If blockchain analysis firm Chainalysis is right, only a small fraction of coins sent to and from bitcoin mixers are used for illicit purposes.
In a recent webinar titled “Cryptocurrency Typologies: What You Should Know About Who’s Who on the Blockchains,” the blockchain analytics firm suggested that users of mixing services mostly leverage the option for privacy reasons. Many darknet users, in contrast, send their coins directly from exchanges.
That said, while they come from a small minority of all users of mixing services, a large fraction of stolen coins do end up being mixed.
“A lot of people are using mixers just for personal privacy,” explained Hannah Curtis, senior product manager of data at Chainalysis, during the webinar. “But we do know that a lot of illicit funds do end up at mixers.”
Bitcoin Mixing
The Chainalysis webinar presented a broad overview of blockchain use cases, which included blockchain analysis of mixers and darknet markets, but also mining pools, ICOs, hosted wallets, ransomware and more. One of the perhaps more surprising conclusions is that Bitcoin mixers — both centralized and “decentralized” versions — appear to be used much more often for privacy purposes than for illicit activity.
Specifically, Chainalysis believes that 8.1 percent of all mixed coins were stolen, while only 2.7 percent of coins had been used on darknet markets. As such, less than one in every 11 coins sent to mixers could be identified as having been used for illicit purposes. Additionally, 1.9 percent of mixed coins came from gambling or betting sites, which could be illegal depending on the jurisdiction of the users and the sites.
In contrast, almost half of all mixed coins were sent from exchanges.
