For those who regularly use cryptocurrency, you might be familiar with a term called a coin mixer. But what is a coin mixer, and should you use one? Read on to learn more about crypto mixing tools and some suggestions for crypto mixing tools.
What Are Crypto Mixing Tools?
Cryptocurrency mixing tools are software that mix one cryptocurrency transaction with those of others making a transaction at the same time in order to promote transactional privacy.
For cryptocurrency to function on decentralized protocols, almost all blockchains have a public ledger on which transactions can be tracked. Although wallet addresses listed on these ledgers were meant to obscure private and identifying information, in our age of technology governments have discovered how to use what little information is given to trace cryptocurrency transactions.
As a result, many in the space have developed coin mixers or tools which mix transactions on the blockchain with other transactions. This prevents the government, or other parties, from knowing who spent what cryptocurrency and when, therefore giving users of the blockchain more anonymity in their transactions.
Related: Tornado Cash Sanctioned by the US Government
Why Are Coin Mixers Important?
Over the past 3 decades, privacy has become almost obsolete, especially in developed countries. Governments have access to all your identifying information, bank accounts, and more. Cryptocurrencies were developed to try and give the power of privacy back to the people, however, thanks to the need for apps with developed user interfaces and KYC, almost no cryptocurrency is truly anonymous.
As a result, fraud and identity theft run rampant, even in the crypto world. While coin mixers can’t stop your information from being given to a platform that uses KYC, they can help obscure the details of how you are spending your cryptocurrency and when. Only those who use a Trezor, or another type of cold wallet, to manage their crypto can remain almost fully anonymous if they use a coin mixer when sending transactions.
This anonymity is important, especially as governments everywhere begin to crack down on cryptocurrency. It allows the true owner of the coins to be able to spend them as they please without worrying about being tracked or scrutinized by an outside party.
Are Coin Mixers Legal?
Using a coin mixer is not illegal, no matter what you may be told. The US government and other national governments are aware of coin mixers, however, and certain mixers have been banned due to allowing illegal activity to occur on their platform. The most famous of these is Tornado Cash, which was banned in the US Fincen in August 2022.
We suspect that additional coin mixers will be banned by the US government, just because the US government really doesn’t like not being able to control cryptocurrency. The good news is, there are many coin-mixing protocols, and we believe that it will be impossible to ban them all unless the government makes coin mixers as a whole illegal, only then it may be very difficult to access one.
Are Coin Mixers Safe?
Just like anything else in the cryptocurrency world, not all coin mixers are safe. Some platforms may be scams, and others may be susceptible to hackers and other forms of theft. Before using a coin mixer, you will want to do your research to ensure you are choosing one which is a legitimate project.
We also recommend trying a small transaction to start, just a single one of a few dollars. If everything goes as planned, then you can consider sending a larger amount of cryptocurrency on your next transaction.
The Best 3 Coin Mixers
Below we have made a list of the best coin mixers based on user reviews. It’s important to know that just because a coin mixer appears on this list doesn’t mean it is safe to use. Ensure you do your own research before putting your hard-earned money on the line. Additionally, any site on this list may be shut down at any time. Check your local laws to ensure you can use the desired coin mixer legally before sending your first transaction.
CoinJoin
CoinJoin is a coin mixer app that is specifically associated with the Trezor cold wallet. CoinJoin is generally a respected project and has proven to provide excellent privacy in the past, especially when it comes to Bitcoin transactions.
Blender.io
Another favorite project is Bender.io, but unfortunately, this one isn’t as easy to verify as CoinJoin. If you want to consider using Blender.io, it is a website that can be accessed easily, but be sure you do your own research before trusting the site. It has been around since 2017 however, and does have a good track record, but this doesn’t mean it is 100% safe. Blender.io is currently banned in the US.
Wasabi Wallet
Our last suggested coin mixer also doubles as a wallet. This makes it easy to secure your transactions each and every time you send one without having to take an extra step. Wasabi Wallet is convenient, and many users trust it with their transactions. It is available for almost every operating system.
Wasabi Wallet is for Bitcoin only, which is the only downside. It is also an open-source unfunded project, meaning they rely on donations to continue innovating. This means that while it might be safer than some other options, it won’t have the same customer service as Helix and may eventually age out of regular updates.
Related: Hot Wallets vs Cold Wallets: How Your Money is Stored
Should You Use a Coin Mixer?
As you can see, there are many different types of coin mixers available, but it isn’t always a piece of cake to use them. Regardless, we recommend always using a coin mixer when you can. Not because you want to hide what you are buying, but just to promote the idea of privacy. You never know when the government may release a new regulation that makes you a criminal retroactively.
Of course, the final choice is up to you, but coin mixers really do add privacy back to cryptocurrency, so consider one next time you need to send crypto to someone.
You May Also Enjoy: The Best Ways to Increase Your Privacy Online
This article was brought to you by the Provably Fair Bitcoin Gambling on MintDice. Originally posted to the MintDice Blog.