Tornado Cash Explained – Tornado Cash (Crypto Dapp) Added To Us Sanctions List – Explanation #Tornado #Cash


Tornado Cash Explained:

this is a really big deal even if it doesn’t slims like it so back all up and get ready for this crazy train of the video welcome to dz14 the number one youtube channel for crypto education and here we explain topics of cryptocurrency world using analogies stories and examples so that anyone can easily understand them in this video we’re going to explain what tornado cash is what the implications of being added to u.s sanctions list are and what it seems to the future of dapps that the united states doesn’t like first off let’s get into the tornado cache now before i explain what it does and how it works i want to share that actual creator of the ethereum himself has used this that many times but a tweet that he showed in 2020 now tornado catches a tool that runs on the ethereum blockchain and it’s called tumblr or a mixer now this is our just fancy a descriptive word to describe what it does and we do actually have an entire video about this topic but to put it simply tornado cache simply mixes your crypto with a bunch of other people’s crypto to be able to anonymize it in other words it attempts to erase the transaction history of a token now in reality you can never arrange the transaction history of a token but you can try to do it simply by using this method let me explain this with a fun analogy let’s say you’re running from the police and they didn’t see your face but they know that you’re wearing a red shirt this is all they know about you what’s the best place to hide well it sure would be nice if you had a warehouse full of people that are also wearing red shirts to hide in you could sleep into this warehouse hang out for a few hours while the police start asking some questions then you could sneak out a few hours later the police know that the people are entering with red shirts and they in they are leaving with red shirts because apparently it was a ratchet convention and they can’t stop people from leaving so effectively you’ve hidden yourself by making it possible for the police to identify you now in this story just replace the police with your neighbor your mom or someone trying to sue you and you can see the other side of privacy before we go much further if you have appreciated how simply that analogy was feel free to hit that like button and while you’re down there there also a link to join our newsletter it’s absolutely free and i usually send out emails to my thoughts and research before those becomes videos just to get some feedback on them sometimes i do giveaways and share every helpful illustrations as well and when you join you get immediate access to my g5 for beginner video series so feel free to download if you think this video is something that you like learn about moving on with crypto tumblers like tornado cash you’re doing very similar activities as running around with a red shirt now there are perfectly good reason to do this such as privacy concerns imagine if every dollar bill that you had contained an entire list of where that dollar had been sent maybe walmart some local drug dealers the vending machine at your local hotel maybe it was sent overseas to a fight to fight a war that you don’t approve of maybe it was sent through campaign funds to a local politician and then finally it made it back to you in this case money sure is more useful when it’s fungible but that’s for another video however there is also very legal reasons to do this such as money laundering otherwise known as trying to hide money that you got by stealing from smart contracts or common people online so that we know how tornado cache works and what it’s used for let’s get into the what the u.s sanctions are basically there is an organization called the office function assets control which is the government agency that investigates who the u.s should be blocked from doing business with obviously we shouldn’t be doing business with the criminals right well they put together this special list called the sdn or especially this negated national and blocked persons list and this contains a list of people groups of people and things that are not illegal to interact with some of these countries includes cuba iran iraq and north korea but recently tornado cash was added to the list this means it is now illegal for any us person to engage in trade or perform other dealings with the decentralized application known as tornado cash now for starters this means you definitely shouldn’t be using it it also means that you shouldn’t be depositing funds into the contract or withdrawing funds from the contract even if you put those funds in there before it was sanctioned but to go even further it also means donating to the project which is found on bitcoin i didn’t go to the project or even visited the website more questionably you may even be guilty if you’re found mining transaction that interacts with the application the maximum jail time if convicted could be up to 30 years in federal prison now i know that you were thinking this is crypto they can’t block a decentralized applications right well technically it is decentralized and they said it it was just very difficult to take down or prevent that resist transactions however putting on the sanctions list going to have ton of the second order consequences let’s get into those for starters any tokens used to perform must prevent usage of the applications possible so there is an example usdc which is a token created by the company circle actually has a few functions in their token smart contracts to do some pretty clever things in fact cleaver can block their usdc token from being deposited into any account or being withdrawn from any accounts on the blockchain level now lots of people don’t know this but sdc is actually quite decentralized