We can all think of cryptocurrency mixers as centralized “middlemen” within a rather chaotic decentralized environment.
Bitcoin mixing employs a mechanism of engaging third party actors to protect identities belonging to the senders and receivers of cryptocurrency. As it stands, Bitcoin mixing or tumbling has become a welcome solution to users seeking reliable anonymity.
In the latest development, it has been reported that Whirlpool, the Samourai Wallet’s non-custodial crypto mixer, witnessed a month of record activity in March – with the mixing service realizing an excess of $10 million worth of Bitcoin (BTC) in processed transactions.
Whirlpool’s Month of Record Activity
According to data tweeted by Whirlpoolstats’ Matt Odell, the volume of data generated by the Bitcoin mixer last month made up 40 percent of the previous aggregate volume achieved by Whirlpool since its launch in Mid last year.
Statistics show that the firm has been registering an upward trend in usage volume so far in 2020 considering the fact that the end of 2019 was not very successful for Whirlpool as it recorded a decline in usage.
BTC Volume on Whirlpool since its launch in May 2019. Source: Matt Odell
In terms of actual numbers, the Bitcoin mixer achieved a volume of 303.55 BTC in October 2019. However, since the start of the New Year 2020, Samurai Wallet’s Whirlpool showed impressive results in the first quarter of the year by posting successive highs for the amount of Bitcoins mixed by the organization.
In January 2020, the facility processed 356.65 BTC while February saw the Bitcoin Mixer recording 529.05 BTC in terms of processed coins. In March, the figure tripled to an impressive 1,523.45 BTC.
Considering the current dynamic of user demand for Bitcoin anonymity, it is safe to predict that the numbers for April may rise further. In fact, bearing in mind that Whirlpool has handled 1,020.80 BTC in just 11 days, we can all agree that this month may present historical highs for the Bitcoin mixer.
The Whirlpool Target
During the launch of Whirlpool, the Bitcoin mixer spelled its target market to be mobile users. It prided in being the first mobile-based Bitcoin mixing service provider.
The Whirlpool service employs CoinJoin to clutter UTXO’s and eliminate any pathways of identification that would otherwise undermine a Bitcoin user’s anonymity.
According to Samourai, the mixing process takes place in 1,496 methods that incorporate additional mechanisms to function effectively. In a classic case, a user’s funds are grouped into pools of 0.01 BTC, 0.5 BTC and 0.05 BTC to actualize the crypto mixing process. In Whirlpools context, the 0.05 BTC and 0.5 BTC clusters have led the charts in terms of monthly Bitcoin processing volumes.
The dramatic increase in whirlpool volume comes in the wake of toughening regulations from governments aiming to comply Financial Action Task Force (FATF) guidelines and advanced anti-money laundering expectations on regulated centralized crypto exchanges.
The User Anonymity Question
Although Bitcoin’s anonymity has been a believable notion, it is important for users to note that such anonymity only exists within the precincts of individuality. Beyond this, in the context of wallet transactions tracking, vulnerabilities and potential external influences show up.
Quite obviously, transparency lists among the important features of blockchain systems. While this is a positive feature, cybercriminal factions may plug into the problem and wreak havoc to monetary transactions. Thus, an extra layer of protection is needed to protect users’ transactions from analytical targets on the blockchain – Crypto Mixing.
Otherwise, it is noteworthy that a decision to take up a mixing service comes with an important shortcoming as a time delay will be experienced between the time a user’s Bitcoin is sent to the mixer and the time the mixed crypto is conveyed back to the user’s wallet.