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The Tor network provides an extra layer of privacy when using Bitcoin. Using Tor has an additional benefit; your node is reachable from the outside. What do we mean by this? Take this example:
You have a mobile wallet. Since you don't have the full Bitcoin blockchain on your mobile, you need to get information about your wallet from an outside source. By doing this, you are disclosing information about yourself. By contrast, if you connect your mobile wallet to your own Bitcoin node, you retain control over this kind of information. The problem is that your node is running at home, so the mobile wallet needs to connect to your home computer. This is tricky because internet service providers (ISPs) can change the IP address of your home every x-number of days. There are ways around this.
For a somewhat more advanced solution, see the chapter VPN via DuckDNS.Another way is Tor. By setting up so called hidden services you can still communicate with your node from the outside.
SSH into your Pi and run the following to install Tor.
sudo apt install tor -y
Proper permissions must be granted to our user named pi.
sudo usermod -a -G debian-tor ubuntu
To make the
usermod take effect, log out by typing "exit" and pressing enter. Don't forget this! Then SSH back into your Pi.
Finally, we can activate and boot Tor.
sudo systemctl enable tor
sudo systemctl start tor
Tor is now installed and running. We will come back to the configuration of Tor several times in this guide, but you will encounter that naturally in other chapters.