Onion networking provides an alternative to traditional IP networking by using self-authenticating onion addresses and circuits through the Tor network. Some key aspects of onion networking include: 1) It establishes circuits between clients and servers to transport TCP connections, similar to how IP uses frames and MAC addresses. 2) Onion addresses resolve to introduction points that introduce circuits to rendezvous points for communication, providing redundancy and avoiding single points of failure. 3) While slower than traditional networking due to additional hops, onion networking provides benefits like built-in anonymity, censorship resistance, and lack of single points of control due to its distributed nature.