What are the dangers of mixer/tumblers

Abiky

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Quote from: Bolivar_Tony on June 26, 2023, 04:51:15 PM

Zero-trust mixers for Bitcoin or its forks are not as prevalent as they are for Ethereum. While there may be online mixers available, they often involve trusting a third party. However, exploring alternative methods such as multi-signature transactions with divisible inputs could potentially contribute to obfuscating transaction histories. It's essential to research and assess the security and trustworthiness of any mixer or method before utilizing it for privacy purposes.

Bitcoin does have zero trust mixers. The Samourai wallet has the "Whirlpool" privacy technique to obfuscate BTC transactions. There's also the Wasabi wallet which uses some sort of "CoinJoin" privacy technique. It's just there are not many options available for Bitcoin than it's the case with Ethereum these days. I wonder why developers aren't that interested in making other non-custodial mixers for BTC? It's likely they're afraid of getting caught and penalized by the government. The same can be said about ETH, although the smart contracts platform isn't as popular as Bitcoin is.

One needs to be aware of the dangers of using a mixer, especially when there's a huge crackdown against anything privacy-oriented in the crypto/Blockchain space. You could easily get flagged by the government, even when you're not doing anything wrong. Not even converting your BTC to XMR would do any help. The only way to avoid suspicion is to cash out your BTC to Fiat through a P2P exchange (no KYC), and then use the cash to buy Monero (XMR). I think all centralized mixers will ultimately die, leaving us with non-custodial (decentralized) mixers as our only option. I'm fine with that as long decentralization wins in the long run. Just my thoughts Grin

Apocollapse

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Quote from: KaliLinux on March 24, 2023, 02:34:09 AM

I do understand the whole concept of mixers and I have always wondered why that. If there is nothing to hide, why will I go through the risk of losing my Bitcoin if I might not get them back? Coming back to your statement, you do understand that has been the problem with Bitcoin transactions or Crypto in general, how many places can we spend crypto for now or how easy can you find someone that you can trade in exchange for goods/services? even after using the DEX, you still need the bank at least for now may be it might change in the future.

There's always a thing someone need to hide, will you feel safe if you share your total assets, where the assets you have, how to access it and your home location to stranger like me?

Yeah there's a chance you can get scammed trading via P2P either in site or directly trade, this is why you need to trust the person you wanted to trade if you trade big amount money. Well there are many ways to receive your money, not only through bank account.

Bolivar_Tony

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Zero-trust mixers for Bitcoin or its forks are not as prevalent as they are for Ethereum. While there may be online mixers available, they often involve trusting a third party. However, exploring alternative methods such as multi-signature transactions with divisible inputs could potentially contribute to obfuscating transaction histories. It's essential to research and assess the security and trustworthiness of any mixer or method before utilizing it for privacy purposes.

podluznyj

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Quote from: Ferib on March 19, 2023, 08:18:27 AM

Hi folks, I was looking around into Mixers/Tumblers the other day and stumbled upon some very good research like the zk-SNARKs and TumbleBit. Two technologies that 'obfuscate' transactions, making blockchain analysis a guess fest.

My interest in the mixer is in Bitcoin forks and nothing fancy like Ethereum (which has zero-trust mixers based on zk-SNARKs like Tornado cash AFAIK) but when looking into existing online mixers they all appear to be 'send me coins and I promise I will send them back' kind of vibe.

Aren't there any zero-trust mixers for Bitcoin or Bitcoin forks? or have I been looking in the wrong direction?

Also, could multi-sig transactions with two or more participants (using a pre-defined amount of assets, ideally inputs are dividable by each other, eg, a multitude of 0.001) be used to obscure transaction histories?

