There is a common misconception that Bitcoin is an anonymous currency. Many media outlets like to harp on the anonymity of Bitcoin as an “untraceable” transaction protocol. This is wholly incorrect, because of the Bitcoin’s most useful addition to technology: The Blockchain. Since the Blockchain is a distributed public ledger, any information that is associated with a transaction can like that information to that wallet and transaction. This means it is one of the most transparent ways of doing business, not necessarily private at all.
Mixers and Tumblers
Since many Bitcoin users may be looking to keep their online transactions a bit more private, various mixing services have arisen to fill that demand.
In essence, a mixing service mixes the funds of its users together and returns them in an effort to confuse any Blockchain analysts or software from associating those coins with various user data. This is not unlike individuals moving their fiat currencies through countries that have stricter bank secrecy laws than the country they currently live in, specifically the Cayman Islands, Panama, and the Bahamas.
Mixing services have to stay ahead of analysts if they want to keep their service relevant. Also, with a pool of Bitcoin and potentially many users who want to launder any tainted coins, it can be kind of a gamble for the clean user who just wants more privacy. If you get tainted coins, they can be tracked to you.
ChipMixer is looking to fundamentally change the way mixers work to give users better access to privacy. Right now they do not take any commision either. Their set up kind of looks like this.
Bitcoin addresses have been made containing predetermined amounts of Bitcoin in them. These addresses have been funded before any user deposits their Bitcoin to ensure maximum privacy. The user deposits their Bitcoin into the service and they receive their chips as a receipt of their amount.
In an effort to further mix the -now- chips the user has, ChipMixer lets users split and merge the chips they have. This adds an additional layer of random complexity. As does some of their other features such as betting and donating.
This is not a casino, but the way this bit works is that users can bet an amount of chips and will either receive nothing or double that amount. This kind of acts like merging and splitting, but with a bit of fun involved. Donating also acts like merging and splitting, adding layers of complexity. This funds the mixer itself since it does not charge any commission on transactions.
Withdrawing a user’s funds means that their chips will be removed from ChipMixer’s list and then they will receive a private key to sweep the address. Chip withdrawals are not visible on the blockchain, and can even appear as days before the initial deposits to add another privacy layer.
Disclaimer: This is a sponsored article and does not necessarily reflect the opinions or actions of any employees of The Merkle.