So the .onion address is half of the hashed public key? What happens if another public key's hash has the same first half but a separate other half and therefore by chance they have the same domain, how does tor deal with this?

Also, where is tor's distributed hash table stored? Is it downloaded locally or is it connected to on tors nodes? If so isn't the hash table going to be extremely large in size?

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To your first question, if there was a collision then Tor would treat both hidden services as the same, meaning it depends on timing which is available. This is the same behaviour when the hidden services key is shared between two different machines and both set up a hidden service.

Second question, the hash table is stored at the relays and the information is spread out over all relays with the HSDir flag. No client fetches them all. So yes, the dataset is large, but it's manageable.

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