For bitcoin mixing services, the biggest capital is their reputation on the network, which is earned over the years. Therefore, popular mixers are unlikely to steal small amounts of bitcoins. However, we must not forget that all mixers are completely anonymous - this is the basis of their existence. After all, any owner of the mixer, if he is deanonymized, will be instantly arrested and charged with money laundering, terrorist financing, etc., which will provide him with more than a comfortable term in any country. And this means that by sending bitcoins to the mixer, you completely trust it - the only guarantee to get your bitcoins back is the obligations of the owner of the service. That is, you act solely at your own peril and risk, and this must be remembered.

Ferib

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One of the main risks is that mixer/tumblers can be used to facilitate money laundering or other illegal activities. By mixing or tumbling funds, user can effectively obscure the origin and destination of their transactions, making it difficult for law enforcement agencies to track and investigate these activities. Another danger is that mixer/tumblers can be used to scam or fraud unsuspecting users. Some mixer/tumbler services may be operated by malicious actors who seek to steal or launder funds, or who may charge exorbitant fees for their services. There is also risk of technical issues or errors when using mixer/tumblers in crypto currency transactions. If a mixer/tumbler service experiences a glitch or malfunction, funds may be lost or delayed, leading to financial losses for users. To minimize risks, it is important to exercise caution when using mixer/tumblers in crypto currency transactions. Users should only use reputable services with a proven track record of reliability and security, and should be aware of the potential risks and limitations associated with these tools.

No thanks, could have asked ChatGPT myself

Quote from: Abiky on June 21, 2023, 06:55:24 AM

Quote from: Ferib on June 19, 2023, 01:15:23 PM

I ended up doing some research of my own and simply made my own 'coinjoin' implementation for Litecoin. I started it pretty basic by having the host create the unsigned (final) transaction for all participants. The host negotiates with all participants and the conclusion of that agreement results in an unsigned transaction. From there, the transaction is passed to the first participant who signs it and passes it back to me so I can forward it to the next participant until every signature was added.

I looked into the Wasabi wallet but none of them are supporting hardware wallets. That kinda makes sense as going back and forth with signing (especially with big transactions) can be an annoying task if done manually.

Lastly, how come all online 'mixers' and other bogus is straight-up a scam? Do people really trust these time-based 'mixers'? To me, they seem to either be a honeypot, a scam, or a scan that hasn't happened yet (exit scam).

Interesting. If you decide to publish the source code or even launch the privacy solution for public use, please let me know. I'd suggest you don't reveal your true identity, or governments will be on your tail. You can see how one of Tornado.Cash's developers was arrested because of his involvement in the project. If he had used a pseudonym, it would've been harder (or almost impossible) to find him. These days mixers are getting scrutinized by mainstream governments, so we should not let our guard down.

I believe all centralized mixers will fail because it's easy enough to shut them down by the authorities. But I cannot say the same about non-custodial or decentralized mixers and/or privacy techniques. Let's see how everything will unfold as crypto/Blockchain tech becomes more popular worldwide.

Obviously, I wrote mine for the sake of educational purposes only as I was researching the possibility of the Bitcoin/Litecoin blockchain, and how I can take advantage to secure my spending. I wrote my journey at https://ferib.dev/blog.php?l=post/Bringing_Obfuscation_to_the_Bitcoin_Blockchain, it's not perfect and I'm looking to improve.

Abiky

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Quote from: Ferib on June 19, 2023, 01:15:23 PM

I ended up doing some research of my own and simply made my own 'coinjoin' implementation for Litecoin. I started it pretty basic by having the host create the unsigned (final) transaction for all participants. The host negotiates with all participants and the conclusion of that agreement results in an unsigned transaction. From there, the transaction is passed to the first participant who signs it and passes it back to me so I can forward it to the next participant until every signature was added.

I looked into the Wasabi wallet but none of them are supporting hardware wallets. That kinda makes sense as going back and forth with signing (especially with big transactions) can be an annoying task if done manually.

Lastly, how come all online 'mixers' and other bogus is straight-up a scam? Do people really trust these time-based 'mixers'? To me, they seem to either be a honeypot, a scam, or a scan that hasn't happened yet (exit scam).

