Definition: onion routing

A method for anonymous communications over a wide area network such as the Internet. Onion routing hides the names of the parties that are communicating as well as the data by encrypting the payload in layers, with a different layer for each hop in the route.

Create a Path of Three Routers
Although Tor, the most widely used network of onion routing, is considered decentralized, it does have centralized servers that keep track of all the routers in the network. It is these directory servers that allow the onion routing protocol in the originating computer to create a path by selecting at least three routers (three nodes).

Before the message (data, query, etc.) leaves the user's computer, each router node is encrypted separately creating one layer on top of the other. The encryption keys for each layer are created independently (see Diffie-Hellman).

Unpeel the Onion
As the message moves through the network, each node decrypts its own layer and learns the address of the next hop. The message is said to be "unpeeled" at each layer; hence the onion analogy. See Tor, OnionLand Search Engine, onion domain, anonymous Web surfing and anonymous remailer.

Create the Onion and "Unpeel" It

Each router reveals the IP address of the next hop. Only the first router knows the sender's IP, and routers in the middle only see the address of the previous router and the IP of the next one. They have no way of knowing if the message was coming from the originating node or if the next hop is the final destination.