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Developed at the Citizen Lab at the University of Toronto's Munk Centre, Psiphon is essentially a tool that allows users to get around content-blocking systems, such as filters that ban users from gaining access to certain websites. First released in late 2006, the tool was designed with a social or political purpose. It is mainly aimed at users in countries with repressive regimes, where Internet usage is highly regulated.

Early versions of the software worked on a "trusted member" model - essentially, encrypted information is passed between computers run by known and trusted users in small networks. This model reduces the likelihood that a government agent will be able to infiltrate the network and shut it down. The downside, however, is that networks of trusted users tend to stay small.

Psiphon's developers took the software out of the lab in 2008, when they spun it out as a Canadian corporation. In the words of Ron Deibert, vice-president of policy and outreach for Psiphon and director of the Citizen Lab, "We are the first explicitly political company to be spun out of the University of Toronto."

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