Are Bitcoin mixers traceable?

Bitcoin mixers cannot claim that after using their services or products the users will be 100% anonymous. So, does it make sense to use them?

Governments all around the world, with the help of blockchain analytic companies, are trying to get the hold over information about transactions that are happening on the Bitcoin blockchain. Since Bitcoin is not fully anonymous, but only pseudonymous, this means that if the users are not careful enough, they can leave traces of their real-life identity on the chain pretty easily, which is something that the authorities or companies take advantage of.

We have been pretty vocal ever since the inception of Whir, that the main reason why this project exists is to give back the financial privacy and anonymity to the hands of everyday people. To journalists, privacy fanatics, crypto millionaires etc. To ordinary people, who should be allowed to keep the size of their wealth private from anyone.

Many would believe that Bitcoin is the best and simplest tool for that. And while this holds true under some very specific conditions, in most cases, Bitcoin is traceable. This is due to its nature. Bitcoin has a transparent ledger, blockchain, which records all the transactions on the network. Since it is by default immutable, no transactions can be reverted, changed or erased from the blockchain once they happen.

This is obviously all for the good of the network, as it provides a trustworthy book-keeping method that does not need any third parties. However, it also means that for the above-mentioned ordinary people, keeping their wealth really private can be a herculean task.

Most of them will probably buy Bitcoin through a centralized exchange, where they had to undergo some sort of a KYC process. Once that happens, their real-life identity is connected to their wallet and transactions that happen in it. What can people do to take back their anonymity?

Are Bitcoin mixers traceable?

Bitcoin mixers without any doubt improve the privacy of their users. The obscuring that most of these services and platforms provide make it much more difficult for governments and blockchain agencies to connect the real identities with “bitcoin stashes.”

While Bitcoin mixing is definitely a helpful tool that anyone in the world should know and be able to use, the Bitcoin mixers cannot under any circumstances claim that after using their services or products the users will be 100% anonymous.

In some cases, for example, which apply especially to the decentralized CoinJoins, there is a way to reveal the identity of the sender, if its has been known before the mix. This means that the senders might not get the best benefit of the whole process.

Moreover, the government in the United States has already applied some regulatory sanctions on few crypto and Bitcoin mixers. This means that specific addresses that had been deemed illegal are being tracked and CoinJoining or Bitcoin mixing will not be efficient in this case.

This also means that if the government wants, it can go after the team or developers behind any mixing services. If these services are centralized and keep track of the transactions that they do, the whole anonymity and privacy is nothing but a myth, if the team reveals the transaction history of the given Bitcoin mixer.

So, through different techniques, governments and blockchain analytics companies can try to increase their likelihood of tracking any kind of transactions they want. This could in many instances also apply to Bitcoin mixing services, which inherently strive to be untraceable.

However, there are not currently many platforms such as these that could with 100% certainty and honestly claim that they are resistant to all the different forms of attacks from the governments or analytics companies. Whether these are technical, meaning tracing transactions via on-chain tools, or more regulatory and legal steps, Bitcoin mixing services cannot with complete certainty claim to be absolutely untraceable.

More transactions, more privacy

Nevertheless, using Bitcoin mixers should be almost compulsory for anyone, who wants to do maximum for their own financial privacy. While these tools are not 100% efficient, they are orders of magnitudes better for your privacy than not using Bitcoin mixers.

And one thing that can help immensely is adoption of Bitcoin mixers. Not only Bitcoin, but Bitcoin mixers. If transactions in Bitcoin mixers are normalized, meaning they are occurring in much, much bigger numbers, the traceability of given identities on the blockchain will be much more complicated for governments or blockchain analytics companies.

The logic here is pretty straightforward. Imagine you watch a movie where the “bad guys” are chasing the good guy. In a narrow alley, it is pretty easy for them to follow him. However, if he disappears in the huge crowd right in the middle of the city centre, it gets inherently much more complicated for them to find him. The sheer number of people (in the case of Bitcoin mixing the number of Bitcoin mixing transactions) can make the individual transactions much harder to track.

Do your part with Bitcoin mixers

That is one of many reasons for trying Whir. Whir is a Bitcoin mixing tool that offers improved anonymity to its users through CoinJoin techniques. It also does not require any registration, KYC processes or accounts, meaning that both sides of the transactions, senders as well as the receivers, will keep their financial information to themselves.

And the more people try Whir, or any other Bitcoin mixing services, the better the overall privacy will be, since the traceability of Bitcoin mixing transactions will blur with greater numbers. Thus, do not hesitate and try Whir today!

Disclaimer: This article does not serve as a piece of financial advice or encouragement and inducement for the usage of Bitcoin and other cryptocurrencies. Its primary role is informative, explanatory, and educational. The readers have to decide themselves whether to use or not to use these types of services.