Interesting. If you decide to publish the source code or even launch the privacy solution for public use, please let me know. I'd suggest you don't reveal your true identity, or governments will be on your tail. You can see how one of Tornado.Cash's developers was arrested because of his involvement in the project. If he had used a pseudonym, it would've been harder (or almost impossible) to find him. These days mixers are getting scrutinized by mainstream governments, so we should not let our guard down.

I believe all centralized mixers will fail because it's easy enough to shut them down by the authorities. But I cannot say the same about non-custodial or decentralized mixers and/or privacy techniques. Let's see how everything will unfold as crypto/Blockchain tech becomes more popular worldwide.

Velemir Sava

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Quote from: ?? on ??

One of the main risks is that mixer/tumblers can be used to facilitate money laundering or other illegal activities. By mixing or tumbling funds, user can effectively obscure the origin and destination of their transactions, making it difficult for law enforcement agencies to track and investigate these activities. Another danger is that mixer/tumblers can be used to scam or fraud unsuspecting users. Some mixer/tumbler services may be operated by malicious actors who seek to steal or launder funds, or who may charge exorbitant fees for their services. There is also risk of technical issues or errors when using mixer/tumblers in crypto currency transactions. If a mixer/tumbler service experiences a glitch or malfunction, funds may be lost or delayed, leading to financial losses for users. To minimize risks, it is important to exercise caution when using mixer/tumblers in crypto currency transactions. Users should only use reputable services with a proven track record of reliability and security, and should be aware of the potential risks and limitations associated with these tools.

While there are risks associated with a mixer/tumbler service there is another side that we should look at as well e.g. in terms of Enhanced Privacy and Security, a mixer/tumbler can provide increased privacy and security for authorized users. Cryptocurrency transactions are often recorded on public blockchains, making them potentially traceable to anyone. Mixer/tumbler services allow users to obfuscate their transaction history, protect their privacy and prevent targeted surveillance or tracking. This can be especially beneficial for individuals in countries with oppressive regimes or those who are concerned about their financial privacy.

Second is Utilization for Legitimate Purposes, The mixer/tumbler may also be used for lawful purposes. For example, individuals may wish to separate their personal transactions from business-related transactions for accounting purposes. meaning a mixer/tumbler service can help achieve this separation, ensuring accurate financial records without compromising privacy. In addition, they can be used to improve fungibility, where all units of a cryptocurrency become indistinguishable, making the currency more exchangeable and facilitating wider adoption.

Ferib

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I ended up doing some research of my own and simply made my own 'coinjoin' implementation for Litecoin. I started it pretty basic by having the host create the unsigned (final) transaction for all participants. The host negotiates with all participants and the conclusion of that agreement results in an unsigned transaction. From there, the transaction is passed to the first participant who signs it and passes it back to me so I can forward it to the next participant until every signature was added.

I looked into the Wasabi wallet but none of them are supporting hardware wallets. That kinda makes sense as going back and forth with signing (especially with big transactions) can be an annoying task if done manually.

Lastly, how come all online 'mixers' and other bogus is straight-up a scam? Do people really trust these time-based 'mixers'? To me, they seem to either be a honeypot, a scam, or a scan that hasn't happened yet (exit scam).

Abiky

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Quote from: TimeTeller on March 25, 2023, 05:57:55 PM

The Chipmixer issue really is a big blow to the crypto mixer business.
They are one of the top and reputable mixers in this community.
So right now, we don't know how safe and secure they are once the government seized their operations.
You can try other mixers, but as you said, use small funds if it will go thru smoothly.
However, if you don't need this service, why not just use the regular trading platforms for your crypto needs?
Ask yourself, how badly you need the 100% anonymity that you will go thru via mixer services?

