Creating a Mixer
Last updated
Last updated
These are questions that not only the end user but also every developer planning to launch a Bitcoin mixer should ask themselves. If everything goes smoothly on each point, such a mixer will definitely bite off a significant share of this market.
The most important piece of the setup is the Letter of Guarantee. This is a file with a PGP signature, and contains proof that you started a mix. You download this letter when you begin each session, and it allows you to get your coins out if the mixing process messes up. In order to make the process work, bitcoin mixers put a public key on their website. They also made a private key for PGP and keep it. Most mixers keep the private key on the server so that they can automatically generate letters. But this approach allows law enforcement to compromise the whole mixer, if they seize the server.
At the moment, only one company provides a turnkey solution for deploying a Mixer. Jambler was launched in 2018, as a platform to bring mixers and coin suppliers such as miners and exchanges together. Its not a mixer itself, but it makes it easy for anyone to start their own mixer.
When a bitcoin miner mines a block, it contains a coinbase transaction with some BTC inside it. This is what they call “clean” bitcoins, with no transaction history. Jambler sources coins from bitcoin miners/exchanges and resells them to mixers.
Exchange withdrawals are perhaps sought even more than mined blocks, because they are easier to find than blocks. After all, miners mine a block every 10 minutes on average. The exchanges process hundreds of withdrawals during that time period. These coins go through a scoring system to make sure that they aren’t dirty. And if they are good, Jambler sends them to the mixers.
Remarkably, Jambler is still standing today, when almost all mixers from that time period have failed. A lot of mixers would piggyback on Jambler in the coming years.
