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25 sats \ 4 replies \ @om 9 Aug 2022 \ parent \ on: US Treasury Adds Ethereum Privacy Tool 'Tornado Cash' to Sanctions List bitcoin
Here's an example of a public black hole: LN. Not quite reaching Monero levels of privacy, but way better than the chain. Does LN scream "ban me"?
Lightning network is a network while tornado is a centralized/public black hole.
Apples to apples.
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Tornado is not centralized, it's an unupgradeable smart contract. But the important part is that evil NK hackers laundered money through Tornado.
Now instead of using Tornado they will launder Bitcoin like this:
- open a channel to a random LN node using dirty Bitcoin
- rent inbound liquidity from someone with clean Bitcoin
- pay through LN
- close the channels
... and they're left with clean Bitcoin. Do you see now why LN might be the next target of sanctions?
And Fedimints are basically mini-Tornados with LN support.
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You are spot on. This is happening right now.
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You are looking at techniques to accomplish the same thing. One works poorly relative to the other, but the results are roughly similar. One is easily blocked the other is not. So as a technique, yes Tornado mixer is a worse approach.
My problem is not necessarily with a centralized mixer but with the regulations that make using a mixer a prohibited activity. But in the current environment, absolutely that Tornado mixer getting banned should not come as a surprise to anyone. We knew governments would fight back. And not only will this be the extent of it, I am pretty sure they haven't even yet begun to fight.
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