Topic: The prospect of mixers in a congested mempool (Read 369 times)

For bitcoin mixing itself this is unlikely to cause serious damage, but for individual providers of these services it is quite likely. It’s just that weak players in this market will be forced out by stronger ones, which will create some kind of monopoly, or rather, only large players and mixers will remain. I am a supporter of healthy competition and believe that the more bitcoin mixers there are, the better it is both for users (in terms of price-quality ratio of services) and for the crypto industry as a whole (it is easier to exert influence and pressure when there are few mixers) .

In general, any problem prompts the search for a solution to this problem and the improvement and progress of mixing services. Therefore, the problem with an overloaded mempool for mixers is actually not a problem at all, but a push for improvement. Sooner or later this problem would still arise, because many are waiting for bitcoin-mass adoption, but then the mempool will be constantly overloaded.

Yes if this will continue to long term but I doubt people will keep using high transaction in long term because they will surely use an alternative to limit transaction until the fee back to normal.

There might be some adjustments in the future if this continue like hard fork or something to deal with the ordinal shit. Transaction fee will surely subside and this just some minor difficult time not only for mixer but to all services on Bitcoin ecosystem that rely on frequent sending of transactions.

for mixers that do separate reserves.. where inflows are obfuscated for a week+ and the outflowed to different user a week+ later.
meaning the coins post-mix are from someone else last week-month..
these types of mixers have yet to feel the hurt of the fee mania.

mixers where the UTXO taint path from deposits(inflows) is only few blocks, hours, days (poor design mixers) they will feel the hurt more and will change their commissions or stop offering services or become less obfuscated to cut costs

I've noticed a slight decrease in the number of free remixes I've been getting with Whirlpool coinjoin during the last few days, but nothing major, and overall capacity continues to increase: https://nitter.cz/SamouraiDev/status/1725484162734256442#m. So I'm continuing to mix my coins despite the high fees, and I'm not paying a single sat for the privilege.

Your other option would be to perform a single swap from Bitcoin to Monero, and then transact with Monero as much as you want where fees are more reasonable.

Indeed, you misunderstood my point. Some mixers do not support deposits after 24 hours. Let's say you send them a fund with 25 sat/vB, but the current fee is over 100 sat/vB. If congestion in the mempool does not decrease in the next 24 hours and you cannot bump the fees, it will remain unconfirmed. But if it gets confirmed after 25 hours, the mixer will close your order automatically, and any deposit made to those addresses will be considered a donation. So, you are losing your coins for this issue. I hope the explanation makes sense.

Cheap transaction fee does not last forever. Expensive transaction fee does not last forever.

Coin mixing services if have good products, can last very long time and their business operation will help them to gain good profit. Like exchanges or gambling site, if they are big, they can waive withdrawal fees for users when transaction fee is expensive. Because they do earn very big profit when fee is not expensive and likely time of cheap fee is more than time with expensive fee because bear market lasts longer than bull market.

I think they would also combine different transactions to make it one transaction that goes to different wallets so that they could save some transactions fees and just bump if the fee increased. Well, the fees sre from the users of the mixers so I don't think it would be a challenge for the mixers but a challenge for those who will use the mixers because if the fee is low then you will have to wait longer.

Mixers aren't really in the negative here per se. The fact that this is a niche aspect in the world of crypto allows them to literally pass the increased fee charge to their users, or they can be altruistic and as what some in this thread have said, take part or the entire fee for the user, in which case they are still not at a disadvantage as this will literally paint them in a good light, and allow users to trust them fully. Mixers are going to be the last of your worries when congestion happens, since for one, as said earlier it's a niche, not everyone in this industry wishes to have their cryptocurrencies mixed up, so it's not like the entire crypto industry is affected, and this also opens the opportunity for mixers to charge their users a little higher, as once again mentioned beforehand.

Yes, this would be a big problem for them and especially for those people who have to make payments on time. This problem is hitting big businesses while small businesses must already have moved to another payment method like Matic, or tokens with lesser transactional fees. But, BTC mixer can't even do that as they are dealing in BTC coin, not in Matic.

They might prefer to pay the high transaction fee for the sake of customers but this will cost them a lot, I can't imagine what would be the situation of small vendors who must have left the BTC as payment method a long time ago.