Using mixers is a gamble these days. You'll never know when governments will shut them down, or if you could get flagged by the authorities after using them. With crypto being heavily-scrutinized by regulators, we should expect mixers to disappear in the future (centralized ones, of course). Unless crypto/privacy advocates fight for privacy/anonymity, mixers won't be going anywhere soon.

I'd "stick" with non-custodial mixers just to be safe. Some BTC wallets already have built-in mixing features (eg: Wasabi and Samourai) so there should be nothing to worry about. Who knows if governments give up in their efforts to try to take down crypto/Blockchain tech for good? Just my opinion

TimeTeller

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Quote from: Johnyz on March 25, 2023, 05:55:28 PM

Quote from: Apocollapse on March 24, 2023, 01:45:54 AM

Quote from: woez on March 22, 2023, 03:16:11 PM

Mixers or tumblers are services that allow users to mix their Bitcoin transactions with those of other users to obscure the source and destination of funds. While mixers can be useful for maintaining privacy, there are also some potential dangers associated with using them. There are several services that claim to offer this level of security, but it is important to be careful of any claim that the mixer is completely secure or anonymous and at worst is blacklisted by exchanges and other service providers.

Any person who have use mixer or tumbler know if centralized exchange, bank, and government are blacklist mixing usage because it can be used to money laundering. This is we have an option to use decentralized exchange and cash out without bank, but it's hard since you need to find someone who's willing to trade with you. Mixing isn't make your transaction secure, but it just to increase your privacy into 100% anonymity.

Top mixer are being sued by the government now because of fraud issue so it will be hard to spot a good one if you still concern about your privacy. Dealing to someone is not safe as well, you can’t fully trust their statement alone, it should be based on their trust rating as well. If your purpose is privacy, then try to use other platform who offers this kind of services, just try it for a few bucks and see how it works.

The Chipmixer issue really is a big blow to the crypto mixer business.
They are one of the top and reputable mixers in this community.
So right now, we don't know how safe and secure they are once the government seized their operations.
You can try other mixers, but as you said, use small funds if it will go thru smoothly.
However, if you don't need this service, why not just use the regular trading platforms for your crypto needs?
Ask yourself, how badly you need the 100% anonymity that you will go thru via mixer services?

Johnyz

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Quote from: Apocollapse on March 24, 2023, 01:45:54 AM

Quote from: woez on March 22, 2023, 03:16:11 PM

Mixers or tumblers are services that allow users to mix their Bitcoin transactions with those of other users to obscure the source and destination of funds. While mixers can be useful for maintaining privacy, there are also some potential dangers associated with using them. There are several services that claim to offer this level of security, but it is important to be careful of any claim that the mixer is completely secure or anonymous and at worst is blacklisted by exchanges and other service providers.

Any person who have use mixer or tumbler know if centralized exchange, bank, and government are blacklist mixing usage because it can be used to money laundering. This is we have an option to use decentralized exchange and cash out without bank, but it's hard since you need to find someone who's willing to trade with you. Mixing isn't make your transaction secure, but it just to increase your privacy into 100% anonymity.

Top mixer are being sued by the government now because of fraud issue so it will be hard to spot a good one if you still concern about your privacy. Dealing to someone is not safe as well, you can’t fully trust their statement alone, it should be based on their trust rating as well. If your purpose is privacy, then try to use other platform who offers this kind of services, just try it for a few bucks and see how it works.

el kaka22

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I guess that there isn't really any "danger" if you are a regular person, it doesn't matter to me nor anyone of you.

