Ethereum has made a mark as a platform on which developers build decentralized applications (dApps). This has made ether among the best known cryptocurrencies in the coin market. Nevertheless, like Bitcoin, the Etherum protocol is transparent, making it easy for anyone with a copy of the ETH blockchain to view all the transactions any other person has made on the network.
All the benefits derivable from decentralization which enables the users take charge of their financial transaction on BTC and ETH networks have this privacy setback. In essence, every other person with enough interest or motivation could track your transaction and with some persistence even know the identity of the owner of the wallet.
Considering that these are the digital assets with the highest demand due to their innate qualities as instruments of transfer and storage of value, it is necessary to ameliorate this disadvantage. This is even more so considering that privacy coins such as Monero and Dash have come under direct scrutiny from regulators.
Mixing Services To The Rescue
Bitcoin and Ethereum tumbling services are increasingly becoming an integral part of the cryptocurrency ecosystem. This is especially so as more users realize that their wallets and transactions are accessible to third parties that they’re not even aware of. The risk of hacks and losing their funds incentivizes the need to use coins privately.
Essentially, mixing services such as Bitcoinmix.org act enhances the privacy of the user by dissociating their wallets from previous transaction. There are several ways this is accomplished. In making transactions with a merchant, a holder of Bitcoin or Ethereum could use the address of the mixer to send payments. This would keep their wallet address concealed.
They could also send their coins to another wallet after tumbling the coins. The coins sent to the receiving wallet are different from the original coins sent to the mixer. So third parties scrutinizing the transaction from the previous wallet cannot trace it to the new one.
How Does Blender Work?
With the advancement in blockchain analysis, it became obvious that transactions on blockchain networks such as BTC and ETH are not anonymous. Examining the funds in a wallet and tracing its transaction history is easy. This exposes the owners to various types of risks so mixers work by obfuscating the transaction trail between wallets.
When funds are sent from wallet A to the blender (tumbler), the service mixes the coins with its own reserve and sends new coins to another wallet B that the owner provided. The new coins are different from those earlier sent to the mixer. So the trail goes cold from the point of view of the blockchain analysis. This effectively keeps the owner of wallet B anonymous.
Originally, tumblers were mainly designed for Bitcoin network but with the demand soaring for the anonymous use of other coins, tumblers such as Bitcoinmix.org have extended their service to other digital currencies such as Ethereum.