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This is a really exciting update.

https://blog.torproject.org/blog/whats-new-tor-0298

According to the tor devs and the image in the article "Service side loses anonymity". But is this entirely true? The connection is still encrypted end-to-end and there are no tor exits in use.

How is the tor network openly observed by devs and/or authorities? Can someone explain how the server "loses anonymity"?

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The client picks the rendezvous point, normally the onion service builds a full circuit before connecting to the rendezvous point to talk to the client, thus anonymizing it's location.

If a client setup their own Tor relay and then asked the onion service to connect to that relay as the rendezvous point, the onion service would connect directly to it. The client could then discover where the onion service was connecting to their relay from and thus where it actually resided on the internet.

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