Tor
Also: onion routing
network · intermediate
Anonymity network that routes traffic through multiple encrypted relays. Bitcoin nodes use it to hide their IP addresses from peers.
Tor wraps your traffic in layers of encryption, sending it through three volunteer-run relays before it reaches the destination. Each relay only knows the previous and next hop, so no single party knows both who you are and where you're going.
For Bitcoin, Tor solves the network-level privacy gap. Without it, your node leaks your IP to every peer you connect to, and chain analysis firms can correlate broadcast transactions with originating IPs. Bitcoin Core has supported Tor connections natively since 2014 and v3 onion services since 2020.
Tor has tradeoffs: latency, occasional relay churn, and the fact that high-quality eyeball-correlation attacks at the entry and exit can sometimes deanonymize traffic. For a self-sovereign node, the privacy gain almost always justifies them.