Key points to remember
- Tornado.cash is Ethereum’s premier privacy solution.
- The tool allows users to make a deposit to a smart contract and withdraw funds from a separate address.
- It works by using a hash and grouping groups of similar transactions together in the same contract.
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Ethereum currently processes around 1 million transactions per day. Due to the open nature of the blockchain, however, every address associated with a transaction on the network is recorded in a public ledger. This can present problems for users who wish to prevent information such as their holdings or business activities from appearing in the public domain. Tornado.cash aims to solve this problem.
It is a tool that allows users to maintain their privacy when making transactions on Ethereum by allowing deposits to a smart contract and withdrawals from a separate address.
Since a deposit can be withdrawn from a brand new address, it is much more difficult to locate the sender.
Tornado.cash works by mixing sender and recipient addresses with several other transactions in a single contract. This guide explains how it works with a step by step process for interacting with the software.
How to use Tornado.cash
1. Connect your wallet
To send a transaction, you need to start by heading to the app and connecting a wallet. Tornado.cash’s application interface currently supports Metamask, Portis, and Fortmatic.
2. Choose your token deposit
Select the “deposit” tab, choose the token and the amount you want to send. Supported tokens are ETH, DAI, cDAI, USDC, and USDT.
Tornado.cash mixes transactions with others in a deposit contract to make it more difficult to find the sender and recipient for each deposit. That’s why you can only send certain denominations of each currency – transactions would be too easy to trace if everyone sent a slightly different amount.
To send ETH, for example, users can choose between 0.1, 1, 10, or 100.
3. Save your note
When you make a deposit, you also generate a random key. This should be saved as you will not be able to withdraw funds from the smart contract without it.
Your browser will automatically prompt you to save a text copy of the key. It will also appear on the screen. Make sure you have saved a copy before continuing.
4. Send the deposit
Once you have noted your random key, highlight the box next to “I saved the note” and click “Submit a deposit”.
This will initiate the transaction, allowing the deposited token and a hash of the note to be sent to the Tornado.cash smart contract. The transaction and gas charges will also need to be confirmed in your wallet i.e. Metamask.
Tornado.cash recommends that users wait “some time” before making a withdrawal. This is because it becomes much more difficult to follow the transactions of the deposit contract once many other similar transactions have been made.
If you make a deposit and then choose to withdraw immediately, the timestamps between the two transactions could reveal your fingerprints. The photo below shows a series of transactions on the 0.1 ETH deposit contract.
Reconnect your wallet if you need to and select the “Withdraw” tab.
You can then enter the note you saved during the deposit, as well as your withdrawal address.
As with contract filing, the transaction and gas charges will also need to be confirmed in MetaMask or another wallet.
You might want to use a brand new address without any previous transactions. This way, it becomes difficult for anyone to determine the address you sent it from when the deposit is mixed up with several other similar transactions.
While it is still difficult to achieve complete anonymity on the blockchain, Tornado.cash might be the current best option for those who wish to maintain privacy when processing Ethereum transactions. The team behind the project recently proposed the launch of a native token and governance metrics.
In one blog post detailing the plans, they wrote:
“The fundamental principle of Tornado.Cash is that privacy is a human right”
Disclosure: At the time of writing, the author of this feature owned ETH, among a number of other cryptocurrencies.
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