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I do know how Tor sends data to the destination server, but how does it know how to send it back to my computer when the project claims it does not keep any logs of connections.

Furthermore, if you would apply the same concept as sending a packet to a server through Tor, wouldn't the entry node send a plaintext packet back to my computer, thus allowing someone to sniff the data received? If the data received by my computer from the entry node is encrypted, do the entry node uses my Tor client's public key to encrypt it?

Thanks

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Without going into too much detail, the short answer is that while connection information isn't logged to disk (or shouldn't be), each node still keeps track of the connection in-memory while the connection is considered open. This allows it to know that when the server sends packets back to it, it needs to forward them on back to you.

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Tor finds nodes and builds a circuit. I believe your tor client builds a new circuit every 10 minutes. Knowing this it's pretty pointless for Tor nodes to track connection information.

Tor only encrypts traffic between the non-exit nodes in a circuit. The exit node, i.e. the final node in the circuit, decrypts the traffic and sends it to the destination. This final node can sniff your traffic and use such information against you, unless you use HTTPS.

While Tor can anonymize the transport of your traffic, it does nothing for the content of your traffic. That's your responsibility.

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