Tornado Cash: The Push For Decentralization Is On

in LeoFinance2 months ago

Sometimes, in the evolution of an industry, there are watershed moments. Tornado Cash might be that for the blockchain and cryptocurrency world.

For a few years, many discussed the idea of decentralization and how anything outside of that is vulnerable. Most of this fell on deaf ears as people allowed greed along with the thirst for power to reign supreme.

The reality is governments are not going to stop. There is a major target on cryptocurrency, something that will be a rude awakening to many. In short, the industry is far too centralized. Most of what we see is primed for attack. The lesson of Tornado Cash should be heard by all in the industry.

Basically, the message is clear: decentralize or else.

Anyone who does not listen will be subject to harassment, or worse. Governments are not going to idly sit by while losing all control. The bottom line is it will have to be taken from them.

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Bet On Developers

The challenge for the governments is you have a bunch of politicians and bureaucrats taking on developers. In this era, we see an interesting fight. While the former has size as well as resources on their side, the latter is more versatile. Plus, there are developers all over the world who are involved in this battle.

Open source software is one of the best defenses against the tyrannical states that are coming down on people. For this reason, every layer of our infrastructure needs examining. The points of vulnerability are clear.

This is a message that was echoed by a user on Reddit, @AllwaysBuyCheap. This developer was focusing upon the weaknesses tied to Ethereum. Nevertheless, many do apply across the board.

For a summary of what was discussed, read here.

Conversations like this are very encouraging. As developers espouse the areas of vulnerability along with proposed solutions, someone will get working on them. Here is where the proper mindset is vital.

Much of cryptocurrency, thus far, was nothing more than a money grab. This occurred at every level. However, the future is going to be teams that develop with the idea of decentralized from the start. In other words, the power must be given up immediately.

This might seem like a problem since it would appear to go against human nature. Here is where the government might come in handy. Simply put, anyone who has control is a target. That might provide the incentive to want to cede it from the start.

The Wisdom Of Satoshi

Satoshi Nokamoto was a genius.

This statement is not made for the development of Bitcoin. That was innovative but far from the only project of that nature.

The genius part was to have the foresight to remain anonymous. Can you imagine what things would look like if he/she was known? The story of Bitcoin probably would be different.

Nevertheless, the lesson was imparted. The fact that nobody knows who Satoshi is means that the point of failure is removed. There is nobody for the government to go after.

In addition to anonymity, we also can receive defense from duplication. Open source software means redundancy. One of something can be attacked and taken down. Yet, if there are a few dozen of the same thing, it gets a lot harder.

Bitcoin most likely cannot be stopped due to the distribution of miners. Leaving that aside, the main defense for this is the fact that Bitcoin could be forked 1,000 times. While the new systems might not have the value of the original, the software would run. It becomes the proverbial game of whack-a-mole.

Web 3.0

The idea of the next generation Internet is espoused regularly. To many, Web 3.0 means adding a token to an application and, presto, new Internet. That is people are misled.

A major part of the transition to Web 3.0 is going to be the development of infrastructure. That is the core of what has to take place. The present Internet, Web 2.0, is too centralized. This applies to a lot more than just the silos built by the social media sites.

Web 3.0 has to be built from the ground up. This means things such as DNS need remaking. Node systems of all kinds are required to start the storage of data away from the likes of AWS. The other day we wrote about the dangers of GitHub and the need for alternatives.

The point is that people are approaching projects with the mindset of creating new infrastructure that is outside the reach of governments. Since we are dealing with global initiatives, there is already a degree of difficulty for those in power.

Governments excel when people are located within a certain geographic region. They are able to control individuals based upon this. With the digital realm, the rules of engagement are completely different. Under this scenario, people are spread all over the world.

What is the US Government going to do against an anonymous developer from Bangladesh? Or what action can it take against a team developing open source software with members from Japan, Korea, Brazil, and Malaysia? What does the situation look like when there are contributions from people in 15 different countries?

Tornado Cash was a warning. The US Government is now willing to go after smart contracts. This is not going to be the last time this happens.

So what is the solution? Simply, the government goes after Tornado Cash and some developer with a bone to grind opens up a few dozen mixers in response.

Lose one, 20 more appear.

Open and decentralized is now going to be in focus.