Another point is when we have to send funds on the mixer-provided wallet, we also have to pay the high fee and also have to wait for a longer period of time for the completion of our transaction from our side.

You make a good point about how the latest network congestion has driven transaction fees and wait times through the roof.  This could really gum up the works for mixing services, seeing as each mixer tries to stand out by having faster settlement times.  I'm curious whether these snags might push the industry to come up with some clever solutions, or if this will be a huge obstacle for the whole mixing landscape going forward.   

It's anyone's guess whether the congestion and delays are just a temporary slowdown that mixing platforms will find creative ways around, or if itll remain a persistent issue that really hampers adoption.  Perhaps some companies will explore methods like batching multiple swaps together, or tapping other Layer 2 solutions to keep costs and lag time lower.  One thing is certain, the mixing of smaller amounts of coins will probably die out, which will certainly affect the anonymity of many users' transactions.

Want to say the same thing on which if you are that someone who do really tend to mix out 10k or even 1k worth of coins then even up paying $20-30 when it comes to fees then it wont really be that an issue.

Not to make out some discrimination about into those small time mixer users to be mindful about the fees. We do know that mixing services arent the ones who are mainly affected with this recent surge
of network transactions which we know that this isnt something a condition that do happen often.If it turns out that there would really be some additional fee then it would be understandable that mixers would really be just adjusting basing up on to those dynamic fees. It might look that much reaching about 4.7% then it would be on your choice whether you would be proceeding or not.

Just like on what i have said which people who do make use of these mixers arent talking about small amounts that they are transacting.
So fees wont really be that issue basing up on the privacy that it do gives. So it wont be that much of an issue.

Yes, a congested Bitcoin network would be challenging for the mixer business. But I don't think this is a permanent issue that has been normalised already. However, there is an easy solution for mixers as well: paying a high fee could help with faster transactions. Since they are running a mixing business, they should have an idea of how it should be done. This isn't a critical situation that would be solved just by increasing fees.

It makes no sense to run a business at a loss but crypto is a business where you have to consider your incomes in Bitcoins and in dollars too. At the end of the day, crypto casino owner has to pay salaries in dollars, not in bitcoins. If company earns bitcoins but bitcoins go down and down, it's not good either. I can say from my experience that companies keep their eyes on how much coins they earn from their business and also modify their budget when price significantly rises and falls. Btw since here we talk about bitcoin mixers, it's clear that if people want to mix coins, they may not mix coins right now because of high fees but these people will mix their coins later when fees go down. Imagine that averagely 10 people mix coins per day, now start counting:10 people want to mix bitcoins today, 10 more want to mix tomorrow but transaction fees are very high. We have 20 lost client at the moment but imagine fees are low the day after tomorrow. What happens? Our 20 clients and let's expect another 10 guys, 30 guys visit platform and mix today (the day after tomorrow I was talking about). Mixer didn't lose clients or profits, they received profit later because of delay and that delay was caused by high fees. I think this situation is temporary and when the balance sheet comes in the next month, if fees go down, they'll see that they didn't experience significant loss because of this delay.

That's a good point you have noticed, actually the regular users of mixers must be facing this issue as the transaction on start must also take a lot of time, then the transaction from the mixer side will also take time and most of the mixer as you stated have 24 hours expiration link, that would raise another issue.
But I think it can be solved easily, all they have to do is, increase the expiration time but this might change the behavior of there customers and there is no doubt that delay in our transaction adds more privacy to them but if our transactions will be considered as donation to these mixers due to the 24 hour expiration policy and due to the congestion of network, then privacy will sucks.

I agree that the recent problem of too many transactions in the Bitcoin network is causing some issues for coin mixing businesses. Coin mixers usually have a time limit for when transactions need to be finished which can make them more attractive to customers. But with the current problem of too many transactions and delays in the Bitcoin network it may be harder for coin mixers to finish transactions on time.
This is really a challenge for coin mixing when the network congested. Coin mixer show the time and try to settle the transaction in the meantime. Because they pay the high fee for a transaction to speed up the transaction. Therefore they always remain stand in too much transactions and in congested network.

Good catch, well I just found another reason for this transaction fee reported by DaveF post What's with the 10000+ sat / vb Transactions, like paying $3,550 for a single transaction looks idiotic until reasons like this don't come to mind. Maybe the person who made this TX fee is a mixing service who has to prove the transaction on time.

