Using a cryptocurrency exchange platform is a popular way to buy, sell, and trade bitcoins- but how do you keep them safe?
As a trader, keeping your crypto clean can be a massive undertaking, as well as expensive, if you’re not careful how you go about it. Keeping clean bitcoins is a massively important part of security, ensuring that no one can easily track where your coins are held, who’s holding them, or how many you have. This is simple practice can help safeguard against hacks, scams, and exploitation by analytic groups.
But when you’re constantly buying, selling, and trading, it’s easy to let your coins get a little sticky. Especially if you’re trying to use a new bitcoin tumbler and sparkly clean wallets each time you wind up with new coins. So what’s a day trader to do? We talked to experts Best Bitcoin Tumbler, so simply follow this guide.
The Exchange Conundrum
The problem with regularly transacting coins is three-fold:
- you generally need liquidity in your stash to be able to make quick and profitable trades.
- Because you’re constantly trading, it’s expensive and time consuming to tumble new coins every time you get them.
- Juggling multiple wallets can quickly put you in the danger zone of misplacing or messing up your coin quarantine.
These core issues, alongside a few other less problematic ones, are why it’s a bit of a nightmare for high volume traders to keep a clean purse. But, there are ways that you can use a bitcoin tumbler in conjunction with just three wallets and still be able to keep those bitcoins laundry fresh.
Why Bitcoin Tumblers?
Using a bitcoin tumbler is paramount to keeping the anonymity and fungibility of your coins. Anytime a bitcoin is transacted, a full history of that coin is stored within the blockchain. While this helps stop duplication, it also makes it fairly straightforward for blockchain analytics to sniff out not only your identity but also estimate your total holdings. Which could easily put you and your coin balance in jeopardy.
The best way around this is by using a bitcoin tumbler. Bitcoin tumblers take any coins, or fractional amounts of coins you deposit into them and mix them up amongst their coins that have been deposited for this exact purpose. Other coins are added to the mix, like freshly mined coins or storage coins owned by the tumbler itself. Making it ridiculously difficult to track anyone fraction of a coin.
The best bitcoin tumblers will offer perks for return users, guarantees of authenticity, high levels of user controls, and multiple output addresses. Luckily, competition on the market is fairly slim, so most of the good tumblers will offer a deal that will suit your needs and frequencies.
The Wallet Holy Trinity
Once your bitcoins have been tumbled, it’s time to stash them in a wallet, just make sure you’re not using the original one- in fact, you should have three of them.
- The Dirty Wallet
The dirty wallet is used for incoming coins. Whether these coins were bought, traded, or won, it’s important that any incoming coin goes into one “dirty” wallet. Before using any of those coins, you need to run each one through a bitcoin tumbler. This keeps your identity-aware from the original stash. It’s important to ditch a dirty wallet now and again and start-up fresh, as recurring wallet addresses are one way that analytical firms can trace your identity or purchase patterns.
- The Cold Wallet
The cold wallet, or hardware wallet, is one that is stored offline at all times. This wallet should never be used for anything but cold storage. No one but yourself and your most trusted allies (if that) should have this address. Absolutely no one but yourself should have the personal keys to it. This is where you put any cleaned coins that you’re not planning on using anytime soon. Some people prefer to use a disposable “intermediary” wallet between their bitcoin tumbler and cold wallet but to each their own.
- The Traceable Wallet
The traceable wallet is the one you use to deposit clean coins that you plan on using in the near term. These coins can be deposited from a bitcoin tumbler directly, or taken from your cold wallet. It’s important that if you use coins from your cold wallet to stock up the traceable wallet- you ditch that traceable wallet and get a new one once the transaction has finished. This makes it incredibly difficult to track spending habits and holdings back to your hardware wallet.
There are of course other wallet options that do your dirty work for you and obfuscate your wallet address each time you transact from it. These are generally not so cheap, and can be a bit buggy, but do work for someone who is wanting an anonymous wallet. Samurai wallet is one such invention.
However, the greater the degree of separation, the greater your bitcoin security, so in our opinion- use a bitcoin tumbler, use the holy trinity, and then enjoy your anonymity.