New alternative cryptocurrency aims to improve Tor network

Google+ Pinterest LinkedIn Tumblr +

Last updated on June 11th, 2014 at 12:17 am

A new alternative cryptocurrency based on the Bitcoin protocol was recently announced, and it’s aiming to fix a long-standing problem that exists within the Tor network: slow network speeds due to a shortage of volunteers.

It’s called TorCoin and its goal is to offer incentives to those who voluntarily run Tor exit relays. The more exit relays there are, the faster and more secure the Tor network is.

“Solving the problem of compensating Tor relays is attractive in that it might immediately improve the scalability of the Tor network,” reads the TorCoin white paper.

“When you use the Tor software, your IP address remains hidden and it appears that your connection is coming from the IP address of a Tor exit relay, which can be anywhere in the world,” explains the Electronic Frontier Foundation’s (EFF) website.

“The Tor software depends on the Tor network, which is made up of Tor relays operated by individuals and organizations all over the world. The more Tor relays we have running, the faster, more robust, and more secure the Tor network will be.”

Instead of rewarding based on computation, as the Bitcoin protocol does, those who run a Tor exit relay will be rewarded in TorCoin based on how much bandwidth is transferred over the Tor network. This is referred to by the developers as “proof-of-bandwidth.” TorCoin can then be sold on any existing altcoin exchange, according to the white paper.

Coupled with TorCoin, a “secure bandwidth measurement mechanism” called TorPath will be used to “assign each client a Tor circuit that is publicly verifiable, but privately addressable.” TorPath is used to “sign” each TorCoin, and allows anyone to verify the validity of a TorCoin by comparing signatures in the blockchain.

According to the white paper, the TorPath protocol adheres to the following constraints: 1) No client can generate its own circuit, 2) Every circuit has a unique, publicly-verifiable signature, and, 3) No client can know the circuit of another client.

TorCoin was announced following the EFF’s challenge to increase the number of Tor relays, and is being developed by Yale researchers Mainak Ghosh, Miles Richardson, and Bryan Ford, along with Rob Jansen of the U.S. Naval Research Laboratory.

Richardson says that the researchers are currently working on “developing a prototype, and/or a network simulation to run experiments.”

As noted, it is yet to be seen as to whether TorCoin will gain in popularity and value, or even whether the network would be secure against a Sybil attack in which a large number of pseudonymous identities are created to subvert the system through a disproportionately large influence.

“Colluding clients and attackers needs to control all four components of a circuit to mine TorCoins fraudulently. Even if an adversary controls up to half the network, only assigned circuits will be fully colluding. In practice, we hope and expect that gaining control of even half of all Tor clients and relays would be difficult. To limit the impact of occasional colluding circuits, TorCoin also limits the number of coins each circuit can mine. This coin number is included in the blockchain, so it is easily verified. The impact of compromised circuits can be further reduced by ensuring that consensus groups expire at regular intervals, requiring clients either to form new circuits or cease obtaining new TorCoins from old circuits,” reads the white paper.

At the very least, TorCoin offers an innovative and novel approach to solving problems associated with the Tor network, hopefully inspiring even more creative improvements to one of the most useful anonymity tools available.


CoinBuzz provides news and analysis on Bitcoin and other digital currencies. Founded in 2014, the site has quickly become a leading source of information on digital currency technologies, businesses, markets, and regulation.

Leave a Reply

Be the First to Comment!

Notify of