What is Tornado Cash and How It Works

Tornado.cash is a blockchain-based privacy protocol built on the Ethereum blockchain. It enables users to break on-chain links, offering high-level financial privacy.

Unlike centralized mixers, Tornado mixer uses smart contracts that function autonomously, ensuring that users retain sole ownership of their funds at all times. This trustless setup brings transparency and removes any central point of failure or censorship.

The core of Tornado.cash lies in privacy-preserving proofs, which allow participants to verify without disclosing specific deposit information. This ensures unlinkability between the deposit and the withdrawal.

Due to its anonymous structure, Tornado mixer quickly attracted users by those seeking financial discretion. It’s used for securing personal fund flows, among other legitimate needs.

However, this tool has also been scrutinized from governments. In 2022, the U.S. Treasury’s OFAC sanctioned the use of Tornado.cash, citing allegations of unauthorized use. Still, the protocol remains active since its smart contracts are permanently deployed and cannot be taken offline.

Defenders believe that Tornado Cash is a permissionless system, much like the internet itself — tornado cash and that code should remain free, even if some actors misuse them.

Use cases for Tornado Cash include:

Avoiding surveillance on major transfers

Anonymous fundraising in hostile regions

Shielding transaction data from competitors

As governments around the world push for more surveillance on fund movement, the demand for tools like Tornado Cash continues to rise. The future of decentralized privacy hinges on whether open-source technology will be protected or suppressed.

Whether you're a financial user or just someone looking to protect your funds, Tornado Cash remains a powerful tool in the world of on-chain confidentiality.