A coin mixer, most popularly known as Bitcoin mixer, is a service which scrambles your cryptocurrency transactions so that the funds' origin becomes hard to trace. (Some also call these services Bitcoin tumblers.)
Mixers accomplish the mixing task using several methods, most of which are kept under wraps, but it usually involves gathering thousands of transactions together and doing some compensation between their inputs such that everyone gets their outputs (minus a fee) in the end. Since everyone's inputs got mixed together, there's no way to trace the transactions back deterministically (well, technically there is, but it'd only justify the effort if there was a very serious reason to tracer those funds back).
Cryptocurrency mixing can be seen as a controversial practice by some, because it's similar to what most money laundering operations do using fiat money.
Although in the world of crypto, mixing does not always have illegal motivations. Lots of crypto enthusiasts hold the belief that privacy is a right even though you have nothing to hide. As such, they may employ something like a Bitcoin blender even though they have nothing to hide. This makes it even more complicated for authorities, since finding illegal use may force them to go through thousands of legitimate transactions.
Since crypto transactions can be easily traced, users may want to legitimately protect their privacy from criminals by not revealing their main wallet.
CoinMixer is a mixing service that provides high volume Bitcoin mixing against a 0.5 to 1% fee.
We are not at all affiliated with this service. Link is provided for information purposes only.
Wasabi Wallet is a very popular privacy-focused Bitcoin wallet, which implements CoinJoin. It has several layers of security built into it, including network traffic obfuscation, anti wallet fingerprinting countermeasures, customized change address generation and several other features.
Visit Wasabi Wallet's official website for more information.
Bitcoin Blender is an underground Bitcoin mixing service which claims to remove the link between your ID and the coins held in some address.
Bitcoin Blender was announced on Bitcointalk in January 2014. At present time, Bitcointalk displays the following notice to all Bitcoin Blender thread visitors:
Warning: One or more bitcointalk.org users have reported that they strongly believe that the creator of this topic is a scammer. (Login to see the detailed trust ratings.) While the bitcointalk.org administration does not verify such claims, you should proceed with extreme caution.
(We recommend caution when using any Bitcoin blending service, not just Blender specifically.)
See our main article on tumblers (coin mixers) for details.
Bitcointalk Mixer Scam Discussion
[ANN] Bitcoin Blender, anonymous bitcoin mixer
Bitcoin Blender cryptocurrency mixer Official Website
How Cryptocurrency Mixers and Anonymous Wallets Work
Cryptocurrency Mixers and Why Governments May Want to Shut Them Down
Bitcoin Magazine: What Are Bitcoin Mixers?
Coursera course: Bitcoin and Cryptocurrency Technologies [Princeton University Course]