However, the bad people in the world, cartels, terrorists, mafia, whatever you can think of could start using it, or maybe some of them already uses it and that's a danger to the government because it's their job to stop them. That doesn't change anything in my life, I still live the same exact life as I was living, but it makes the job of government a bit harder because now it's not cash they need to follow, it's bitcoin and other crypto, and if they are using mixers then it is hard to follow that cash. Hence, it's a risky business.

kaseygriffin

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Quote from: KaliLinux on March 24, 2023, 02:34:09 AM

Quote from: Apocollapse on March 24, 2023, 01:45:54 AM

Quote from: woez on March 22, 2023, 03:16:11 PM

Mixers or tumblers are services that allow users to mix their Bitcoin transactions with those of other users to obscure the source and destination of funds. While mixers can be useful for maintaining privacy, there are also some potential dangers associated with using them. There are several services that claim to offer this level of security, but it is important to be careful of any claim that the mixer is completely secure or anonymous and at worst is blacklisted by exchanges and other service providers.

This is we have an option to use decentralized exchange and cash out without bank, but it's hard since you need to find someone who's willing to trade with you.

I do understand the whole concept of mixers and I have always wondered why that. If there is nothing to hide, why will I go through the risk of losing my Bitcoin if I might not get them back? Coming back to your statement, you do understand that has been the problem with Bitcoin transactions or Crypto in general, how many places can we spend crypto for now or how easy can you find someone that you can trade in exchange for goods/services? even after using the DEX, you still need the bank at least for now may be it might change in the future.

The point is, looking at the standards that people set here, I realize that the risk or benefit depends on how we do it.
There are many different use cases here, and it's not made to serve any particular purpose, some really useful and some shady.
I have heard about the ChipMixer crypto mixer crash, but I only see one-sided information that is alleging money laundering, I don't deny it but looking at the way they charged the whole thing made me laugh.

KaliLinux

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Quote from: Apocollapse on March 24, 2023, 01:45:54 AM

Quote from: woez on March 22, 2023, 03:16:11 PM

Mixers or tumblers are services that allow users to mix their Bitcoin transactions with those of other users to obscure the source and destination of funds. While mixers can be useful for maintaining privacy, there are also some potential dangers associated with using them. There are several services that claim to offer this level of security, but it is important to be careful of any claim that the mixer is completely secure or anonymous and at worst is blacklisted by exchanges and other service providers.

This is we have an option to use decentralized exchange and cash out without bank, but it's hard since you need to find someone who's willing to trade with you.

I do understand the whole concept of mixers and I have always wondered why that. If there is nothing to hide, why will I go through the risk of losing my Bitcoin if I might not get them back? Coming back to your statement, you do understand that has been the problem with Bitcoin transactions or Crypto in general, how many places can we spend crypto for now or how easy can you find someone that you can trade in exchange for goods/services? even after using the DEX, you still need the bank at least for now may be it might change in the future.

Apocollapse

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Quote from: woez on March 22, 2023, 03:16:11 PM

Mixers or tumblers are services that allow users to mix their Bitcoin transactions with those of other users to obscure the source and destination of funds. While mixers can be useful for maintaining privacy, there are also some potential dangers associated with using them. There are several services that claim to offer this level of security, but it is important to be careful of any claim that the mixer is completely secure or anonymous and at worst is blacklisted by exchanges and other service providers.

Any person who have use mixer or tumbler know if centralized exchange, bank, and government are blacklist mixing usage because it can be used to money laundering. This is we have an option to use decentralized exchange and cash out without bank, but it's hard since you need to find someone who's willing to trade with you. Mixing isn't make your transaction secure, but it just to increase your privacy into 100% anonymity.

Abiky

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Quote from: Ferib on March 19, 2023, 08:18:27 AM

Hi folks, I was looking around into Mixers/Tumblers the other day and stumbled upon some very good research like the zk-SNARKs and TumbleBit. Two technologies that 'obfuscate' transactions, making blockchain analysis a guess fest.

My interest in the mixer is in Bitcoin forks and nothing fancy like Ethereum (which has zero-trust mixers based on zk-SNARKs like Tornado cash AFAIK) but when looking into existing online mixers they all appear to be 'send me coins and I promise I will send them back' kind of vibe.

Aren't there any zero-trust mixers for Bitcoin or Bitcoin forks? or have I been looking in the wrong direction?

