Users of BitTorrent and other file-sharing networks are increasingly seeking solutions to hide their identities from the outside world. With pressure from anti-piracy outfits mounting on ISPs to police their networks and warn those who share copyrighted content, many file-sharers have decided to negate this by going anonymous.

The UK government has high hopes for the piracy warnings Internet providers will be required to send to copyright infringing customers. The warnings are designed to scare users away from illicit file-sharing, but when we asked our readers what action they would take upon receiving a warning letter from their ISP, many were unmovable. A massive 41% indicated that they would take steps to conceal their identity, while only 7% of our readers said they would obey the warning and stop sharing.

The results of the survey clearly showed that avid file-sharers would rather hide their identities than stop downloading. And indeed, more and more BitTorrent users are seeking ways to protect their privacy online, rendering all the newly proposed anti-piracy laws useless.

TorrentPrivacy and BTGuard are just two examples of services launched in the past year, targeted at concerned BitTorrent users. The goal of these and other anonymity applications is clear; hide the IP-address of the file-sharer so he can’t be tracked down while swapping files.

Currently in beta, The Pirate Bay’s Ipredator uses the same tech platform as the VPN service Relakks. For a few dollars a month it routes all your traffic through its servers, hiding your IP address. Ipredator is currently limited to 3000 users but according to the Pirate Bay team there are another 180,000 users on the waiting list, eager to join.

Running a VPN network for hundreds of thousands of hungry BitTorrent users will prove to be quite a challenge. The infrastructure and bandwidth required by a service targeted at file-sharers is significant, not to mention costly. This undoubtedly leads to problems.

The aforementioned Relakks saw its subscriptions double in just a month when the controversial Ipred law came into effect in Sweden this April. This surge in subscriptions led to to major problems with support and updates according to Relakks’s chairman Jan Erik Fiske.

Unlike more traditional VPN services, BitBlinder recently introduced a free solution. Instead of routing the traffic through a central server BitBlinder passes it on through multiple peers. Each peer in the chain only knows the IP address of the next person in the chain, not the original requester/sender.

A few days after its launch BitBlinder had signed up more than 30,000 new users. Right now registrations are temporarily closed to make sure everything runs smoothly for those already using the service, and while they iron out bugs. “We want to make sure it works, and is secure for everyone,” Josh Albrecht, one of the creators of BitBlinder told TorrentFreak.

Because of the increasing interest in anonymity, the Swedish ISP Alltele decided to offer a free service to conceal the IP-addresses of its customers. According to Alltele’s CEO Ola Norberg thousands of users have downloaded the application, which nearly killed the server it was running on.

These examples clearly show that the scare tactics of the entertainment industry are not going to work. There is no doubt that with every new anti-piracy initiative introduced, more and more users will find their way to one of the many anonymizing services out there.

Instead of stopping the pirates in their tracks the entertainment industry has simply inspired a new ‘industry’ worth millions of dollars.