Cryptocurrency Mixer - what is it and what is it for?

Cryptocurrency Mixer is a special technology for distributing digital coins to increase client confidentiality during a transaction.

Even though any cryptocurrency system a priori assumes absolute decentralization of all processes and anonymity of each participant, additional technical solutions are still required to unconditionally support these conditions. The cryptocurrency Mixer is such a tool, which is used more and more often today, especially when conducting transactions for large sums of money or with many payments.

The essence of a coin mixer

The principle of operation of cryptocurrency Mixers is that transaction data is mixed, as a result of which it is possible to hide the source of origin and purpose of transactions reliably.

Simply put, through the Cryptocurrency Mixer, coins from different participants are initially mixed in a special storage, after which they are randomly distributed to outputs, which does not allow accurate tracking of the entire path of the coins to the final recipient.

In addition to ensuring the confidentiality and anonymity of each participant, Mixer cryptocurrencies are also used as an additional means of protection against theft and hacking of data and crypto coins.

How the crypto mixer works step by step

Technically, the entire chain of actions that is followed when working with cryptocurrency Mixers looks like this:

  • initiation of a transaction by the user, and sending is carried out to the mixer address;
  • coin mixing, which typically involves breaking coins into small amounts and combining them with pieces of money from other users;
  • obfuscation - for this purpose, the method of delay, routing through various crypto-wallets, and changing the denomination of coins is used;
  • distribution - users receive an equivalent amount in crypto, but only in a different format, making it virtually impossible to trace the initial connection with the original funds.

Only after all these processes are completed is the transaction confirmed.

Benefits of Cryptocurrency Mixer

The use of such a tool in any cryptocurrency system provides users with the following advantages:

  • significant increase in confidentiality and anonymity of a specific participant in the system;
  • reliable concealment of the source of origin of money and its purpose;
  • increasing protection against blockchain analysis, which some organizations use to identify participants in cryptocurrency systems.

Since determining the address of the crypto wallet sent in this case is much more complicated and practically impossible, the level of protection against theft or hacking of the user’s personal data increases significantly.