It is possible to run Bitcoin as a Tor hidden service, and connect to such services.
The following directions assume you have a Tor proxy running on port 9050. Many distributions default to having a SOCKS proxy listening on port 9050, but others may not. In particular, the Tor Browser Bundle defaults to listening on a random port. See Tor Project FAQ:TBBSocksPort for how to properly configure Tor.
The first step is running Bitcoin behind a Tor proxy. This will already make all outgoing connections be anonymized, but more is possible.
-proxy=ip:port Set the proxy server. If SOCKS5 is selected (default), this proxy server will be used to try to reach .onion addresses as well. -onion=ip:port Set the proxy server to use for tor hidden services. You do not need to set this if it's the same as -proxy. You can use -noonion to explicitly disable access to hidden service. -listen When using -proxy, listening is disabled by default. If you want to run a hidden service (see next section), you'll need to enable it explicitly. -connect=X When behind a Tor proxy, you can specify .onion addresses instead -addnode=X of IP addresses or hostnames in these parameters. It requires -seednode=X SOCKS5. In Tor mode, such addresses can also be exchanged with other P2P nodes.
In a typical situation, this suffices to run behind a Tor proxy:
If you configure your Tor system accordingly, it is possible to make your node also reachable from the Tor network. Add these lines to your /etc/tor/torrc (or equivalent config file):
HiddenServiceDir /var/lib/tor/bitcoin-service/ HiddenServicePort 8333 127.0.0.1:8333 HiddenServicePort 18333 127.0.0.1:18333
The directory can be different of course, but (both) port numbers should be equal to your bitcoind’s P2P listen port (8333 by default).
-externalip=X You can tell bitcoin about its publicly reachable address using this option, and this can be a .onion address. Given the above configuration, you can find your onion address in /var/lib/tor/bitcoin-service/hostname. Onion addresses are given preference for your node to advertize itself with, for connections coming from unroutable addresses (such as 127.0.0.1, where the Tor proxy typically runs). -listen You'll need to enable listening for incoming connections, as this is off by default behind a proxy. -discover When -externalip is specified, no attempt is made to discover local IPv4 or IPv6 addresses. If you want to run a dual stack, reachable from both Tor and IPv4 (or IPv6), you'll need to either pass your other addresses using -externalip, or explicitly enable -discover. Note that both addresses of a dual-stack system may be easily linkable using traffic analysis.
In a typical situation, where you’re only reachable via Tor, this should suffice:
./bitcoind -proxy=127.0.0.1:9050 -externalip=57qr3yd1nyntf5k.onion -listen
(obviously, replace the Onion address with your own). It should be noted that you still listen on all devices and another node could establish a clearnet connection, when knowing your address. To mitigate this, additionally bind the address of your Tor proxy:
./bitcoind ... -bind=127.0.0.1
If you don’t care too much about hiding your node, and want to be reachable on IPv4
as well, use
./bitcoind ... -discover
and open port 8333 on your firewall (or use -upnp).
If you only want to use Tor to reach onion addresses, but not use it as a proxy for normal IPv4/IPv6 communication, use:
./bitcoin -onion=127.0.0.1:9050 -externalip=57qr3yd1nyntf5k.onion -discover
Starting with Tor version 0.2.7.1 it is possible, through Tor’s control socket API, to create and destroy ‘ephemeral’ hidden services programmatically. Bitcoin Core has been updated to make use of this.
This means that if Tor is running (and proper authorization is available), Bitcoin Core automatically creates a hidden service to listen on, without manual configuration. This will positively affect the number of available .onion nodes.
This new feature is enabled by default if Bitcoin Core is listening, and
a connection to Tor can be made. It can be configured with the
-torpassword settings. To show verbose debugging