Bitcoin was conceived as a pseudonymous system—all transactions are public, but participants’ identities are hidden behind addresses. Modern analytics, however, can readily link them to real people.
The team behind the Bitcoin mixer Mixer.Money analysed the up-to-date methods for anonymising transactions in 2025. We examine which technologies protect user privacy and how effective they are.
CoinJoin and PayJoin
CoinJoin is a technique to enhance anonymity by combining transactions from several users. Participants send bitcoins into a common pool and receive equal amounts back to new addresses.
The concept was proposed in 2013 by Bitcoin developer Gregory Maxwell. In subsequent years, multiple implementations emerged, such as WabiSabi by Wasabi Wallet and Whirlpool by Samourai Wallet.
Example: Alice and four others want more confidentiality. They gather their UTXO of 0.1 BTC each. A joint transaction sends the funds and returns 0.099 BTC to new addresses (after fees). On-chain, there are five inputs and five equal outputs. Tracing which output belongs to Alice is nearly impossible.
PayJoin (or Pay-to-Endpoint, P2EP) is a variant of CoinJoin in which the sender and recipient jointly construct a transaction: the latter adds their own input to break the heuristic that “all inputs in a transaction belong to one user” (common input ownership heuristic)—a mainstay of on-chain analytics.
“PayJoin is a protocol for cooperative transaction construction. The parties exchange information about UTXO over a P2P channel (for example, an onion service) and jointly create and sign the transaction using PSBT,” explain representatives of Mixer.Money.
The resulting transaction looks ordinary: multiple inputs, multiple outputs, with nothing outwardly marking it as the product of mixing.
Example: Alice wants to send Bob 0.05 BTC. Instead of a direct transfer, they use PayJoin.
- Alice notifies Bob which UTXO she is willing to use and drafts a transaction.
- Bob adds his own input (say, 0.02 BTC) and a change address.
- The parties exchange signatures within a PSBT and sign the joint transaction.
Bob then receives 0.05 BTC, and his change goes to a new address. From the outside it looks like a regular transaction; analysts cannot determine which input belonged to Alice and which to Bob.
“CoinJoin provides anonymity, but its patterns are visible on-chain. Analytics firms tag such UTXO as having passed through a mixer. Some exchanges refuse to accept coins after CoinJoin without additional checks,” comment Mixer.Money.
Only a handful of wallets have implemented PayJoin so far, and both sides need to support the protocol to use it. The technology has yet to gain mass adoption.
Lightning Network
The Lightning Network (LN) is often viewed as a privacy enhancement for Bitcoin because transactions occur off-chain and onion routing prevents intermediate nodes from seeing the full payment path.
However, opening a Lightning channel requires an on-chain funding transaction. Most public channels are announced via the gossip protocol, including the hash of that transaction and the specific output UTXO used for funding. Observers can therefore link on-chain Bitcoin addresses to particular Lightning nodes, which partly erodes privacy.
Intermediate nodes see the IP addresses of their neighbours and the amount relayed, but not the entire route. If an adversary controls several nodes along the path, they may correlate timing and amounts to infer sender or recipient.
The main weakness is that by 2025 most users favour mobile LN wallets with relays (Lightning Service Providers, LSPs) or custodial options such as Wallet of Satoshi. In such cases the provider sees most or even all payments, materially reducing privacy.
In December 2021, Chainalysis announced support for the Lightning Network and added LN-transaction analysis to its stack.
Silent Payments
Silent Payments (BIP-352) are one of Bitcoin’s latest developments. The concept was put forward by developer Ruben Somsen in 2022 and was formalised as a BIP in March 2023.
The mechanism solves address reuse: to preserve privacy, a new address is typically needed each time, which is inconvenient. Silent Payments let users employ a single static address (starting with sp1) without sacrificing anonymity.
The recipient creates an sp1 address with two key sets—a scanning key and a spending key. Using that address and their own private key, the sender applies ECDH (Elliptic Curve Diffie–Hellman) to derive a unique hidden output.
On-chain it looks like a regular Taproot address; it is impossible to tell a silent payment took place. The recipient scans blocks with the scanning key to find outputs intended for them.
“BIP-352 significantly improves the user experience, but its future depends on support from app developers and major crypto exchanges. Without integration with popular services, mass adoption will not happen: Bitcoin mixers will remain the more universal and more comprehensible solution for anonymising transactions,” notes the Mixer.Money team.
Bitcoin mixers
A Bitcoin mixer is the earliest method of anonymising transactions. Services such as Bitcoin Fog emerged back in 2011 and worked by mixing users’ coins via a centralised pool.
Over time, the effectiveness of that approach declined. Modern blockchain-analytics methods allow links between inputs and outputs to be reconstructed, especially in mixers with repetitive transaction patterns.
In response, developers are seeking new ways to break on-chain ties. For example, Mixer.Money has implemented the bitcoin.mixer 2.0 algorithm: coins enter a premixer, are anonymised, split into random parts and sent by the platform to exchange wallets of investors. The user then receives coins from other exchanges and other investors to two previously specified addresses.
This approach avoids mixing funds. The client receives an equivalent amount (minus the fee) with a completely different history—effectively coins recently withdrawn from trading platforms.
The service offers three mixing modes:
- “Mixer” — basic privacy for a 1% fee and a two-hour wait. Coins are mixed with those of other clients. The use of a mixer may be noticeable under deep analysis;
- “Full anonymity” — the highest (offered by the service) level of protection for a 4–5% fee and up to a ten-hour wait. Exchange reserves are used, so the fact of using a mixer is completely hidden;
- “Exact payment” — sending funds directly to a third party via the mixer. Combines anonymisation with settlement. The seller receives payment within six hours “from an exchange” and cannot trace the origin of the money.
To anonymise coins via Mixer.Money, it suffices to:
- visit the website;
- choose a mode; specify return addresses;
- send bitcoins to the provided address.
The service requires no registration and issues a guarantee letter with a PGP signature for support enquiries. A free test is available: send 0.001 BTC and you receive it back without a fee.
Conclusions
In 2025, Bitcoin users have several tools to protect privacy. Each solves a different problem.
CoinJoin is suitable for breaking UTXO history but leaves traces on-chain. PayJoin camouflages payments but requires both sides to support it. The Lightning Network protects against broad surveillance but does not ensure full anonymity.
Silent Payments are a promising technology for static addresses, but they have yet to gain mass adoption. Mixers such as Mixer.Money remain the most universal tool for full anonymisation.
For best results, combine methods according to your goal and avoid co-mingling anonymised coins with those withdrawn from exchanges and swap services after KYC.