ChipMixer : Building a Better Bitcoin Mixer

One of the pillars of Bitcoin’s popularity is also one of its biggest misconceptions and that is anonymity. It is true that Bitcoin is more difficult to trace than other types of transactions but it is not truly anonymous. Because of this, bitcoin users are continuously searching for new and better ways to anonymize their transactions.

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Bitcoin Mixers and Tumblers

Traditional bitcoin mixers and tumblers combine your bitcoins along with many other people’s bitcoins and the mixer’s own reserves as well. Then they send the equivalent of your original deposit in someone else’s bitcoins to the BTC address you specify.

The problem with this method is that because all of the transactions are bitcoin transactions, they are all recorded on the blockchain and are therefore traceable. There is also an added risk that if the bitcoins you receive were used for something illegal, that can, in theory, be traced back to you as well.

What is ChipMixer?

ChipMixer is different than any other bitcoin mixer that has come before it. Instead of simply combining your bitcoins with those of other users, they have developed a chip-based system that ensures a much greater degree of privacy. Here’s how it works:

When a user deposits bitcoin they receive the equivalent in chips. Each chip has a pre-determined value that is backed by Bitcoin addresses that have already been set up and pre-funded by ChipMixer. There are chips worth .001 BTC, .002 BTC, .004 BTC, etc… all the way up to 4.096 BTC.

If you were to deposit 0.1 BTC, for example, you would receive three chips worth 0.064, 0.032, and 0.004 BTC respectively. Since those chips were already pre-funded before your deposit, there is no link between them and your deposit on the blockchain.

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About Cynthia Turcotte