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Tornado Cash is a smart contract system that allows you to send fixed denominations of Ethereum, and receive a cryptographic "note" that allows someone who know
by somebodythere 5y ago
Tornado Cash is a smart contract system that allows you to send fixed denominations of Ethereum, and receive a cryptographic "note" that allows someone who knows the note to withdraw the same amount of Ethereum from the smart contract.
Since zero-knowledge cryptography is used to ensure the generated note cannot be linked to the depositing transaction, it can be used to send money to yourself or another person without revealing the identity of the sender. There are criminal and non-criminal reasons to do this.
Because it is a smart contract system, you do not have to trust a person or organization with the money. You do have to trust the smart contracts defining the system are correct. The smart contracts are publicly available to read and have been reviewed by many people, including software audit organizations.
- SilasX 5y agoInteresting! I’m surprised the regulated exchanges don’t blacklist coins connected to that smartcontract because of the ease of facilitating laundering.
- pcthrowaway 5y agoSince all crypto on smart contract platforms tumbles around in defi and the various decentralized exchanges all the time, this would effectively prevent anyone from depositing their crypto to those exchanges, which would make the exchange unusable. To expand on that, say someone withdraws ETH from Tornado cash and purchases an NFT with it. The seller of the NFT then swaps their ETH for USDC on a decentralized exchange (the ETH then goes into a pool). Later, a liquidity provider to the ETH/USDC pool withdraws liquidity from that pool, and sends their ETH to an exchange, let's say Binance. If Binance blocked such deposits (and especially if they did so without refunding the user on-chain), no one would use Binance, and they'd also be the target of a lot of lawsuits.