>I'll add that combining anonymity and performance seems to be one of the hardest security problems to get right with so much left to learn.

A certain penalty in both available bandwidth and latency seems unavoidable in any distributed onion anonymization system, but one practical issue may actually be something that I think doesn't get brought up nearly often enough in this context: a plain and simple lack of raw bandwidth. In other words, more practical anonymity would be yet another emergent benefit/application of near universal FTTH gigabit+ class connections. While some applications can use as much bandwidth and as low latency as it's possible to provide, many popular, commonly used ones on the present Internet instead have a value beyond which there are few further benefits. One of the hungrier applicatinos for example is streaming video, but once someone is stably hitting ~50-100 Mbps they're already at what a full quality Blu-ray would offer, even without H.265, and with H.265 even 4K is going to look pretty great.

So if a given anonymity network had an overall overhead of 90%, or even 95%, well that's certainly significant. But at the same time if someone has 1 Gbps to throw at it, then even 5-10% remaining would still result in more effective bandwidth available then large percentages of the population have raw right now, and more importantly enough for most of the current popular web applications. It would also have additional implications for the health and participation rates of the anonymity network, particular given that fiber links are symmetrical. These networks in general needs significant donations of bandwidth on the part of users to work effectively. When many, if not most users don't have that much available period then that can be tough: for somebody stuck on a 6/1 ADSL link giving up even a few hundred kbps could be painful. Whereas with an abundance, many if not most users would never even notice having 500+ Mbps serving as relay capacity at all times. This would further improve the overall value of the network, encouraging further use, and creating a virtuous circle.

Doing more with less is certainly very important, but no one should lose sight of how much in computer science has come from just plain having more. Anonymity networks would be best if they weren't "anonymity networks" per se, but rather simply "the network", as in what most people could use to accomplish anything on the Internet they'd want to. Ubiquitous encryption has been aided by better coding, but the most significant boost has come from having an abundance of computing resources, to the point where the overhead of encryption simply is irrelevant to the vast majority of users vs the benefits to security. An abundance of (symmetrical) bandwidth could enable a similar leap forward in anonymity online. It's another reason why we should really be pushing hard for major last mile information infrastructure improvements, and it's so unfortunate that the USA in particular has grossly underinvested and allowed companies to set the agenda there (unlike with electricity, phones and roads, which received major national pushes to the ultimate benefit of the whole country).