Bitcoin laundering, also known as Bitcoin tumbling or Bitcoin mixing, is the process of concealing the origin of bitcoins by mixing them with other bitcoins. This is done to make it difficult for law enforcement agencies to trace the origin of the bitcoins and link them to criminal activities. Bitcoin laundering is a growing concern as more and more people are investing in cryptocurrencies and using them for illegal activities.
Bitcoin is a digital currency that operates on a decentralized network called the blockchain. The blockchain is a public ledger that records all bitcoin transactions. Each transaction is verified by a network of computers and added to the blockchain. Bitcoin transactions are pseudonymous, meaning that they are not directly linked to the identity of the user. However, the blockchain records the address of the sender and the recipient, which can be used to track the movement of bitcoins.
Bitcoin laundering works by mixing bitcoins from different sources to make it difficult to trace the origin of the bitcoins. This is done by using a Bitcoin mixer or a Bitcoin tumbler. A Bitcoin mixer is a service that takes bitcoins from multiple users and mixes them together. The mixer then sends the same amount of bitcoins back to the users, but from different addresses. This process makes it difficult to trace the origin of the bitcoins.
The process of Bitcoin laundering starts with the user sending their bitcoins to the mixer’s address. The mixer then separates the bitcoins into smaller amounts and sends them to different addresses, making it difficult to trace the origin of the bitcoins. Once the bitcoins have been mixed, the mixer sends the bitcoins back to the user’s wallet.