In the cryptocurrency industry, a lot of services have come and gone. Fortunately, bitcoin mixers have become more recognizable and have taken deep root in the crypto world. With advanced technologies being developed to make bitcoin transactions visible, it is wise to use a mixer to keep your identity hidden.
They are ideal for privacy and security enhancement. It is believed that hackers and cybercriminals mostly prefer mixers to remain incognito while transacting. However, most bitcoin users only wish to conceal their identity and use bitcoin confidentially without limitations. Today, we look at what role mixers will play in the future of cryptocurrency.
What is the Future of Cryptocurrency?
We first need to understand the future of cryptocurrency before we get to the role mixers will play in this future. Today, there are over 9,000 types of cryptocurrencies circulating about the global digital infrastructure.
These currencies can be used to purchase goods and services via an online ledger with heavy cryptography to enhance the security of online transactions. Bitcoin was intended to be a decentralized and anonymous currency. However, bitcoin transactions are not entirely secret and this is where mixers come in.
The expected future of cryptocurrencies primarily circulated:
• Mass adoption - Involves the use and acknowledgment of cryptocurrencies as the common and regular form of payment by the public on a large scale. Crypto is already vastly popular. According to research by Statista in 2020, there were about 63 million crypto wallet holders around the world
• Imposing regulations – There is a considerable need to develop a regulatory framework applicable to all cryptocurrencies. While there are some regulations such as taxation, sales regulation, securities laws, and money laundering requirements, there is still a lot of regulations that are yet to be defined
• A highly volatile market - When it was first introduced, bitcoin was valued at less than $1. It is presently worth over $63,000. This surge in prices depends on forces of demand and supply. Adding to the fluctuations in the crypto market are FCA and SEC decisions, which may unintentionally result in uncertainty in the market and thus traders making choices based on emotion
• Dissolution of Power – Bitcoin is decentralized; thus, no single entity or person controls the data. This prevents corruption of the system and maintains the integrity of the ledger
In a world where the economy and politics are closely interdependent, money is a political tool. The ability to access personal funds at any given time gives one the chance to express their opinions and convictions without fear.
Bitcoin was designed to give users the chance to move away from financial censorship and prying the states' eyes, such as freezing accounts or seizing funds. Authorities can track your crypto transactions on the blockchain and go after your wallet's funds, which is where mixers come in. They provide privacy while donating funds to the cause or transacting.
Protection of Private Funds
Our resources are vital to us, even though we have nothing to hide. Providing people with an insight into our private finances could have negative consequences. Fortunately, bitcoin mixers help prevent this by ensuring all transactions are entirely private by eliminating any connection between our private wallets and transactions.
Whenever you transact with a party, they acquire information about your wallet. They can use this address to find out the amount of bitcoin you have and track your other transactions. By examining your outputs and inputs, they can speculate on what other addresses you own, providing more data about old transactions.
Bitcoin mixing removes the obvious connection among your addresses through multiple transactions that are made during the mixing process. However, these mixers do not exclude the ability to authenticate transactions. Recipients are still able to verify transactions between you and them, but they cannot compile information.
Bitcoin Mixers also referred to as tumblers can be comparable to using bank accounts in offshore jurisdictions for laundering 'dirty money. Launderers rely on bank secrecy laws in these countries to ensure that their source of funds cannot be disclosed. Similarly, bitcoin mixers rely on such services not to disclose the source of each bitcoin transaction.
In the end, Bitcoin seeks to achieve anonymity on the blockchain. Despite their association with illegal behavior, they are innocent reasons to use a mixer. Nevertheless, mixers can be a factor used to assess the risks linked with a particular client or transaction and can justify further analysis into the source of finances.
Influence on Mass Adoption
While not the only contributing factor, crypto mixing is believed to contribute to enhanced privacy and increased mass adoption of cryptocurrency as a transaction method. Preferences to remain anonymous can be associated with ideological views. Users require being able to feel confident in the security of their funds and private information.
The other essential pillars for mass adoption of bitcoin are:
- Ease of use and user- Transactions and general access to the cryptocurrency is fairly simple for bitcoin
- Price stability – The current volatility of bitcoin is very risky for users to keep their funds in cryptocurrency. This, therefore, undermines the purpose of cryptocurrency as a store of value
- Governance – The existing bitcoin foundation challenges aspects of cryptocurrencies ideologically, by being transparent and centralized
It would be prudent to expect that bitcoin's mass adoption will be driven by both its possible function as a partial substitute for traditional financial institutions and currencies. In what follows, this is considered what drives mass adoption of infrastructure for the demand and supply of bitcoins.
Given all the scrutiny Bitcoin tumblers are under in the present day, it may seem plausible to assume that anyone moving coins through such services may have their transactions flagged either sooner or later. However, they are still a popular option among bitcoin users who have seen substantial growth despite inquiry.
Based on the above and present rate of advancement in technology and businesses, individuals are adopting more and more cryptocurrencies and bitcoin mixers. This means that we could see mixers, such as bitcoinmix.org, Samourai Whirlpool or Wasabi, and cryptos in the mainstream adoption within the next five or ten years.