But I think mixers can deal with such situations by signing an agreement at first where they might say you might have to wait for the transaction to get processed if you get stuck in a congestion network. If they do it, then we as consumers have no other option but to agree with it.

And talking about more delay doesn't it add more security, but yeah a delay can cause trouble.

Yes I know. I only referred to it because you did not refer to it in your discussion, but part of the fee the mixer is charging its users.

Sometimes it can take a longer time before a mixer will process transactions. I have experienced this before when mempool was congested. I am referring to mixers generally. I guess the delay sometimes can be as a result of mempool congestion and the fee used to proceeds it which is high but not high enough to get the transactions confirmed as fast as possible.

21 million bitcoin 

Generally speaking, you are correct. If the mempool continue to be congested as it has been today, it will not be profitable for mixers and they will have to increase their fee. But let us just assume that mempool will still become less congested and the mixers will make profit.

I think you’re not getting what @Learn Bitcoin is saying, some mixers have deposit addresses that expires after 24 hours and if the deposit gets beyond that 24 hours before getting any confirmation wouldn’t that be an issue?

My answer is
1. Anybody using mixer should be well equipped with the knowledge of transaction fees and might be using wallets that allows bumping, this won’t be an issue.
2. Bitcoin address do not expire, so what that 24 hours means is that you can’t deposit on that address again for privacy sake just like why Hierarchy Deterministic wallet are for but when the deposit drops even after 24 hours you will be able to spend it, except maybe the mixer has it’s own different rules guiding that

any "cheap" mixer with small commissions are already a bad thing.. because their internal middlemen systems of shuffling coins(hops) are not much hense why they are not charging much commission(they dont have many self transfer fee's when shuffling internally).. thus the chain analysis companies can easily link inflows and outflows. especially ones advertised as "fast" too (less possibilities)

but yes any service.. mixers included, that do many spam hops of 1-confirms to shuffle coins will see costs multiply making it expensive to use a service, so people will stop using services.. as seen and pointed out by yourself
..

however you will see the mixers that do SOME middle-man shuffling do LESS of it to cut their costs.. so many "good" mixers with better pattern obfuscation will do less spam hopping of shuffling coins of their internal custody/reserves.. to save cost but to try to stay in operation. so expect this to happen

bad obfuscation ("cheap" "fast" mixers) go out of business because they cant afford to run while still "cheap commission"
bad obfuscation ("cheap" "fast" mixers) change their commission to try to survive

good obfuscation ("commission is x# multiple fee" mixers) go out of business because they cant afford to run while still "x# multiple fee"
good obfuscation ("commission is x# multiple fee" mixers) turn to bad obfuscation by cutting down on the middleman processes

Both of the party are affected here since you need to send the coins and at the same time the mixer also in lose if they not increase their fee. We can expect not many people are going to mix their coins at the moment.

At least you will not lose your coins, but you need to wait until few days or even a weak to be confirmed. If it's too long, your transaction might dropped from the mempool and you need to rebroadcast your transaction.

Small amounts will have more and more problems as time goes by. Not only at mixing. At any kind of on-chain transfer, after all.
So mixers (will) have - actually the few that maybe didn't already - to set up a minimum amount to handle or a minimum fixed[1] fee to take, so they are not losing money off this.

[1] it can be, instead of fixed fee, to be one calculated/estimated based on "current" network fees, but that is risky because the network fees can vary a lot over rather short time and such algo can give extra clues on what the mixer is doing under the hood.

You forget that for each extra address, the mixer has to spend another tx, unless he wants to make a mockery out of their service and dump all mixed tx in one tx with 100 outputs once a day!
The user also has another input that needs to be moved, making it even more expensive for your average Joe who just moves a bit of money!
0.0003 BTC won't pay you right now even for the next 10 blocks for a tx !


Exactly my point, so what was the last sum you mixed?  


Makes no sense, one it's having your investment grow, it's a different thing than your business losing money.
Do you think that if Stake for example would be losing 1$ million a day on their casino they would keep doing it because their stash has doubled in value? Again, makes no sense running a business at a loss.

It can really be a major challenge for bitcoin mixer owners because ridiculously high transaction fees stop people from making a bitcoin transactions. When bitcoin transaction is high enough that it can eat up to two digits percentage and then on top of that mixer is also going to take additional fees from you, then you sit and wait when fees go down or stop to care too much about your privacy.