and being a u.s government company circle is very likely to block any of the addresses associated with tornado cash so now usdc can’t be used with radio cash big deal right well there are quite actually a few other tokens that operate the same way two were the most used being tethered and dropped bitcoin now you may argue tornado cash is still effective from mixing ethereum though right and you’d be most correctly however by being on the sections list there are many people who will be deterred were using it in fact tornado cache becomes exceptionally more useful the more people that use it so if less people are using it then it becomes much easier to track those transactions going through it back to our red t-shirt analogy would be easier for the police to track you if you went to a room of 10 people or a room a thousand people now moving on as i mentioned earlier you may even be committing a crime if you are money ethereum and you process transaction associated with radio cache now one simple way around this is that the ethereum miners software could be updated with a blacklist what a list of accounts to never process transactions for which is a totally viable thing to do and it’s very similar to the result of 21 attack they just say here a list of addresses not approach transaction 4 and then software ignores them and never process them again now this is a very scary thing to do purposefully and you will likely remove a lot of trust in so-called decentralized applications another second other consequence this will create is that centralized exchanges may start blocking or reporting any transaction to their accounts that they think they may be associated with their sanctions accounts now of course when you sign up to these exchanges they collect your name your social security number your address and basically enough personal information to identify you and your upcoming transactions this will basically get rid of on-ramps and off-ramps for people to be able to turn the sanctioned money into cash now of the one other thing that worth mentioning is that access to the tornado cache website can be actually blocked by your isp and that company that gives you internet they can simply block any tornado cache web address from being delivered to your address and they can also prevent any dns domain named locals from resolving tornado hash the an ib address effectively preventing you from using them now some developers out there may say this simply blocks the user interface to a tornado cache though science tornado catch is a smart contract if you know the contract address you can still interact with the contract let’s move on to another topic though let’s talk about blackmail if someone sends you trained money can someone blackmail you by sending you a large sum to your address personally there have been many situations where i simply just empty one of my ethereum wallets over to queen best to be able to withdraw trade or move that money somewhere else if i had say been sent five dollars of ethereum from ascension address without knowing it then i would have simply deposited one hundred dollars good five got five dollars gift and then withdraw one hundred and five dollars and i would have been assumed that five dollars with market for insurance and when i said when in reality it was someone trying to train my account however if coinbase has a list of blacklisted address and they see that i got money from those about addresses they may also assume that i was doing business with a bad actor and then they could spend to spend my account or possibly even keep my phones this leaves out a question how far can we arrivally raise bad funds maybe we set a limits of 100 accounts money has to go through 100 accounts before can say that definitely not associated with the dirty money now you still liable for violating the sections well we could put this idea in fact but this is a bad idea because i could technically write a script that moves ethereum between 100 accounts in a few seconds so i would be very easy to low-fall for someone to perform next up let’s move to a possibly solution of these sanctions as some already thoughts off and forked radio cash right will the problem with this is that the fork will needs a lot of money a lot of time remember the more people you are in the red room the better the protocol works to anonymize your funds if there is only one million in the next protocol it would be effective if they could 100 million locked up in it as of right now tornado catch has a little bit of 400 million locked up in it one thing to know to keep in mind is that the same legend can’t keep up with the rate of the technology tornado cache has been around for a long time and sure someone can make tornado cache 2.0 which isn’t sanctioned by the tv al reaches a height number enough number when enough money is locked up into it the new version it will be sanctioned again and again and again but there always will be delay between builders and legislators one question i want to leave you with what does it mean for monero monero is privacy token it’s like if you took every transaction of ethereum and run it into tornado cache well if the us added adapter to the sanctioned list can definitely add a coin this would be a very but for manero as it would ensure that u.s sanctions removed money from their listings which would be greatly prevent from preventing people from changing assets this does mean it would be the end of monero but it would probably not be good for future developments or for price actions wrapping this video up hopefully you have a better understanding of what tornado cash is what it does and how it’s been affected by the u.s sanctions and what it means moving on forward

Sharing is caring!


DZ4Team is a Web development team, We offer all types of scripts, installing, supporting and hosting. Contact Us:

Leave a Reply