Why Mixing and Fungibility Go Together
By Smartmix / 16.04.2020 01:04 h

The concept of fungibility is fundamental to any functioning currency. It's the idea that any unit of that currency could be excahnged for any other unit of equal value. For example, if you lend your friend $5 they don't have to pay you back the exact same $5 bill you gave them, rather any combination of bills or coins equalling $5 would settle the debt. Conversely, if you lend your friend your car, it would not be acceptable for them to return a different car to you.

In the same way, the market price for bitcoin should reflect the price for all bitcoin-- or at least it should. However, blockchain analysis firms increasingly create situations where there may be motivation to pay a premium for "clean" bitcoin, or exchanges may freeze accounts associated with "dirty"  or "tainted" bitcoin, whether or not the holder of the account had anything to do with the bitcoin's past activity. There is a growing concern that the basic functioning of bitcoin as a currency could fall apart if some bitcoins are treated differently than others, of if bitcoin holders cannot reliably access the services of exchanges because the coins they have once circulated on the darknet.

Realistically there are only two ways for so-called tainted coins to become clean again, and one of them is for them to be seized by the government and resold at auction. Assuming that this is undesireable for the average user, the other way to ensure that your coins are usable and safe is to break the connection between that coin's past and future activity with a bitcoin mixer like SmartMix. When you send us your coins, we send you the same amount with different bitcoin to the address of your choice, making it next to impossible to decifer the origin of the coins or their past activity. SmartMix gives you a fresh start on the blockchain. While some may say that mixers are only necessary for those conducting shady activity, we hold that protecting your personal privacy should not be taken as evidence of illicit activity, and that there are plenty of legitimate reasons to use bitcoin privately.

This is ultimately a precarious balance between law enforcement and personal privacy and freedom. When our financial privacy is compromised, our individual rights are are at stake. If Bitcoin's founding proposition of freedom is to be achieved, we must all take steps to maintain its fungibility. Privacy and data security are not suspicious, they are responsible actions to protect you individually and the Bitcoin system as a whole.