It can also be temporary challenge for bitcoin mixer owners because if people just wait for fees to go down but deep in their bones they want to mix it, these customers will visit bitcoin mixers when fees go down and in overall, mixers will experience quick burst of users and then things will get smooth.

Bitcoin mixers might experience loss in bitcoins today but their bitcoins have significantly increased in terms of USD value and we shouldn't forget it. After all, bitcoin mixer business owners have families and they need USD for their daily activities. Btw to be honest, small transactions have never been the major profit source for bitcoin mixers, they make money from large transactions by collecting 1%-5% fees from them. It's better to have user who mixes 10 BTC in one process instead of 20 users who mix 0.002 bitcoins.

You pointed out a very important thing here. Mixers are having issues releasing withdrawals, and users face the same issue when depositing into a mixer. Some mixers do not support deposits after 24 hours of generating the address. The time starts to count down once the order gets created, and the service waits for the deposit.

Imagine you made a deposit to a mixer and cannot bump your transaction fees for some reason. At the same time, the mixer's deposit address won't be valid after 24 hours. This will be the worst situation for anyone.

For each address that you want to mix, there is also a flat fee of 0.0003 BTC, including the fee that you referred to above. Also the fee you referred to is in percentage and some people will mix huge amount of bitcoin. If the mixing service do not see it pay again, the fee will be increased, which more mixers will also do. The mempool will also likely become less congested again. Although it is true that it is a challenge to mixers for those that mix small amount of coins.

Good point and nice question. It got me thinking as well. And this time, those that can afford to use mixers at this moment are the ones with huge funds that they have to mix.

They won't mind the fees if they'd do it with thousands worth of transfer that they need to mix and even more than that.

But for small transactions, it's not really recommended at all. So with probable huge amounts, they earn from those while there's not that much volume from them at all ATM.

Your mixer changes from 0.7 to 4.7%.
If you make a deposit the mixer has to move the coins you sent, they also have to send you the mixed outputs, that's two tx at least, not including at least one just the bare minimum before the final output as they don't want to pay directly from, splitting that in half since they can use multiple outputs,  that and you got at the current fees around 30$ in fees if the user chooses 0.7% and mixes $1000 worth of BTC your mixer loses $24 every mix.

Love how the whole thing has become so elitist right now, the fees are nothing if you move or mix $10k otr $100k worth of BTC, because yeah, that's your average Joe money for the week around here, right?

I do not think so, with the rate people are making bitcoin transactions. If you look at the amount of fee mixers are charging their customers, it is also not small at all and many people do not think about the fee.

Also there will still be a time the mempool will be less congested again, unlike how congested it is today and some days back.

Well, nice surprise, at least I'm not the only one thinking about this!

I've seen numerous users saying that all you have to do to avoid high fees is to stop paying for stuff, well, since mixing right now small amounts is a losing business for some, I wonder if those guys recommending this and carrying a mixing signature would be also ok with mixer not advertising during this period either as they wound;t see much business anyhow!

It's easy to say wait for the "spam" to end, I wonder how easy is to tell a business to close down till the spam end!


Right now as we speak any cheap mixer with small fees would be losing money under $5k and the more expensive ones under 1k, so of course it's affecting the business, but ...big blocks are bad! Cause...reasons!

Mixers can solve this problem by paying higher fees and bearing the cost on behalf of the users or passing it to them, which will make mixers fees being slightly higher due to the increase in withdrawal fees. Therefore, the effect will be limited if the fees are high for several days or weeks, but the continuity of high fees may pose a problem, especially for small mixers, which may You cannot afford the high fees or users may not be able to afford to pay 10% of the transaction as a fee to the mixer.

The most important question will be about privacy. Paying higher fees will make the mixer transactions have a distinct fingerprint, which will facilitate the task of identifying them.

There is no doubt that Bitcoin mixer is a great innovation. It is actually what makes Bitcoin retain some of its key attributes like privacy and anonymity. However, the recent congestion of the mempool resulting in high transaction fees and longer waiting time for transactions confirmation might have huge impact in mixing business considering that mixers usually have time range for settlement, this being unique for each mixer and often used as competitive advantage.  

Do you think this could be a major challenge to the business of coin mixing?