TOR: Can exit nodes eavesdrop on communications?

[arshad]

Yes, the guy running the exit node can read the bytes that come in and
out there. Tor anonymizes the origin of your traffic, and it makes sure
to encrypt everything inside the Tor network, but it does not magically
encrypt all traffic throughout the Internet. 
This is why you should always use end-to-end encryption such as SSL for
sensitive Internet connections. (The corollary to this answer is that if
you are worried about somebody intercepting your traffic and you're
*not* using end-to-end encryption at the application layer, then
something has already gone wrong and you shouldn't be thinking that Tor
is the problem.) 
Tor does provide a partial solution in a very specific situation,
though. When you make a connection to a destination that also runs a Tor
relay, Tor will automatically extend your circuit so you exit from that
circuit. So for example if Indymedia ran a Tor relay on the same IP
address as their website, people using Tor to get to the Indymedia
website would automatically exit from their Tor relay, thus getting
*better* encryption and authentication properties than just browsing
there the normal way. 
We'd like to make it still work even if the service is nearby the Tor
relay but not on the same IP address. But there are a variety of
technical problems we need to overcome first (the main one being "how
does the Tor client learn which relays are associated with which
websites in a decentralized yet non-gamable way?").

https://wiki.torproject.org/noreply/TheOnionRouter/TorFAQ#ExitEavesdroppers

so hows this going to effect the users? i mean the exit node dont really
know who is the first node (original user) right?

thank you for your time.
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