Reforming Tor Funding With Cryptocoins

The Torgate controversy has sputtered along these last few months, running a distant second to the profoundly annoying GamerGate. The only legitimate complaint anyone seems to have about the Tor development team is the fact that their funding is largely government based, and given that Tor is open source and decentralized it meets the NSA’s standard for being a ‘catastrophic’ surveillance problem. This funding issue isn’t wholly synthetic; it’s just been dramatized all out of proportion to the actual problem.

Unlike the gender-based social issues behind GamerGate, the perceived problem with Tor is one of technology and the need for a revenue model. Proceeding in a manner similar to Zero Customer Knowledge VPNs, a paper entitled Proof-of-Work as Anonymous Micropayment: Rewarding a Tor Relay offers some fresh thinking on funding operations, which is a step in the right direction.

Rewarding Relays

The premise behind the paper is that a Tor client will include some sort of mining process and that the relays they use are running mining pools.

In this paper we propose a new micropayments scheme which can be used to reward Tor relay operators. Tor clients do not pay Tor relays with electronic cash directly but submit proof of work shares which the relays can resubmit to a crypto-currency mining pool. Relays credit users who submit shares with tickets that can later be used to purchase improved service. Both shares and tickets when sent over Tor circuits are anonymous. The analysis of the crypto-currencies market prices shows that the proposed scheme can compensate significant part of Tor relay operator’s expenses.

Schemes like this have been around since the very beginning, appearing in the original Tor paper presented by Roger Dingledine and others at the 13th USENIX Security Symposium in 2004. The Tor Incentives post covers half a dozen ways to compensate operators, but all of them have misfeatures such as a central bank creating coupons, the potential for timing based de-anonymization or other vulnerabilities to a large scale passive observer.

Design Goals

The paper specifies five design goals:

  • Do not degrade anonymity provided by Tor
  • No direct payment in either fiat or crypto-currencies
  • No reliance on secure measurement of bandwidth use
  • No central bank issuing an internal use currency
  • Basic users participate without needing to provide a relay

These interlocking requirements are what have kept the earlier efforts as purely theoretical, rather than running code. Maintaining an anonymous network overlay is hard enough without adding the hazard of use based transactions to the mix.

What About Development?

The paper is missing two things that would provide a complete solution to the funding concerns of the Tor development team.

First, the paper treats the existing mining pools as black boxes, not subject to upgrade, rather than looking ahead to Ethereum’s Brave New World. There are provisions in the paper for dealing with the potential to trace users via the Bitcoin blockchain, a privacy issue which Ethereum would resolve. When the thinking in the paper is updated to integrate the new capabilities of next generation blockchains, some of the current hazards will be eliminated, which would provide for broader, faster uptake.

Second, there needs to be a central collection point for funds meant for the development team. Right now relays are run on a purely volunteer basis. When operators can recoup costs by using this mining pool approach, they should be able to route a portion of those funds to the developers. This user-centric ‘taxing’ of operations will place control of the overall direction of development firmly in their hands, rather than those of the government.

Images from Shutterstock.

Last modified: June 10, 2020 3:25 PM UTC

January 12, 2015 5:07 PM UTC
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Neal Rauhauser @RealityForger

Cryptocurrencies, cipherspace, and contagions, both of markets and society, are what capture my attention.