so before we continue on too much further around cryptocurrency, it's important to understand the concepts of mixing and tumbling.
this was on the forefront of the dark web in the early days because it was a critical step into anonymizing your cryptocurrency transactions.
if you didn't tumble your coin, it could be easily found the links between sending your info from one wallet to another.
and normally when buying cryptocurrency, when you 1st buy it, it requires some sort of id, other authentication that could link back to you, especially like an ip address, anything like a driver's license, social security, if you're in the us, a passport or something like that.
nowadays, it's not so important to mix or tumble, especially when using monero, but it's important we understand what they are.
so exploring the idea of tumbling as a service, what happens is if you had a bitcoin and say you wanted to send it to somewhere, maybe like a marketplace on the dark web, you want to make sure you don't send it just straight to that marketplace.
because if that marketplace ever got compromised or taken over by authorities, that coin would be easily determined to be linked to you.
if you just send it from like a wallet, a coinbase to one of these markets, it's a clear link and it's a very dangerous thing to do.
so what you would do is instead of sending it straight to the marketplace, you would want to send it over something like a tumbling service.
so a tumbling service will essentially just act as a middleman.
you can say, hey, send it to the tumbling service and then your output wallet would be maybe the wallet of the marketplace you're sending to.
inside the tumbling service, what happens is a few different things.
instead of just taking your coin and just outputting it, what it does is takes a bunch of different coin in and it mixes it around.
let's say in this case, you want to send it from 234 wallet there to the 345. well, what it will do is take that 50 bitcoin you're sending, it'll save the output you want to send it to, but it'll send it to a different address.
and then it sends it over and then it does another transaction, a similar example, and then it does another one, and then back to you.
now, the way it does this is not in a straight line because this would still be traceable.
so the chart doesn't really show exactly what's happening on the inside.
but really what would happen is it might send your 50 bitcoin to someone else and it might send someone else's 50 bitcoin to you.
and then it would send that 50 bitcoin back to this address.
it would it would kind of mix it all up.
so that's the point of a tumbling service is it's making it a lot harder to track, not impossible to track, just much harder to track.
so when when did you want to use a service like this?
well, if you're using any coin other than monero, if you want that anonymity and privacy, you're going to want to use a mixer or a tumbler.
if you want to anonymize your transactions better, again, that's when you'd want to use it.
and if you're concerned with long- term association of using crypto, that's a reason to use a tumblr.
and what we mean by the long- term association, you never really know when you send coins somewhere, if that coin will later down the road be used for illegal means.
something people don't think about, but say you send ten bitcoin to someone and then the next transaction they do is to buy something illegal with that ten, you are now in that chain of purchasing history, which means extra scrutiny could come on you at some point because you purchased that coin and you sent it somewhere.
so in order to avoid that and keep our anonymity as high as possible, we like to use tumblers or mixers.
so the real question is, are these services actually legal?
and usually tumbling services are considered illegal.
they're deemed as a form of money laundering.
definitely need to check your local and state law to be sure that it is legal.
and like we said, when you are mixing and tumbling, the long- term association is still a risk, but the output of that tumbling could also be a risk because it can be linked to illicit transactions, meaning you were the 1st sender into that illicit or the 1st receiver out of an illicit transaction.
so definitely something to watch for.
but that's about it on mixing and tumbling.
in the next video, we'll talk about coin joins, a more legitimate way to do this.
if you have any questions, let me know.
otherwise, i'll see you in the next one.