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I actually heard that the developers had already spun up a new version or something like that. I don't know how accurate that was, but given what we know, it wouldn't be all that surprising.

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Highly possible.

Might not even be the same devs. If others had the code they might have done the same.

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Yeah, it could have been other people. I don't remember now.


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after skimming through the linked article and your post I still have no clue what the frick is Tornado Cash. Cool name though

It is a mixer whereby you can put coins in and tracking is difficult (if not impossible).

The Government doesnt like that since they wont know everything each person is doing.

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didn't know that was a thing lol :)

Feel free to check out the article I wrote about tornado cash this week. The regulation around it does not make a ton of sense.

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True decentralization comes when you stop accepting Fiat for your services.
No more than 100 dollars for this service! I want 50 of whatever crypto and I don't accept dollars, I don't accept Fiat.
This is nothing innovative, it has been done all my life. The latest example is the Russian central bank. sanction me? Do you want to sink my coin? I do not accept Dollars, Euros, ect... Pay me in Rubles! My work only in Bitcoins. Your dollars are worth nothing to me because I don't want them.
As long as we continue to lose our asses for Fiat currencies, nothing will change, that is the harsh reality.

That is nice in theory however the fact is that few can survive on cryptocurrency since there is not everyday goods and services sold for crypto.

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FIAT Ponzi Maxis will cling to their entitlements like a Mad King to the throne. We have to empower one another, stand up for the movement and don’t look back even for a second.

The way that politics and FIAT banking has grown together can not be overestimated.

If you commit to open source software that allows for anonymous earning and accounting, don't sleep with your mouth open in California.

It's not clear that decentralization will or would save Tornado.cash.

The actual smart contract is already permissionless and decentralized. You can use it from front ends other than tornado.cash.

However, anyone who provides funds or receives funds from the mixer is now at risk. If you were previously providing liquidity to the mixer without being involved in any particular crime, there is now the risk that your account address will be sanctioned by exchanges, and it will be substantially more difficult to exchange your ETH and tokens for other tokens. This seriously undermines fungibility on Ethereum.

With fewer people providing liquidity, only those willing to take the risk of jail time and/or bagholding tokens they can't exchange continue to use the service, and that increases the risk of your particular account getting associated with a crime, and reduces the effectiveness with which the mixer can hide your identity.

I'm not aware of any mixing service on Hive but we do face essentially the same danger in the future. If a Hive account or service is blacklisted/sanctioned by the state, how many among us will defy the state and continue to accept Hive from blacklisted or sanctioned accounts, at risk of state violence? The US in particular is quite capable of extending its enforcement powers well past its borders.

There are no mixers for Hive at the moment but non-KYC exchanges used with VPNs or Tor can serve the same purpose.

If a US sanction blacklist actually came into force on Hive, it's unlikely that non-KYC exchanges would continue to honor deposits from blacklisted accounts or their derivatives for very long.

Maybe. But there are many such exchanges lurking in the shadows.

this might be a good reminder that a mixing service could be a great addition to Hive if that is even possible. Until then there are many ways currently to convert Hive to other coins/tokens; one is also the Hive>Lightning conversion

That is true. It is a smart contract. Of course, other front ends spun up would make it tough.

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Hive is rather well placed in this fight. Witnesses can easily set up shop in jurisdictions friendly to running nodes if necessary.

One of Edward Snowden's criticisms of Bitcoin was the lack of built-in fungibility in the form of zero-knowledge proofs like Monero has to make sure transactions can be truly anonymous.

This is a legitimate discussion point. The lack of privacy is an issue in most of crypto. Will that be addressed going forward?

I have a feeling the governments are going to push some devs in that direction.

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What an informative content. If Satoshi was known by the world government, believe me hell either be in jail or completely forgotten but not before they screw him to get all the secrets that could have brought this innovation down to the pit. He was and still is a genius wherever he is now.

Yeah he would be tortured to no end.

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I often wonder what will happen to the data stored on this Web 2.0 sites when an unfortunate turn of events happen and they have to be shutdown.

I think building web 3.0 requires being decentralized from the get go. That way, there will be little to no point of vulnerability. Although it might require some sacrifice and will be harder to grow in the beginning, the pros far outweighs the cons in the long term. Besides, that's where almost everything is heading too; Decentralization.

Governments are becoming a loose cannon and will shoot at any target they can set their eyes on.

