The idea that any cryptocurrency transaction is private by default is a common misconception. In fact, the opposite is the case. Blockchain data is public and transactions can be tracked. Cryptocurrency mixers and privacy coins were created to bring privacy to this open financial system.
The blockchain provides us with a record of the source and destination addresses of each transaction. This record has been used by law enforcement to track and identify criminals, and by cryptocurrency exchanges to analyze customer funds for links to crimes. Some coin manufacturers have dedicated themselves to dusting, whereby they distribute small amounts of contaminated bitcoins to thousands of addresses. This is because many of these services work in the same way as a mixer: it gathers funds and returns different bitcoins to those deposited.
At the same time, Bitcoin is incredibly popular and old habits are slow to disappear, so centralized mixers may not lose their position. While this was not the first cryptocurrency mixer to be attacked by the United States government, the difference is that, unlike the Bitcoin Fog case, Tornado Cash is not centrally managed. However, this capability has turned bitcoin transaction mixers into hotbeds of money laundering activities. Mixers can be implemented in several ways, but the basic principle is for several people to come together and pool their bitcoins.
Simply enter the bitcoin address you want the mixed currencies to be sent to, and then deposit your bitcoins to the address provided. These bitcoins are likely to come from a different source (or sources) than those that brought to the mixer. The CoinJoin protocol allows a group of users to group together a quantity of bitcoins and then redistribute it so that they all recover the same amount of bitcoins. The ability to hide where funds come from has turned bitcoin mixers into a hotbed of money laundering activities.
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