Coin mixing services exacerbate Bitcoin’s PR problem

Many people are attracted to Bitcoin and virtual currencies because they think they can transfer funds anonymously. However, as a transparent ledger, blockchain is not actually anonymous, and users who want to be anonymous need to actively use currency mixing services. Will the existence of these services damage the public image of Bitcoin? Or are they beneficial to the ecosystem?

Bitcoin Mixing Anonymous Services: Will Bring More PR Problems

The transparency of Bitcoin and other virtual currencies is something that some companies are more willing to accept. Accounting work will become much easier, and it is difficult to hide any illegal activities on the blockchain. In addition, Bitcoin also has a certain degree of pseudo-anonymity: all Bitcoin users are identified by a wallet address, so it does not publicly disclose any personal information.

Despite all these positive features, Bitcoin still has a public relations (PR) problem, as most people view the virtual currency as a safe haven for money laundering, fraud, and illegal transactions. This line of thinking is strange, as Bitcoin itself is not anonymous and can be one of the worst options for money laundering.

All of this has forced a group of cryptocurrency enthusiasts to seek a more anonymous solution. For them, shielding their identity through a wallet address is obviously not enough, because anyone can use the blockchain to trace transactions.

Until someone came up with a way to anonymize Bitcoin transactions, which led to the birth of Bitcoin mixing services. One of the main goals of mixing services is to create a new deposit address for customers that can confuse input and output transactions, and they can use it to send any amount of Bitcoin.

Bitcoin mixing services scramble transactions by splitting the incoming funds into multiple portions of random amounts, sending each portion to a new Bitcoin address. Once this step is completed, the new addresses repeat the process again until all the funds provided by the customer have been sent to the intended recipient's address.

While it is possible to track all of these transactions on the Bitcoin blockchain, it would take a long time to determine the original spending address. Blockchain obfuscation sounds like a harmless service, but it could have a serious negative impact on Bitcoin's public image.

The worst part about Bitcoin mixing and anonymity services is that the platforms that provide these services are centralized, yet people continue to flock to these centralized services. Even technically, these services do not bring any real benefits to the Bitcoin community.

Who is using coin mixing services?

There is nothing inherently wrong with Bitcoin mixing services. It is fine to send funds from one address to another by using an intermediary step for legitimate reasons. In addition, it provides an extra layer of protection for personal data, which is also a service option that many people are looking for.

That being said, Bitcoin mixing services are often used to launder stolen Bitcoin funds. The public sees Bitcoin mixing services as a centralized service that facilitates money laundering of virtual currencies, so they believe that the only use of Bitcoin is for money laundering and drug trafficking.

Bitcoin’s PR problem is already very bad, and mixing services will exacerbate this problem and bring more scrutiny to Bitcoin and virtual currencies.

ps. Trading Bitcoin for other virtual currencies and then back to Bitcoin is legal, and it can also clear the traces of the source of funds. Unfortunately, most trading platforms are also centralized.

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