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Governments are on a roll, there is no doubt about it. We are not going to see them stop anytime soon.

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I believe anything that will work against any government over the world the creator should be unknown because of obvious reason you have mention here. Hive have this kind of power too because there is nobody they can attack and even if they stopped a witness in one country another will still be running perfectly in another country

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Just stay under the radar and keep building. That is the key.

We need to get global penetration. That is how we combat what is taking place.

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The war is now on, lessoned are being learned, time for devs focusing on money is behind us. It is now time for complete decentralization. Incidents like these are needed, for a stronger decentralized crypto space which is what we need.

Satoshi Nokamoto what a genius God gave to humanity!

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As Dan likes to say, there were billions of VC money poured into crypto projects. Many of them are open source.

Time to take the tech and start to build around it.

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Yeah the government won’t stop at seeing anonymity and not having total control as an end to their toxic handling. Tornado Cash comes handy for those who live under oppressive governments. Vitalik Buterin, the founder of Ethereum, came out in defense of the service this week, writing on Twitter that he himself used Tornado Cash in order to donate to Ukrainian causes without putting the recipient organizations under extra scrutiny.

Does that mean his wallets are now banned.

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This is why I am going more and more into Monero and as soon as I get a spot that I can, I will be mining the heck out it! Privacy at it's purist!

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The question is how much privacy do we start to see added to these chains?

It is something that is going to have to be addressed by devs around the world.

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Unless it is at protocol level, it's not private. Like with DASH and ZCASH, their privacy features are not default features and are an elected feature. It's cool and all, but still allow for lurkers. And in ZCash's position. Many say the ZK Snarks feature is actually a backdoor.

Litecoin tried with Mimblewimble, but doesn't really do anything because the primary layer is still as transparent as Bitcoin.

I have been looking at DERO as well as a privacy smart contract chain, but there is allot of work that still needs to be done there.

Secret Network is cool, but transparent at base layer. You have to 'wrap' your assets to make them private.

Monero is still privacy king. Hive needs an encrypted privacy layer for transactions, not just memos, that would be cool.

Dero is an Aussie abbreviation of Derelict and is a pretty damning insult. Easy to remember :)

You know what goes through my mind with this post? Well you are about to. Lol.

How lucky we all are to be a part of Hive. And I can guess that a large portion of people on Hive does not realize it.

We need more of this type of education to all Hivians and beyond.

Keep at it man.

!BBH

!ALIVE

!CTP

Threading this post.

Hive does offer opportunities but no privacy. That is something to keep in mind.

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privacy. Or the lack there of is one of the things I love about Hive. Privacy, in my humble opinion, is highly overrated.

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The tip has been paid for by the We Are Alive Tribe through the earnings on @alive.chat, feel free to swing by our daily chat any time you want.

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Because this is such an awesome post, here is a BBH Tip for you. . Keep up the fantastic work

I like the idea of having one go down and 20 come out in its place. It's going to be tough for the government to target each one and it will be even worst if they can't target the group behind it.

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The fact that a person who developed code has been targeted by government lackey's shows what is at stake for champions of decentralization. It is not about you... you are the point of weakness and potential failure for the project.

We knew this was coming. Agents raided "Nakamoto's" house in Australia when they thought they knew who he was... all he did was develop a computer code that serves as an alternative to money... nothing illegal, yet... his house was raided by government agents.

I am excited for Haven (XHV) to be listed on THORChain in the next few months. Haven is a Monero fork and ThorChain is fully decentralized. Trading your tokens into Haven on ThorChain - then creating new wallets and trading back to whatever you want will effectively do the same thing as Tornado cash.

This is merely another bump in the road and hammers in the fact that decentralization is a must.

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While I support the right. There's a need to develop means to curtail the use of 'mixers' to launder funds stolen during Blockchain or defi hacks. The trend is becoming worrisome. There are reports that about 1.5 billion USD worth of stolen crypto were laundered via tornado cash.

Absolutely killing it, Taskmaster. Where to even begin. Man, this whole writeup goes right along with what I wrote about in my first viral article the other day (https://leofinance.io/@mercadomaestro/it-s-been-a-while-leo-community). Decentralization isn't a spectrum, either you fulfill the promise or you don't.

I'm a big fan of supporting infra

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