Coin Mixing: How to use Tornado cash for maximum anonymity and privacy on Ethereum.
In this golden age of blockchain technology, a lot of innovations have come to light among them are cryptocurrencies and blockchains. There are dozens of blockchains out there such as Bitcoin, Ethereum, EOS, Cardano, Tezos among others.
These blockchains are public ledgers meaning all transactions are by default accessible by every Tom, Dick, and Harry. Although it may sound like a bad idea for anyone to access payment and transaction history via any blockchain explorer, this is indeed a feature of all public blockchains and boosts transparency and accountability.
Another feature of blockchains is immutability, meaning that any information stored on them can forever never be altered or Deleted.
Having your transaction information public comes with its risks.
Who is at Risk?
ICO(initial coin offering) investors. There have been multiple cases of identification documents most customers provided during the ICO boom of 2020 being sold on the dark web by some fraudulent ICOs that went bankrupt. This is the equivalent of having your banking information displayed on a billboard. It is very scary!
2. Have you ever used a centralized exchange like Binance, Coinbase, Kucoin, etc.? These centralized exchanges require customers to undergo KYC( know your customer). All cryptocurrency public keys you use on these exchanges will forever be tied to your KYC.
3.If you have ever logged in using your "real life" email address to buy, sell, or send crypto the email addresses you used are linked to the cryptocurrency public addresses attached to you.
Why do we need anonymity while using cryptocurrency?
Cryptocurrency information is financial information, and it can be manipulated by criminals to extort money from innocent crypto holders.
4.Cryptocurrency is still illegal in many authoritarian regimes across the world.
5.Political dissidents, journalists, and refugees fleeing authoritarian regimes need to keep their financial information private to avoid oppression.
The solution: Tornado cash coin mixer
Tornado cash is a coin mixer that provides privacy on the ethereum blockchain. It can also be used to mix bitcoin by first converting BTC to an ethereum based token to RenBTC through the Ren protocol.
Tornado cash enables complete anonymity by severing the link between your source address and your destination address and obfuscates it using ZKsnarks technology, making it untraceable from its source.
The users can deposit Ethereum or ERC-20 tokens to a smart contract and withdraw it in a brand new (never used ) address.
This is how the process works:
1.Navigate to the Tornado cash website.
2.Deposit ETH or ERC-20 token and click the launch app icon. Always check and confirm that your current IP address and location are not exposed. If it shows your current location and IP address, stop the process and check your VPN connection.
3. Click the connect button and choose the amount of ETH you would like to deposit. You can deposit ETH in chunks of 0.1, 1, 1, or 100 Ethereum.
Connect your Source wallet; this can be either Fortis or Formatic wallets.
Once your wallet is connected. click deposit. Once you deposit you will be provided with a note starting with tornado-eth-**********. This is the equivalent of your private key and you will need it as proof in-order to withdraw your Ethereum. Make sure to back it up in a safe place . keep it secret do not copy and paste it in any electronic devices. If you lose this key you will irrecoverably lose your ETH.
4. Let tornado cash do the blending magic. You can also confirm the number of transactions submitted by other users.
The more the transactions, the better the blending. It's always advisable to wait for a considerable amount of time to get the best results preferably 24hrs or more. Like making a smoothie in real life, the longer the blending time, the better and tastier the smoothie.
5. Withdraw to a brand new address you can use metamask or whichever wallet you prefer. For more information on how to download and install Metamask wallet please read this article. This is an essential part of the transaction. Make sure the wallet is brand new and has no previous history on the Ethereum blockchain. To confirm if the wallet has any history, copy the wallet address and paste it on etherscan.
Input your secret note in the upper box and your brand new ethereum address in the bottom box titled recipients address and click the withdraw button.
There are two withdrawal options
select the Relayer option. Since you will be using a brand new wallet for the withdrawal, there will be no ETH in the new wallet to cover the gas fee. To ensure maximum anonymity, the Relayer deducts a small amount from the deposit amount to cover the gas fee and send the withdrawal transaction.
6.Enjoy and spread the word.
Best practices for maximum anonymity
Spread out multiple withdrawals and wait for some time to pass before withdrawing preferably more than 24hrs. If your deposits and withdrawals are back to back there is always a high probability of someone guessing that they are from the same transaction.
Always clear all your browser cookies and decentralized apps cookies you might be using before using tornado cash. This is because your old cookies can end up being linked to your new cookies and link to your new address. always clear cookies from your web browser and Dapps.
Always use a VPN or Tor browser. privacy-centric browsers like Brave browser are highly recommended. This is because your internet service provider can log your activities including the websites you interact with.
Your country of residence day time hours can be used to guess your current location. always make sure to avoid using distinct and predictable hours that can be used to guess your current location. Remember it better safe than sorry.
Disclaimer: The content of this article is purely for educational purposes and should not be taken as investment advice, defianalytica does not endorse and is not affiliated with any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your due diligence before taking any action related to the content within this article. Always follow the law under your jurisdiction when trading cryptocurrencies. Finally, DeFi Analytica does not take any responsibility should you lose money trading cryptocurrencies.