Tornado Cash — what the heck is that?
Crypto mixing service Tornado Cash blacklisted by Treasury Department for alleged use in laundering.
TL;DR
Tornado Cash is a decentralized protocol allowing users to anonymously transfer coins and tokens between wallets, while maintaining full control over them (non-custodian).
Quick introduction.
It won’t be deep dive into Tornado Cash’ under the hood technology like merkle trees, ZK-snark and zero-knowledge proof.
My goal is to give basic knowledge about this protocol to average person, even to non-cryptoheads.
Chains and tokens Tornado Cash is operating with:
To achieve privacy, Tornado.Cash uses smart contracts that accept token deposits from one address and enable their withdrawal from a different address. Those smart contracts work as pools that mix all deposited assets.
Once the funds are withdrawn by a complete new address from those pools, the on-chain link between the source & the destination is broken. The withdrawn crypto-assets are therefore anonymized.
When a user puts funds into a pool (a.k.a. the deposit), a private note is generated. This private note works as a private key for the user to access those funds later. To withdraw them, the same user can use a different address — an old or a new one — and recover his/her funds thanks to this private key.
Tornado.Cash uses Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (also called zk-SNARK) to verify & allow transactions.
Zero-Knowledge-Proof allows users to demonstrate possession of information without needing to reveal it, this way withdrawal wallet stays anonymous.
With this knowledge you can make your own opinion if Tornado Cash ban in USA was a correct decision.
Thanks for your attention. If you think I can improve something in my texts or want me to explain topics further, leave a command.
Also check out my new twitter account and my previous article about solidity based war game, Ethernaut:
