Many people believe that Bitcoin is entirely anonymous but unfortunately this is not true. With a good blockchain analysis investigator and tools, anyone can discover the details of any Bitcoin transaction. The fact that Bitcoin transactions are not entirely anonymous has led to some bitcoin users developing a means of mixing up their cryptocurrency transactions.
With a technology known as Bitcoin Tumbler, Bitcoin users can attempt to obfuscate the history of their transactions. However, are bitcoin mixing services legal? Are Bitcoin tumblers simply providing money-laundering services?
In this post, we will take a quick look at what you should know about Bitcoin tumblers.
THE CONCEPT OF BITCOIN TUMBLER SERVICES
Otherwise referred to as cryptocurrency tumbler, the bitcoin tumbler offers a service that helps in mixing up cryptocurrency tokens in a bid to hide their origins.
Today, there are several ways to identify the origin of a cryptocurrency transaction. Whether it is in Ethereum or Bitcoin, with adequate knowledge, anyone can trace these transactions to their original wallets. When these transactions are traced to a wallet, the analyst can access basic information (such as name, ID number, local address, and bank account details, etc.) from it. All this data eliminates the anonymity that is promised when making cryptocurrency transactions.
You should keep in mind that the decentralization of the bitcoin blockchain implies that the network is open to all. It also means that the bitcoin blockchain is open for all to analyze or download. A Bitcoin Tumbler helps to eliminate the risk of exposing your transactions by disconnecting all links between bitcoin wallet addresses. Go to this website to learn more about bitcoin tumblers.
For instance, if I had a bitcoin transaction between wallet A and B, the transaction link is still open to any analyst, allowing them to trace our transactions. However, if I send it to the bitcoin tumbler first, it will disconnect the link between wallet A and itself. It will then generate a new transaction link between itself and wallet B. This way, no one can trace the transactions to both wallets.
THE LEGALITY OF BITCOIN TUMBLERS
It is understandable that people want to know about the legality of a bitcoin tumbler. After all, you would only be using it to protect your privacy, right?
Currently, Bitcoin tumblers are legal as there are no known laws that ban the use of cryptocurrency tumbling services. However, this also implies that anyone can carry out illegal activities using the Bitcoin tumbler. This loophole is the sole reason why some people see bitcoin tumbling services as money-laundering services. Hopefully, new laws will be put in place to curb these illegal activities in the nearest future.
WHO NEEDS BITCOIN TUMBLING SERVICE?
Anyone looking to protect their privacy needs a bitcoin tumbler service. You must keep in mind that bitcoin is not entirely anonymous, it is pseudo-anonymous. Hence, anyone looking to protect the privacy of their wallet can use a tumbling service to mix up their transaction links and tokens.
Using a bitcoin tumbler helps to maintain the anonymity of your bitcoin transactions.