Given the lax state of data privacy online, the Tor browser felt like the inevitable evolution for internet browsing. Through the onion routing protocol, it finally became possible to use the internet without exposing your IP address, metadata, or personal information. But Tor never became mainstream, it never lived up to its potential, and over the past several years, the number of Tor bridges and relays has stayed basically constant — even as the number of internet users and the amount of data transferred has skyrocketed. This guide looks into a new privacy-focused solution: mixnets powered by Proof of Relay.
What are mixnets?
Promising to deliver on what Tor never could, mixnets are the most academically sound, transport-layer privacy solution. They build on Tor’s onion routing protocol and add packet splitting, mixing, and dynamic routing to create an untraceable messaging layer for any application.
But increasing the privacy offering alone doesn’t solve what held the Tor protocol back. Just as Tor stagnated, mixnets will never reach the mainstream if they rely on altruism.
Why altruism isn’t enough
Tor’s network was run mainly by digital altruists — individuals who ran nodes without expecting returns. Although this felt like a noble way to approach data privacy, it proved to be too idealistic, and as a result, Tor’s growth plateaued.
Running a node is computationally intensive, even more so for mixnets requiring constant encryption, mixing, remixing, and data routing. Individuals need a way to cover these costs for a network to thrive and grow.
How to incentivize mixnets
With the rise of web3, the solution to this problem became apparent: We need to pay node runners for their work, and trustless, decentralized technologies based on blockchain can facilitate this. We have people who want to use mixnets and are willing to pay for the privacy mixnets offer and node runners who need to be paid so mixnets can exist.
We just need a mechanism that connects the two, although this is not as straightforward as it seems. Maintaining decentralization and privacy means any centralized subscription model is out of the question. These incentives need to be passed on to each node runner in a decentralized and anonymous manner, exactly as the data is routed. So why not route the incentives across the relay along with the data?
Here, the person using the mixnet can attach funds along with the data they are transporting, and every node involved in the relay can receive a small amount of money for every packet of data they help anonymize.
Although this is the correct approach, nothing stops any of the node runners in the relay from taking their reward without relaying the data. Here, the anonymity and privacy of a mixnet work against itself: you could just run off with the payment, and no one would be able to trace you or stop you. The key innovation of web3 is trustless technologies: you shouldn’t need to rely on other users’ honesty for the system to work. If we need altruism to ensure data is delivered, we’re back to square one.
Trustless privacy
We can’t rely on people to follow the rules because it’s the right thing to do. We need to make following the rules the rational and profitable thing to do. This is the cornerstone of many crypto-systems and what makes them trustless. Basically, when the most selfish way to behave is also the way the system wants you to behave, we don’t need to rely on anyone being nice.
We need a way to ensure everyone is fairly rewarded, but only after they’ve relayed the data. This mechanism needs to keep everyone honest without explicitly tracking and checking on everyone, or all the privacy work that went into designing the mixnet would be undone.
Proof of Relay
One solution is to make nodes reliant on each other for payment. This is achieved through a simple-to-understand cryptographic technique. When data is sent through the mixnet, a payment is generated for each node in the chain. This is locked with a cryptographic key. If you have the whole key, you can claim your payment. But if any part of it is missing, it’s worthless. These keys are split in half, so you can only claim a payment once you have both halves.
As the data passes along the chain, consecutive pairs of nodes swap key halves with each other. Chāo swaps the first half of his key for the second half of Betty’s. He swaps the first half of Dmytro’s key for the second half of his. He can then claim his payment, but only because the data has successfully hopped from Betty to Chāo to Dmytro.
This forces everyone to play by the rules. If a node is receiving data from you, neither you nor the node can claim any money unless we swap key halves. There’s no benefit to shirking your responsibility, no loophole for stealing money. The selfish thing to do is to cooperate, meaning everyone’s incentives are perfectly aligned.
Proof of Relay facilitates privacy at scale
This simple but extremely powerful innovation unlocks a whole world of possibilities. With Proof of Relay, it is possibly to finally build a fully incentivized private mixnet that can grow to an unlimited scale because we don’t have to rely on finding trustworthy, altruistic people to run it.
Frequently asked questions
How does Proof of Relay ensure privacy and trustworthiness?
What are mixnets?
Who created proof of relay?
Who created Proof of Relay?
About the author
Sebastian Bürgel is the founder of HOPR. Bürgel builds technical solutions that empower the individual. As founder of the private data exchange infrastructure HOPR, he contributes to establishing full stack privacy for the web3. He also co-founded two other technology startups: Validity Labs (blockchain education & services) and Sonect (fintech). Sebastian holds a Ph.D. degree in Microtechnology from the Swiss Federal Institute of Technology, ETH Zurich.
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