Bitcoin (BTC) was first introduced to the world in January 2009. Developed by the mysterious and enigmatic Satoshi Nakamoto, Bitcoin was intended to be a decentralized currency with inflation-proof characteristics.
Unlike cryptocurrencies, fiat currencies are issued by a central monetary authority that controls its supply in the marketplace. Because of this, the value of a particular fiat currency is dependent on its issuing government’s monetary policy.
By now, many of us would probably have heard about hyperinflation and the risk of printing money uncontrollably.
As can be seen in the United States, continuous monetary stimulus packages may lead to an erosion of the U.S Dollar’s buying power. In simpler terms, too much money in the market, leads to an increase in prices everywhere.
This is the situation which Satoshi Nakamoto hopes to avoid with the creation of Bitcoin. Bitcoin is entirely decentralized and its supply is not controlled by anyone. With a fixed limit of 21 million coins, you can’t just print more Bitcoins.
Being decentralized, Bitcoin became a favorite medium of exchange for users on the deep web – a place where anonymity is prized. However, criminals also began to realize that transactions made with Bitcoins could actually hide the identity of a buyer/seller.
This is because Bitcoin transactions are not processed by banks or any type of financial institution. Instead ownership records and transactions are stored on a blockchain i.e. digital ledger.
In the early days, this made it difficult and even impossible to track down the identities of those performing Bitcoin transactions. Something in which Dread Pirate Roberts aka Ross Ulbricht used to his advantage by creating a digital marketplace for illegal drugs known as the Silk Road.
Naturally, this would attract the ire of governments all over the world. A currency that allows for untraceable transactions would simply leave too much at stake. Hence fears have been growing over rumors of increased government oversight and crackdowns.
This is why Bitcoin can never be truly classified as anonymous. Instead, most crypto enthusiasts regard it as being merely pseudonymous.
You’ll be able to keep your identity hidden to a certain extent. But a determined investigator will be able to track you down and determine your identity over time.
This is why cryptocurrency tumblers are becoming increasingly popular over time. A deficit in government trust and fears of our privacy being invaded have driven crypto enthusiasts to develop more innovative ways of keeping transactions secret.
Enter the cryptocurrency tumbler.
What is a Cryptocurrency Tumbler?
Tumblers basically function as a VPN or Virtual Private Network for your Bitcoins and other cryptos. VPNs encrypt and transmit your data over a secure network from one point to another.
Cryptocurrency tumblers provide a mixing service for your cryptocurrencies when you perform a transaction. Here, different transactions are mixed together to make it impossible to uncover their origins along with the identities of the recipients and senders.
The sheer randomization of all these transactions means that your privacy is guaranteed. Hence making cryptocurrency transactions anonymous once again. Besides transactions, the amount of coins sent will also be mixed and randomized to make tracking even more difficult.
So the next question is, how safe are these services?
Are Cryptocurrency Tumblers Safe?
Yes and no to a certain extent. Most sites provide a legitimate service to clients but you’ll need to be careful with who you’re dealing with. When using such services, always remember to do some research first.
Are Crypto Tumblers Legal?
Crypto tumblers occupy a legally gray area in the market. Given the dim view that governments take on such sites and the people who likely patronize such sites, you can expect severe regulations to come in the future.
Also, in some countries using a crypto tumbler service may actually land you in hot water. You may run the risk of getting mixed up ( pun intended) with a money laundering charge if the authorities decide to charge you.
The days of anonymous cryptocurrency are likely to be at an end. With increased government oversight and monitoring, the risk is simply too great.
To learn more about Bitcoin tumblers check out this great article from Tezro: https://blog.tezro.com/best-tumbler-mixer-services/