Onion routing is the most widely used approach to anonymous communication
online. The idea is that Alice wraps her message to Bob in layers of encryption
to form an “onion,” and routes it through a series of intermediaries. Each
intermediary’s job is to decrypt (“peel”) the onion it receives to obtain
instructions for where to send it next, and what to send. The intuition is
that, by the time it gets to Bob, the onion will have mixed with so many other
onions, that its origin will be hard to trace even for an adversary that
observes the entire network and controls a fraction of the participants,
possibly including Bob.

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In spite of its widespread use in practice, until now no onion routing
protocol was known that simultaneously achieved, in the presence of an active
adversary that observes all network traffic and controls a constant fraction of
the participants, (a) fault-tolerance, where even if a few of the onions are
dropped, the protocol still delivers the rest; (b) reasonable communication and
computational complexity as a function of the security parameter and the number
of participants; and (c) anonymity.

In this paper, we give the first onion routing protocol that meets these
goals: our protocol (a) tolerates a polylogarithmic (in the security parameter)
number of dropped onions and still delivers the rest; (b) requires a
polylogarithmic number of rounds and a polylogarithmic number of onions sent
per participant per round; and (c) achieves anonymity. We also show that to
achieve anonymity in a fault-tolerant fashion via onion routing, this number of
onions and rounds is necessary.

Of independent interest, our analysis introduces two new security properties
of onion routing — mixing and equalizing — and we show that together they
imply anonymity.

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