The Tor hidden service protocol by itself has no built-in authentication mechanism for incoming connections but it can guarantee that when you initiate an outgoing connection to a given. TorChat buddies authenticate themselves by proving that they are reachable though their. It effectively allows true hidden peer-to-peer networks, there are just not many softwares that make any use of its peer-to-peer capability, most use it more in a traditional client-server manner, TorChat is one of the few (and at the moment I don’t know of any other). This less known Tor mode is called Tor hidden services, you can read more about it on the above link. There are no exit nodes involved in this mode, at no point other than your and your buddies own computer will the traffic ever leave the Tor network. This means all TorChat traffic is end2end encrypted. Upon connection another layer of encryption is established reaching through from one client to the other, building one uninterrupted encrypted tunnel through all 6 nodes between the two end points. Both clients build a normal 3 node circuit from each end to some random tor node in the middle to “meet” there and connect their circuits with each other.

However, there exists another and less commonly known mode of operation in which two Tor clients can initiate a fully encrypted peer-to-peer connection between each other that will not leave the Tor network at any point! This is what TorChat is using. This is the origin of the above mentioned “Tor provides no encryption” and it is undoubtedly true for this most widely known and practiced application of Tor and users should understand it. The most commonly known usage of Tor is to use it as an anonymizer for traffic between the anonymous user and a publicly available service in the Internet and while the traffic will travel encrypted through the Tor network it MUST at some point leave the Tor network and enter the unencrypted internet to reach its final destination. Whenever I mention Tor and encryption in the same sentence the immediate reflex response of many people is: “But Tor provides no encryption!” This statement is true for most applications but not for all. There are some misunderstandings floating around regarding Tor and encryption. Encryption TorChatĪll TorChat traffic is encrypted end-to-end. You can binary compare the tor.exe with the official one to verify this or replace it with your own version of tor.exe if you like.

The Tor binary which is bundled with TorChat is taken from the official Tor-0.2.2.34 installer. General information about Tor * official site of the Tor project * Tor Hidden Services * Tor at Wikipedia

Torchat howto