The price for the Tornado Cash cryptocurrency TORN has retreated after spiking last week to a two-month high.
The coin-mixing privacy protocol, which enables users to conceal their blockchain activity, received attention in January as hackers used it to shield stolen ether (ETH) from the Crypto.com exchange.
What is Tornado Cash? In this article, we look at how the protocol works and how the TORN price has performed in the past year.
Tornado Cash provides transaction privacy
Launched in 2019, Tornado Cash is a decentralised non-custodial service.Tornado is a Layer 2 protocol that aims to optimise the processing times and fees of Layer 1 blockchains such as Ethereum.The protocol was developed by the team behind ZCash (ZEC) , a privacy coin that was a hard fork , or spin-off, from bitcoin (BTC) , with support from the Ethereum community.
Tornado Cash uses smart contracts that work as pools, accepting deposits of tokens from a recipient address and withdrawals to a different destination address.By mixing the assets, the pools cut the on-chain link between addresses, making transactions anonymous.
Users retain custody of their tokens while they’re in the pools.They have custody either by depositing tokens or registering to receive transfers.The strength of the protocol’s security and privacy depend on the volume of users in the pool.As more users mix transactions, the easier it is to preserve anonymity and privacy.
Privacy coins are emerging as a trend in cryptocurrency, with protocols such as Tornado Cash using Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (zk-SNARK) to verify transactions.Zk-SNARK technology enables users to provide proof that they have permission to make a withdrawal without revealing their deposit and therefore their identity.
The TORN token is the native governance token for the Tornado Cash protocol, used for voting on decisions about the development of the project.
It’s an ERC-20 token with a fixed supply of 10 million coins.There are currently 1.1 million TORN coins in circulation.
Tornado Cash launched a new version of the protocol, Tornado Cash Nova, on 15 December 2021, enabling shielded transfers and withdrawals of arbitrary amounts of ether.Tornado Cash Nova runs on the Gnosis blockchain, which was previously known as the xDai blockchain.
In the first version with fixed-volume pools, each deposit to a pool generated a private note that worked as a private key giving users access to the funds.With Tornado Cash Nova, funds are linked from the pool to a wallet address directly, so no private key is needed.
Tornado Cash had previously offered fixed amount pools for six tokens – ETH , DAI , CDAI, USDC , USDT and WBTC – on the Ethereum blockchain.
In June 2021, Tornado Cash became a cross-chain protocol, deploying its smart contracts on other blockchains and side chains and adding support for new tokens.Optimism was the most recent addition on 13 January.
According to data compiled by blockchain Intelligence Platform AnChain.AI in January, more than $10bn in cryptocurrencies was processed through Tornado Cash in 2021, generating more than 127,000 smart contract transactions.
AnChain.AI noted the potential for misusing the protocol’s privacy functionality: “AnChain.AI Labs has observed a rising trend of DeFi / NFT hackers that are adopting Tornado cash in their money laundering, including the recent $196 Million Bitmart exchange hack.
Smart contracts have enabled more sophisticated Money Laundering techniques than Bitcoin UTXO based CoinJoin, and Privacy layer 1 blockchain like Monero, which imposes new technical challenges for law enforcement and regulators.”
On 20 February, blockchain security and data analytics company PeckShield tweeted that a scammer who launched a phishing attack to steal non-fungible tokens ( NFTs ) from holders on the OpenSea marketplace, used Tornado Cash to wash 1,100 ETH.
The — PeckShield Inc.(@peckshield) [@opensea] scammer just made use of [@TornadoCash] to wash 1,100 ETH…
[pic.twitter.com/8KB6QxBC8P] [February 20, 2022]
The tornado cryptocurrency was announced in December 2020 and launched in February 2021 as the protocol’s governance token, with 5% of the supply, or 500,000 TORN tokens, airdropped to early adopters of the ETH pools.
The price for tornado coins quickly climbed from $214.29 on 9 February 2021 to $425.03 on 21 February, but then sold off and dropped to $26.13 on 20 July when cryptocurrency markets bottomed out.The price moved up during the summer rally to $95.06 on 27 August, but fell back again to end the year at $36.21.TORN spiked last week to $51.10 on 17 February, its highest level since early December.
On 9 February, a proposal for a decentralised relayer network that could increase token demand, volumes and annual percentage yield (APY) was submitted.A vote held between 14-19 February adopted the proposal.
The TORN price fell to a low of $33.72 on 20 February, moved up to $45.45 on 21 February, but dropped back to $33.97 on 23 February as cryptocurrencies sold off heavily in a risk-off financial environment.
What is the outlook for the TORN price for 2022 and beyond? Let’s look at some of the latest forecasts.
Tornado cash price prediction: Where will TORN trade in 2022, 2025 and 2030?
At the time of writing, technical analysis from CoinCodex showed that short-term sentiment was bearish at the time of writing (24 February), with 22 bearish indicators and just one buy signal.
But although it said “it’s now a bad time to buy a TORN token”, CoinCodex predicted that the token’s value could rise to $28.77 by 1 March.
Online forecasting site Wallet Investor was bearish in its long-term TORN crypto price prediction at the time of writing (24 February).The site’s algorithm predicted that the price could drop to $6.405 by the end of 2022, $2.147 by the end of 2023, bottom to $1.733 in 2024 and hit $2.447 by the end of that year.Wallet Investor expected the price to be volatile in 2025, trading between $1.80 and $3.385.By February 2027, the coin could trade up to $5.911.
By contrast, DigitalCoin ’s TORN coin price prediction was bullish for the long term, climbing from an average of $40.91 in 2022 and $46.57 in 2023 to $64.18 in 2025 and $141.97 by 2030, based on historical data.
PricePrediction ’s Tornado token price forecast expected a faster acceleration in price gains over the next few years, rallying from an average of $54.20 in 2022 to $166.25 by 2025.
By the end of the decade, the price could soar to $1,025.57, based on the site’s deep artificial intelligence-assisted technical analysis.
It’s important to keep in mind that cryptocurrency markets remain extremely volatile, making it difficult to accurately predict what a coin’s price will be in a few hours, and even harder to give long-term estimates.
As such, analysts and algorithm-based forecasters can and do get their predictions wrong.
If you are considering investing in cryptocurrency tokens, we recommend that you always do your own research.Look at the latest market trends, news, technical and fundamental analysis and expert opinion before making any investment decision.Keep in mind that past performance is no guarantee of future returns.
FAQs
In volatile cryptocurrency markets, it’s important to do your own research on a coin or token to determine if it is a good fit for your investment portfolio.
Whether the TORN token is a suitable investment for you depends on your risk tolerance and how much you intend to invest, among other factors.
At the time of writing (24 February), some of the forecast sites were mixed in their outlook for the TORN price .Wallet Investor expected the price to fall heavily.
Price Prediction and DigitalCoin expected the price to make strong gains.You should do your own research to form your own view as to whether the price will rise or fall in the future.And never invest money you cannot afford to lose.
As stated on the project’s website: “Tornado.cash was audited.However, it is still an experimental software.Please use at your own risk.” Always make sure to do your own research.
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