What Is a Tumbler?

Tumblers are responsible for breaking down transactions into smaller parts — and mixing them with others. This makes transactions harder for third parties to hunt down.

Users deposit their coins into the tumbler’s pool. The tumbler will return each user the same number of coins, minus the fees. However, the funds received will be made up of a multitude of parts of the funds that other users have deposited into the system. This helps to create a divide between the address sending crypto, and the one that is receiving it.

Tumblers usually do not ask for information about their users, ensuring anonymity. As a result, they are often accused of enabling illicit activities like money laundering, given that they make the anonymous applications of the Dark Web much more convenient and the jobs of law enforcement agencies more difficult.

However, tumbling cryptocurrency does not always carry suspicious motives. Users who resort to mixing should bear in mind that tumblers’ manipulations carry a few dangers, notably the risk of hacking. In case of security holes, it would be easy for hackers to recover personal data or trace the origin of a user’s coins.

Crypto Mixers vs Crypto Tumblers

Crypto mixer is another term for crypto tumblers. These are software companies that serve as a middleman between parties looking to send and receive cryptocurrencies. For example, Person A is looking to send Person B one Bitcoin (BTC); however, they do not want this transaction to be traceable. Person A would turn to the services of a coin mixer company. They will send the amount of Bitcoin to the coin mixer. The coin mixer will then combine this transaction with numerous other transactions, accumulating a larger amount of the same cryptocurrency and then redistributing it to the selected receiving addresses.

However, an important note here is that crypto mixers charge a fee for their mixing services. This essentially means that when sending cryptocurrency to a coin mixer, you need to consider the service fees, which will be deducted before funds are redistributed to their intended receiving addresses. It is important to take into account that most coin mixers charge a percentage-based fee. Consequently, the larger the amount of cryptocurrency you put into the mixer, the more you will have to pay in fees. 

Coin mixers have become an essential service in the cryptocurrency industry, as many people are looking to keep their anonymity.