Tor (The Onion Router) is an onion routed distributed anonymous network with a cooperatively developed freeware (Windows, Mac, GNU/Linux) software suite that enables anonymous use of the internet. It has its origins as a third-generation onion routing project of the U.S. Naval Research Laboratory, developed for the US Navy, but it is now used for a wide variety of purposes by normal people, the military, journalists, law enforcement officers, activists, drug dealers, pedophiles and many others. Tor users configure their internet browser, messaging software or similar to communicate through the Tor executable (or simply download and run the Tor browser bundle), and then while the program is running their IP address and geographical location will appear to the internet to be that of the latest node in the randomly selected Tor network path.
The free anonymity afforded by Tor is however provided with a downside — the general transfer speed can be low and ping will be high. It is not recommended to run Tor all the time for all of your internet needs. Nevertheless, it is easy to adapt to Tor especially for text-based usage such as anonymizing your IRC, email and messenger traffic.
 How it works
A simple way to think of Tor is as a proxy chain, except better. All data transmitted over the Tor network is randomly routed through the many independent volunteer Tor relay nodes or routers, where each node removes a layer of encryption to uncover routing instructions before passing it to the next node where this is repeated. This prevents these intermediary nodes from knowing the origin, destination, and contents of the data. Tor specifies that at the bare minimum, data must go through at least two middle relays + the exit relay that delivers the communication or request to the final destination. It should be noted that some of the Tor relay operators are undoubtedly intelligence, FBI and NSA operations, but their efforts are more of a research type as there is not much they can do without running most of the relay nodes.
 Keeping Tor anonymous: potential pitfalls
Tor is very robust, even against traffic analysis, but it is not magic. Be aware of the following potential pitfalls that could compromise your Tor use.
 Browser plugin exploits
 Exit relay sniffing
While your IP is hidden and your data going through the Tor relay nodes is encrypted, the data at the point of the exit relay isn't necessarily secure. This is the node that functions as the link between the Tor onion network and whatever you are connecting to and unless you use HTTPS or other encryption, its operator could read your data. Take for instance the case of Dan Egerstad, a Swedish security researcher who in 2007 ran five Tor exit nodes for exactly this purpose. He ended up sniffing no less than 1000 e-mail credentials — server IP addresses, e-mail accounts and their passwords — for embassies and government ministries around the globe (oh, and as thanks for revealing lax government security he got arrested). So remember to use HTTPS whenever possible, especially when transmitting sensitive data like passwords. The Tor browser bundle comes with the HTTPS Everywhere plugin to help out in that regard.
 End-to-end timing
If someone watches the traffic coming out of your computer and also the traffic arriving at your chosen destination, they can use statistical analysis to discover that they are part of the same circuit. This one is less likely but should nevertheless be included as a possibility.
- https://www.torproject.org/ - The official Tor project web site.
- https://www.eff.org/torchallenge/what-is-tor/ - EFF's guide to Tor.
- http://www.smh.com.au/news/security/the-hack-of-the-year/2007/11/12/1194766589522.html?page=fullpage#contentSwap1- Dan Egerstad's embassy sniffing.