Bitcoin forks? or have I been looking in the wrong direction?

Also, could multi-sig transactions with two or more participants (using a pre-defined amount of assets, ideally inputs are dividable by each other, eg, a multitude of 0.001) be used to obscure transaction histories?

For bitcoin mixing services, the biggest capital is their reputation on the network, which is earned over the years. Therefore, popular mixers are unlikely to steal small amounts of bitcoins. However, we must not forget that all mixers are completely anonymous - this is the basis of their existence. After all, any owner of the mixer, if he is deanonymized, will be instantly arrested and charged with money laundering, terrorist financing, etc., which will provide him with more than a comfortable term in any country. And this means that by sending bitcoins to the mixer, you completely trust it - the only guarantee to get your bitcoins back is the obligations of the owner of the service. That is, you act solely at your own peril and risk, and this must be remembered.

[Bolivar_Tony]

Zero-trust mixers for Bitcoin or its forks are not as prevalent as they are for Ethereum. While there may be online mixers available, they often involve trusting a third party. However, exploring alternative methods such as multi-signature transactions with divisible inputs could potentially contribute to obfuscating transaction histories. It's essential to research and assess the security and trustworthiness of any mixer or method before utilizing it for privacy purposes.

[Apocollapse]

I do understand the whole concept of mixers and I have always wondered why that. If there is nothing to hide, why will I go through the risk of losing my Bitcoin if I might not get them back? Coming back to your statement, you do understand that has been the problem with Bitcoin transactions or Crypto in general, how many places can we spend crypto for now or how easy can you find someone that you can trade in exchange for goods/services? even after using the DEX, you still need the bank at least for now may be it might change in the future.

There's always a thing someone need to hide, will you feel safe if you share your total assets, where the assets you have, how to access it and your home location to stranger like me?

Yeah there's a chance you can get scammed trading via P2P either in site or directly trade, this is why you need to trust the person you wanted to trade if you trade big amount money. Well there are many ways to receive your money, not only through bank account.

[Abiky]

Zero-trust mixers for Bitcoin or its forks are not as prevalent as they are for Ethereum. While there may be online mixers available, they often involve trusting a third party. However, exploring alternative methods such as multi-signature transactions with divisible inputs could potentially contribute to obfuscating transaction histories. It's essential to research and assess the security and trustworthiness of any mixer or method before utilizing it for privacy purposes.

Bitcoin does have zero trust mixers. The Samourai wallet has the "Whirlpool" privacy technique to obfuscate BTC transactions. There's also the Wasabi wallet which uses some sort of "CoinJoin" privacy technique. It's just there are not many options available for Bitcoin than it's the case with Ethereum these days. I wonder why developers aren't that interested in making other non-custodial mixers for BTC? It's likely they're afraid of getting caught and penalized by the government. The same can be said about ETH, although the smart contracts platform isn't as popular as Bitcoin is.

One needs to be aware of the dangers of using a mixer, especially when there's a huge crackdown against anything privacy-oriented in the crypto/Blockchain space. You could easily get flagged by the government, even when you're not doing anything wrong. Not even converting your BTC to XMR would do any help. The only way to avoid suspicion is to cash out your BTC to Fiat through a P2P exchange (no KYC), and then use the cash to buy Monero (XMR). I think all centralized mixers will ultimately die, leaving us with non-custodial (decentralized) mixers as our only option. I'm fine with that as long decentralization wins in the long run. Just my thoughts