Downloading files online is more-or-less a worldwide pastime. We enjoy our content and media, and we like the ability to download these files on our own timetable and at our own discretion. The problem, however, is that a lot of the files we like to download aren't necessarily licensed to be shared or downloaded online through the channels we use to download them. This puts us, as file downloaders, at odds with some corporations, some governments, and sometimes even our own ISPs, which can be problematic to say the least.
As two of the most popular file-downloading options, torrents and direct-file downloads each have their own sets of pros and cons, but here we'll attempt to specifically compare the privacy issues surrounding each of these file download options.
Torrent downloads and privacy
Unless you're using a private tracker to download torrents, which comparatively few torrent downloaders do, general torrent downloads are a privacy nightmare. That's not to say that private trackers offer complete privacy in any way, only that they can provide somewhat-better protection against rogue snooping. In either case, it's the way that torrents work that make them so dangerous for your online download privacy.
In order to download a file through a torrent, you need to connect with other people who have parts of that file on their computer. In order for this to happen, your IP address needs to be visible to the other file-sharing parties, which is why torrents are notoriously dangerous for online privacy. In essence, when you download a file through torrents, you're broadcasting your IP address to each and every connected peer as well as having to contend with your ISP potentially monitoring bittorrent activity. Your IP address, if you didn't know, ultimately can be used to identify you through legal and less-than-legal channels, and that's how anti-filesharing organizations track people down to sue them for copyright infringement, for instance.
There are ways that you can hide your IP address, such as through a torrent-friendly proxy / VPN service, though any VPN or proxy solution will likely need to be a paid service as most free VPN services disallow torrent downloads, and even many paid VPN / proxy solutions don't allow bittorrent downloads. There are other ways to hide your online identity while downloading files, but people who know about them wouldn't need to be reading this download option comparison guide.
Direct (HTTP, FTP) file downloads and privacy
In contrast to torrents, where there are potentially hundreds or even thousands of unknown parties who can see your download activity alongside your ISP, with direct-file downloads, there are only two parties who can see what you download: your ISP and the file-download service you use to obtain the media or content that you're downloading. On the surface, it's a true no-brainer when it comes to which download option offers better privacy: direct-file download services, which are more-commonly referred to as cyberlockers. However, just because there are less parties privy to your download history, that doesn't inherently mean that direct-file-download services are 100% safe or anonymous.
Take, for instance, the still-ongoing hotfile debacle. Hotfile, at one time, was one of the most popular file storage / sharing / downloading services online. As it sits now, Hotfile has been ordered to hand over records of all files uploaded to their servers along with the IP addresses of the uploaders and downloaders. While this is an extreme example of an extreme case, the fact remains that your direct-file download activity could eventually be discovered through legal proceedings in the event that a cyberlocker is subpoenaed by a governing agency.
People who choose to opt for direct-file downloads versus using torrents can improve their privacy fairly easily, though. For instance, you are much-more likely to be able to use free VPN services to download files directly than with torrent downloads. Though, free VPNs are well-known for providing slow download speeds. You can, however, enjoy full-speed downloads from popular filehosters (such as megaupload, fileserve, filesonic and so forth) if you use an international filehoster where compelling the file-sharing service to disclose records would be difficult or impossible while having much-better privacy when downloading files online.
Better privacy: direct downloads or torrents?
Overall, direct-file downloads offer much more privacy than torrents do for the average file downloader. While there could potentially be some complications by using US-based filehosters like Fileserve and Megaupload, you can alleviate most of those concerns by using a multihoster like Zevera where you can still benefit from accessing download links from these services, but have the assurance that your download activity is stored on a server that isn't based in the United States.