A Bitcoin tumbler is a service that mixes your crypto assets with those of other users in a pool, and then sends the fresh coins to their destinations. This makes it difficult for hackers and law enforcement to trace your crypto transactions. It also prevents your exchanges from associating your cryptocurrency with illegal activities.
However, despite their many advantages, tumblers are controversial. Some governments and financial watchdogs frown upon them, because they can be used for money laundering. Additionally, some exchanges and wallet providers refuse to accept bitcoins that have been mixed using a tumbler.
In a tumbler, Alice sends her bitcoin to a unique address that the mixer generates for her. This address is not linked to her original bitcoin, so it’s impossible to trace the source of the coins. The mixer then mixes Alice’s bitcoin with other bitcoins to create a pool of mixed assets. It then sends the pool’s bitcoin to Bob’s address. Bob now has 1 BTC in his address, but he doesn’t know that it originated from Alice or anyone else.
The tumbler’s fee for this service is typically between 0.29% and 3.00% of the mixed assets. This fee is much smaller than the fees charged by most exchanges.