What’s the Difference and Which Is Better?

VPN icon and servers dotted across the world

The internet is supposed to be about freedom, but government agencies, internet service providers, and malicious entities constantly monitor these data highways.

Browsing privately on the internet is always a challenge, but with technologies like decentralized VPNs and Tor, users can protect the data they transmit online. So, which do you choose when given a choice: a VPN or Tor?

Why Is Anonymity Important Online?

Before getting into decentralized VPNs or Tor, it’s essential to understand why anonymity on the internet is important.

Whenever you search for a website on the internet, your device sends requests to your Internet Service Provider (ISP). On receiving the request, your ISP knows your IP address and the address of the website you are looking for. This enables your ISP to know your location and the details of the site you’re visiting.

The ISP sends your request and IP address to the website you are looking for. Both the site you are visiting and your ISP know about your browsing locations.

But if you are a repeat customer on a particular website, then they will also know your browsing habits and may suggest products based on your prior visits. And by using third-party cookies and other device fingerprinting techniques, the website will have a good idea of what you like, enabling them to send targeted advertisements your way. Or they could block content too.

To solve this problem, we have technologies such as Tor and DVPNs. These intercept traffic when it travels from the ISP to the website, preventing them from learning your browsing location by using your IP address.

So how do VPNs and Tor work?

What Is Tor?

Tor was developed by the US Naval Research Laboratory to help users connect on the internet without being tracked. Here’s how it works.

So: when you search for a website, your browser sends a request to the ISP, which in turn connects you to the site. In the case of Tor, users don’t connect to the website directly. Instead, they connect to Tor, which uses onion routing to give you anonymity. To do this, the user does not use their normal browser; instead, they use Tor, which enables users to connect to the Tor network.

Infographic explaining how the tor network works
Image credits: Wikimedia Commons/Neo139

So how is data transmitted via Tor?

  • Sending data to the ISP: Just like browsing the internet without Tor, all user requests are sent to your ISP. That said, when users are using the Tor network, traffic is not sent directly from the client to the website. Instead, it is sent to the entry node of the Tor network. Due to this, the ISP does not have any information about the final destination of the client’s request. All it knows is that the data is being sent from the client to a Tor entry node.
  • Transmitting information inside Tor: To add an extra layer of anonymity, client requests are not sent from the entry node to the destination website. Instead, the data is sent to another node inside the Tor network known as a middle relay. This relay further transmits the data to the exit relay, which finally sends the data to the website.
  • Sending data to the website: On reaching the exit node, Tor transmits the data to the website the client searched for. On receiving its response, the Tor network sends data back to the client using the same path.

When a user tries to connect to a website via Tor, the ISP has no idea about the final destination of the client. At the same time, the website has no information about the client. Using Tor, then, provides anonymity to users on the internet.

In addition to this, Tor also prevents prying eyes from looking at the data being transmitted on it using several layers of encryption. Each of these layers of encryption is peeled off at the entry, middle, and exit relay, just like peeling the layers of an onion, hence the name onion routing.

What Are the Disadvantages of Using Tor?

Icon of tor browser with purple background

Although using Tor provides users with anonymity and security, it has some caveats too.

  • Speed: As the network bounces all your requests from three different nodes before reaching the destination, using Tor makes your internet connection slower. In fact, according to a ScienceDirect comparison between normal and Tor traffic, the difference in performance can be up to 100 times slower when using the Tor network.
  • Content blocking: Website owners don’t get user information like IP addresses and third-party cookie data when visitors use Tor; therefore, many websites block Tor traffic.
  • Potential vulnerabilities: Although Tor uses several layers of encryption and three different nodes for bouncing traffic, the entry and exit nodes can be compromised, leaking both user data and location.

What Are Decentralized VPNs?

Before getting into decentralized VPNs (DVPNs), it’s important to understand VPNs and how they work. Put simply, a VPN is a network of servers that collect your internet traffic, encrypt it, and send it to a website without giving away your privacy. That said, the problem with VPNs is that private entities own them, and when you use a VPN, you start trusting a third party to route all your internet traffic.

When you use a VPN, your data can be compromised at two points: the ISP and the VPN provider. To solve this problem, we have decentralized VPNs, a technology that tries to solve the problems faced by VPNs using blockchain technologies.

A decentralized VPN is a VPN provider that is not owned by a centralized entity. Instead, the services on a DVPN are provided by peers on the internet.

In the case of a DVPN, your traffic is not routed from a server farm owned by a VPN provider. Instead, your traffic is routed using public devices connected to the DVPN network through a decentralized application. These devices are a set of computers connected to the decentralized network and which give up a part of their internet bandwidth in exchange for a cryptographic token generated by the network. Due to this incentivized nature of the VPN, decentralized VPNs often offer better browsing speeds when compared to Tor.

So just like Tor, a DVPN is a network of computers connected to one another, which collect your internet traffic and send it to a website without giving away your personal information. That said, when compared to Tor, a DVPN uses blockchain technologies to create a network rather than using onion routing.

All the nodes on a DVPN can be rewarded for the services they provide without the need of a centralized entity. The nodes on a DVPN do not run voluntarily and are paid for the network bandwidth they provide.

In addition to this, when using Tor, users have no control over the exit node from where the traffic will go to the website, so it often cannot be used to access country-specific content; that said, it can bypass content blocks placed by government agencies. DVPNs, on the contrary, can be used to access country-specific content on streaming services, as users can select the country they want to route the traffic from.

Comparing Decentralized VPNs and Tor

Now that we have an understanding of how both Tor and decentralized VPNs work, we can compare them side by side.

Comparison metric



Working methodology

The Tor network is created by a set of volunteer nodes that are connected to one another using onion protocols.

A decentralized VPN is a network of computers connected using blockchain technology.


Tor can be used for free; all users need is a browser that supports Tor traffic.

A DVPN in most cases is a paid service, and users need to pay for the bandwidth they use


Due to the use of a three-hop mechanism, browsing the internet using Tor can be slow.

Using DVPNs provides a faster browsing experience when compared to Tor.

Privacy and anonymity

Tor employs multiple layers of encryption, and the three-step traffic routing offers the best anonymity on the internet.

Although most DVPNs offer open-source encryption, most services don’t offer three-hop routing. The traffic routed using a DVPN can be traced back to the client in some cases.

Unblocking streaming content

Using Tor for streaming services is not advised, as most websites block its traffic.

DVPNs can be used to unblock country-specific streaming content.

Which One Should You Use: Tor or a DVPN?

If you are looking for privacy and anonymity online, Tor is the way to go. Not only does it offer multiple layers of data encryption, but its three-hop onion routing provides a high degree of anonymity on the internet.

That said, if you are looking to unblock streaming content or visit blocked websites in your region without losing a chuck of your network speed or trusting a VPN provider, you are better off trying a decentralized VPN

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