Also, could multi-sig transactions with two or more participants (using a pre-defined amount of assets, ideally inputs are dividable by each other, eg, a multitude of 0.001) be used to obscure transaction histories?

The only "zero trust" mixers I know of are those built into the Wasabi and Samourai wallets (in the case of Bitcoin). There was something called "Tumblebit", but it seems development stopped for a while ago (also a Bitcoin mixer). For ETH, there's a "Zero-Knowledge" mixer called Tornado.Cash but it got sanctioned by the US. Some developers forked Tornado.Cash and made a new mixer called "Privacy Pools", but I'm yet to see how long will it last.

I guess the risk of using a mixer is being "flagged" by the government as they believe you're doing something suspicious such as money laundering or tax evasion. With governments hunting down mixers lately, I'd steer clear from them just to avoid bringing unwanted attention. Hopefully, privacy will survive as defenders oppose governments' actions in the long run. Who knows if they'll give up in their efforts to eliminate privacy in crypto for good? Just my thoughts Grin

wxa7115

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Quote from: DeathAngel on March 22, 2023, 11:31:56 AM

There are lots of risks involved with using mixers/tumblers. Firstly I just hope that you’re using them for privacy & not for crime or some other kind of illicit activity.

There are many risks as I said, some are that you might end up receiving dirty coins that have been used in crime, then when you deposit them to an exchange to sell they get confiscated/seized.

Another risk is like with the well known mixer Chipmixer, it gets seized just as you are mixing coins. You could lose your money. Basically unless you are very serious about privacy I advise you not to use them.

Another risk is that by using a mixer for privacy purposes you end up sending your coins to a website that is a trap created by governments, so not only you get no additional privacy at all but now you are on their list as a suspicious person for using those services.

And if at some point your identity is linked to those coins then you could receive a visit by the security agency of your country and you will have to give a lot of explanations about what you are doing online.

woez

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Mixers or tumblers are services that allow users to mix their Bitcoin transactions with those of other users to obscure the source and destination of funds. While mixers can be useful for maintaining privacy, there are also some potential dangers associated with using them. There are several services that claim to offer this level of security, but it is important to be careful of any claim that the mixer is completely secure or anonymous and at worst is blacklisted by exchanges and other service providers.

jrrsparkles

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Quote from: Ferib on March 19, 2023, 08:18:27 AM

Hi folks, I was looking around into Mixers/Tumblers the other day and stumbled upon some very good research like the zk-SNARKs and TumbleBit. Two technologies that 'obfuscate' transactions, making blockchain analysis a guess fest.

My interest in the mixer is in Bitcoin forks and nothing fancy like Ethereum (which has zero-trust mixers based on zk-SNARKs like Tornado cash AFAIK) but when looking into existing online mixers they all appear to be 'send me coins and I promise I will send them back' kind of vibe.

Aren't there any zero-trust mixers for Bitcoin or Bitcoin forks? or have I been looking in the wrong direction?

Also, could multi-sig transactions with two or more participants (using a pre-defined amount of assets, ideally inputs are dividable by each other, eg, a multitude of 0.001) be used to obscure transaction histories?

The purpose of mixers is to eliminate the existing traces that linked with bitcoins in many different ways, well its not 100% privacy but increased privacy like something is better than nothing. Recently one of the biggest bitcoin mixture were seized and the reputation of altcoin mixing services are that familiar so the best possible way to to mix couns by trading it for other cryptocurrency and convert it back if you want on platforms where KYC is not mandatory.

livingfree

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With the recent news about Chipmixer, there will be some doubts of using them because you'll never know if the next mixer that you'll use is gonna be freezed and seized by the government.

There are some competitors that have existed and you can try them and they're running signature campaigns, I think they're 3 of them.

Apart from that, you can use some anonymous coins like Monero if you're really for the privacy.

Topic: What are the dangers of mixer/tumblers (Read 284 times)