Transaction Mixer: How to Hide “Dirty” Bitcoins

How to Launder “Dirty” BTC Using Transaction Mixers

There are a lot of reasons for hiding your cryptocurrency, even if you are not a thief. Let’s consider why owners of digital assets should hide their coins.

Do you know that a lot of governors track and analyze all the payments processed in the BTC network? They pick up information about coins and their owners to control decentralized society, as the government doesn’t want to lose their authority over people who pay dues. Another important reason to hide your coins is that thieves and criminals search for wallets containing the biggest amounts of funds in order to hack them. One more reason to anonymize your digital assets is to hide your “dirty” habits to protect your private space.

“Dirty” BTC are cryptocurrencies containing strong links to illegal activity. For instance, if someone has hacked a cryptocurrency exchange and wants to launder their coins, or even if they have ordered illegal products or services on the Internet they won’t want anyone to know about it.

Additionally, one of the main reasons for hiding cryptocurrency is that hackers search for wallets with a huge number of coins. If you don’t want to be hacked or your coins to be stolen, you should protect your privacy.

Many people don’t want other people, for instance, relatives or friends, to know how they spend their free time, where they go, and which entertainments they prefer. This is private information that they may want to keep hidden. All of these reasons ensure that coin owners will often keep their transactions anonymous. Applicature can provide you with several tips on how to protect your privacy, and which tools you can use for this.

How to Mix Coins

As you know, all transactions are recorded in the distributed ledger, and everyone can track the history of your payments. It is publicly available. To hide the address of a sender or receiver, you can apply different tools, including transaction mixers. These are used to destroy traceability and confuse transaction analysts. These tools employ two basic means of hiding transactions:

• create temporary addresses to send coins
• blend coins of the same value between different owners

The first way means that a service blends the coins of different senders, then sends these transactions to other temporary addresses. This process allows imitation of other transactions to confuse blockchain analysts. For instance, if you send 2 BTC to a common pool, these assets can come back to you in the form of multiple and distributed transactions. The funds you receive from the network are mixed and split many times.

Transaction mixer

The second way combines coins between different users. Transactions are divided into two types: inputs and outputs. Inputs are transactions that you have received from other participants in the network. Outputs are transactions that you send to other users.

Transaction mixer 2

A transaction tumbler swaps your assets with the assets of other owners and distributes them. Users send funds to a central address and receive distributed, split-up transactions from that address. After blending the coins, nobody can track your payments.

Let’s look at an example. Jack has gotten three payments:

• 2 BTC purchased at Binance
• 3 BTC from his friend
• 4 BTC for selling products in his online store

If Jack sends all of his BTC in one transaction, he will lose his privacy. Binance or a government organization can track Binance transactions joined to other payments, find out information on other funds sent in the same transaction, and expose him for selling products in his store.

To avoid this, Jack can use a transaction tumbler. He sends his transactions to the tumbler, where other users also send their own assets. Coins sent by Jack to the mixer are combined with the coins of other users, split up, and joined with other transactions. Afterwards, Jack receives his coins in the form of different transactions equal to the amount he has sent without the mixer fees. This allows Jack to safeguard his privacy and launder money he has received for selling products in his online store.

Transaction mixer 3

Popular Transaction Mixers

There are several popular transaction mixers, including:

• BitMixer
• BitBlender

BitBlender is a hidden service based on smart technology for hiding payment history and providing absolute anonymity. This service allows erasure of all connections with cryptocurrency you have purchased or sold. In this way, nobody can track payments. This easy-to-use service doesn’t require private data; the user can just send funds and receive new ones. With this tool, you can protect your BTC from blockchain analysis.

What Is a Transaction Audit?

A transaction audit is a service provided a report about processed transactions. This transaction audit consists of two main parts. The first part provides the user with information about transactions added to the distributed ledger, the second section provides information about an automatic journal. When a new transaction is processed, a transaction audit assigns a number to the transaction group. Every number of the transaction audit refers to a group of transactions.

Sometimes, cryptocurrency exchanges employ a cryptographically verified audit to provide third parties, including their customers, with the confidence that their funds are held reliably, or to find stolen coins. There are plenty of cryptocurrency audit services, for instance, Cryptoshy. This client applies the libcoin database. It provides users with the opportunity to manipulate other users’ wallet structures, starting from single key accounts and ending with multi-signature wallets.

How to Use BitBlender?

To use BitBlender, follow these steps:

1. Download the Tor Browser Bundle.
2. Enter the BitBlender URL http://bitblendervrfkzr.onion/
3. After these steps, you can create an account or use “Quick Mix” to mix your coins quickly.

How CoinJoin Mixes Your Transactions

If you want to hide your payments, you can use another way to do this. It’s based on the same method of blending coins used by Jack and is also very effective.

The developer of Bitcoin Core, Gregory Maxwell, was the first to have mentioned this method. It was called CoinJoin and was invented not for illegal actions with cryptocurrency, but for protecting privacy. How does everything work? Transaction inputs don’t depend on each other. When a transaction contains inputs from John and Emma, both of these users sign this transaction to confirm it. As compared to standard transactions, CoinJoin mixes the inputs and outputs of different groups of users into one transaction. Every member of this group signs this transaction to make it valid. This method provides the opportunity to include inputs and outputs of different people into one transaction and makes tracking a link between different transactions more difficult. Therefore, it becomes more difficult to find out where stolen funds are stored.

As you know, transactions are added to the blocks of the public ledger, and the balance a government can control is just math recorded in the history of your transactions. That’s why blending transactions resembles a process of adding numbers: for instance, “3+2”, and then splitting up it into “1+1+1+1+1” and adding them again. As a result, we have “5”, and nobody can track the route of the transactions.

CoinJoin

How to Hide Transactions Using the Tor Browser

In order to blend your transactions, you should have BTC and install the Tor Browser. Also, it’s necessary to create new a BTC wallet using Tor and another browser. Experts recommend using Electrum to create a new wallet, but you can use any client. Consider this guide for how to hide your transactions via Tor:

1. The first thing you need to do is create a new wallet on the clearnet.
2. Then you need to purchase some BTC and send them to this wallet.
3. Now create a new wallet via the Tor Browser.
4. Send your funds from the first wallet to the second one. This process is necessary for hiding your BTC if Coinbase or a government want to trace where your funds go. You have a watertight alibi that you have sent your money to the wallet of another owner, and you don’t know how he/she spends this money.
5. Create a third wallet using the Tor Browser.
6. You can select any transaction mixer and then blend your transactions between these wallets. To hide your BTC more accurately, you should use multiple addresses and set random time delays.

Other Ways to Blend Your Transactions

Let’s remember Dark Wallet supporting stealth addresses. This feature helps not to launder stolen coins, but to break the usual chain of transactions that provide trackers with an opportunity to control cryptocurrency. It hides transactions by using stealth addresses and mixing. This allows the cleaning of any ownership-identifying traces of coins, because after this process, nobody can track where the transactions came from. This feature provides BTC owners with a great opportunity to avoid unreliable third-party mixers that charge fees for their services.

Dark Wallet

Exchanges offering users hot/cold wallets can serve as transaction mixers or blenders. You can hide all transactions when you deposit your coins to the hot wallet and withdraw money from it.

Conclusion

Although transaction mixers are used to launder effectively stolen cryptocurrency, there are also several pitfalls. If a thief decided to send, for instance, 20,000 BTC to the same mixer, the volume would overwhelm the obfuscation. Mixers are intended for hiding small amounts. Similarly, if someone decided to launder 20,000 BTC via CoinJoin using another 100 BTC, everyone who joined this process would receive highly tainted coins. More time is required to launder a big amount.