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What is Tornado Cash and why was it sanctioned in the US? - Crypto in Plain English - Episode 237 - by cryptohunt.it
CLICK HERE to learn more about Ethereum through our FREE course!
What is Tornado Cash and why was it sanctioned in the US?
Welcome to the Cryptohunt Jam, where we spend one minute a day to explain crypto. In plain English.
Today we are going to take a quick look at Tornado Cash, a so called mixer or tumbler for crypto.
This service allows crypto holders to hide the true origin of their funds.
Remember that sending crypto is usually simple and traceable: One address sends a specific amount to another and anyone can see that transaction because the history is public.
Some people, however, want to stay not only anonymous, but move around money in a way that origin, destination, and amount are all untraceable.
Tornado Cash does that. It works a bit like a bucket. It combines incoming funds from all kinds of senders before it sends them to destinations in random amounts - hence the term blender. That way, it’s near impossible to figure out who sent what where, even though we have the transaction history.
Think no good can come of that? So does the US government which says that Tornado has been involved in money laundry with North Korea. It just sanctioned the use of the service and 45 associated wallets.
And next time we’ll talk about why those sanctions could pose a real practical problem for blockchains like Ethereum, even if they didn’t necessarily do anything wrong.
Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.
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By cryptohunt
5
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CLICK HERE to learn more about Ethereum through our FREE course!
What is Tornado Cash and why was it sanctioned in the US?
Welcome to the Cryptohunt Jam, where we spend one minute a day to explain crypto. In plain English.
Today we are going to take a quick look at Tornado Cash, a so called mixer or tumbler for crypto.
This service allows crypto holders to hide the true origin of their funds.
Remember that sending crypto is usually simple and traceable: One address sends a specific amount to another and anyone can see that transaction because the history is public.
Some people, however, want to stay not only anonymous, but move around money in a way that origin, destination, and amount are all untraceable.
Tornado Cash does that. It works a bit like a bucket. It combines incoming funds from all kinds of senders before it sends them to destinations in random amounts - hence the term blender. That way, it’s near impossible to figure out who sent what where, even though we have the transaction history.
Think no good can come of that? So does the US government which says that Tornado has been involved in money laundry with North Korea. It just sanctioned the use of the service and 45 associated wallets.
And next time we’ll talk about why those sanctions could pose a real practical problem for blockchains like Ethereum, even if they didn’t necessarily do anything wrong.
Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.