Does Using a Monero Mixer Improve Privacy? (2020)
Many people want to maximize their privacy, particularly when using a privacy-focused coin such as Monero. But does using a Monero Mixer or Tumbler improve your privacy/security? What about Monero Churning?
To give you a quick answer — in almost all circumstances you do not want to use a Monero Mixer or Tumbler, as they do not provide extra security when using Monero as Monero does such things automatically and the risks they carry lead to no net-benefit over no mixing/tumbling. Monero Churning however, it can be useful — even essential for some Monero users.
What Do These Different Terms Mean?
Monero Churning and Tumbling means the same thing — more or less it means transferring your coins to a third party’s Monero Address that pools the coins you transfer with the other coins others send to them, then sends you back Monero shortly after recieving your Monero, effectively — at a surface level — laundering your Monero.
Monero Churning is essentially being your own Monero Tumbler, as due to Monero having a naturally tumbling mechanism and private transferring protocol you can simply set up an intermediary Monero address you send to before completing a transaction, effectively laundering your monero.
Why Should You Launder Your Monero?
If you do not launder your Monero if you complete a transaction with a compromised third party your identity could be uncovered.
This is due to the in-bound monero exchange (fiat on-ramp in particular) having your identity due to KYC regulations or general bank details required to first get your money in the crypto ecosystem.
If you transfer Monero to a compromised entity, for example someone selling something illegal, they could then see the input/outputs related to the address you sent the funds from.
This all gets extremely technical (if you want the technicals look up EAE Monero attack), but to put it simply and non-technical: The only vulnerability in Monero’s privacy is caused by not laundering your monero. Launder it.
Why You Should Launder Via Churning Instead of Tumbling/Mixing
We’d STRONGLY recommend avoiding all Monero Mixers or Tumblers. If they are compromised they do no benefit to you, and there’s no way to know if they’re compromised. All you have to do is create a second or third monero wallet and send your funds to it, then to the address you’d like to pay, and it does the same effect as Tumbling/Mixing your Monero.
Essentially have 2 wallets and follow this transaction flow to ensure security:
Fiat Onramp or Exchange -> Wallet 1 -> Wallet 2 -> Payment Address
If you are the Payment Reciever, Reverse it. (Payment Recieved -> Wallet 2 -> Wallet 1 -> Fiat offramp or Exchange).
Do not use a Mixer/Tumbler Because if they’re a non-trustworthy party they can trace the inputs/outputs — making them entirely pointless and no more secure than using Monero normally.
Should You Actually Bother Churning Your Monero?
If you aren’t buying something illegal or questionable with your Monero then we’d say it’s unnecessary — and for most people we’d say it’s not worth the bother of having two addresses and filtering all your monero through them. But it’s certainly not harmful, it’ll only cost you a bit in transaction fees and a bit of time.
At the same time, if you’re buying something illegal or questionable it’s an absolute must — and we’d actually recommend having multiple addresses to increase the obfuscation and ensure 100% deniability. An example being Exchange -> Wallet 1 -> Wallet 2 -> Wallet 3 -> Wallet 4 -> Wallet 2 -> Wallet 5 -> Wallet 4 -> Wallet 2 -> Payment Reciever.
It’d cost more in transaction fees, and time/hassle, but if you’re doing something shady you shouldn’t cut corners. Cutting corners could literally cost you your life, and could easily cost you your freedom. Don’t be lazy — make the amounts per transaction different and send them at different time periods (first transaction 2 hours after recieving, second a day later, third two minutes later).