Cryptocurrency tumblers help to boost the privacy of your Bitcoin transactions by obfuscating your wallet address and the origin of the coins you send. They do this by mixing your coins with those of other users and then returning them to you in a new set of wallet addresses. While they are useful for protecting your privacy, it is important to understand that these services do not guarantee complete anonymity and are prone to failure. Just recently the popular Bitcoin mixer Bestmixer was shut down and people who had money on the site were left without their funds.
Tumblers are often accused of facilitating illicit activities like money laundering because they make anonymous dark web applications more convenient and law enforcement organizations’ jobs harder. However, this is mostly unfounded as cryptocurrency tumbling does not necessarily carry suspicious motives and can be used for legitimate purposes.
A cryptocurrency tumbler is a service that takes in Bitcoin and other coins from its users, mixes them up with clean, untampered with coins and then returns the resulting mixture to its customers in a new set of addresses. This obfuscation of transaction data and origins makes it much harder for blockchain analysis tools to trace the coins back to their original owners.
There are a number of Bitcoin tumblers available in the market and they range from centralized, custodial ones to decentralized, non-custodial alternatives. Some support other cryptocurrencies as well but others only handle Bitcoin. The most common type of tumbler is a custodial one that keeps a pool of Bitcoin and distributes it to its users in a random order. Other tumblers do not keep a pool but instead return coins to users in the form of multiple smaller batches, thus maintaining a high degree of privacy and obfuscation. Crypto Tumbler