Tor

Tor is a privacy network and the free, open-source software used to access it. It protects users by sending their internet traffic through a chain of three relays run by volunteers around the world, wrapping the data in several layers of encryption so that no single relay knows both who the user is and what they are visiting. The name began as an acronym for The Onion Router, after the layered technique known as onion routing. Most people use Tor through Tor Browser, a modified web browser maintained by the Tor Project, a US non-profit organization.

Tor is used by journalists, human rights workers, researchers, people living under internet censorship and ordinary users who want to limit tracking. It also hosts onion services, websites reachable only through Tor, including the hidden marketplaces that make up much of the dark web. This dual reputation, as both a tool for censorship resistance and a haven for crime, shapes debates about Tor in finance and crypto.

Imagine sending a letter inside three sealed envelopes, each addressed to a different courier. The first courier knows who you are but opens only the outer envelope, which tells them to pass it to the second courier. The second knows neither you nor the final destination, only the couriers on each side. The third opens the last envelope and delivers the letter, but has no idea who wrote it.

Tor works like that for internet traffic. Your computer wraps each request in three layers of encryption and sends it through three volunteer computers. Each removes one layer and passes the rest on. The website you visit sees only the last computer, not your own IP address, and none of the computers along the way has the full picture of who is talking to whom.

Onion routing was developed in the mid-1990s by researchers at the US Naval Research Laboratory, who wanted a way to protect government communications online. In the early 2000s, computer scientists including Roger Dingledine and Nick Mathewson, working with Paul Syverson of the laboratory, built the second-generation design that became Tor, and the code was released under a free licence. The Tor Project was founded as a non-profit in 2006 to maintain the software. It has been funded by a mix of US government grants, foundations, companies and individual donors, which has prompted criticism from some who distrust government involvement, while the openness of its code allows independent review.

• Circuits. Tor software picks three relays: a guard relay that the user connects to first, a middle relay, and an exit relay that connects to the open internet. Circuits change regularly.
• Layered encryption. Data is encrypted once for each relay, and each relay can remove only its own layer, so no relay sees both the source and the destination.
• Onion services. Sites with addresses ending in .onion can be reached without leaving the Tor network, so both the user and the site keep their locations hidden.
• Bridges. In countries that block Tor, unlisted entry relays and traffic disguises help users connect.

Tor protects the route, not the content. Traffic leaving an exit relay is readable unless the website uses encryption such as HTTPS, and users who log into personal accounts reveal their identity anyway.

Tor and cryptocurrency developed in overlapping communities with a shared interest in privacy. Bitcoin node software can run over Tor, which hides a node's IP address from other peers and makes it harder to link transactions to their origin; many privacy-minded users run a full node this way. Several wallets offer built-in Tor connections, a feature covered under Tor integration. Tor was also central to darknet markets. Silk Road, shut down in 2013, operated as an onion service and accepted bitcoin, and later markets increasingly used Monero. Some exchanges and financial services restrict or block traffic from Tor, citing fraud and compliance concerns, while privacy advocates argue that such blocks penalize legitimate users.

Tor is slower than an ordinary connection, because traffic passes through several relays. It does not protect against malware on the user's own device, mistakes such as logging into personal accounts, or attackers able to watch both the entry and exit of a circuit, who may match traffic patterns to identify users. Malicious operators have run large numbers of relays in a form of Sybil attack, sometimes to tamper with traffic leaving exit relays, including attempts to swap bitcoin addresses on unencrypted pages. The Tor Project removes such relays when they are detected. Law enforcement agencies have unmasked some onion services through software flaws and operational errors, and governments argue that Tor shelters crime, while civil liberties groups describe it as a vital privacy-enhancing technology. As of November 2026, Tor remains legal to use in most countries, though some governments actively block it.

• The Tor Project