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How can I be firewalled?
BitTorrent says I'm uploading.

Being firewalled doesn't mean you can't send out data; it means other peers can't initiate connections to you.  If you initiate the connection, then that's fine; but if the other peer is firewalled as well, it means you two can't connect.

Why does this make a difference?

If you're firewalled, it means the peers you are connected to are bearing a heavier load than if you were not firewalled, and your download performance will suffer.

The graph on the right represents a torrent with 12 peers, 6 firewalled (red)  and 6 with open ports (blue).  The blue peers each have connections to 11 others, and those others are dividing their uploads among an average of about 8 other peers.  The red peers each have connections to 6 others, and those others are dividing their uploads among 11 peers each.

This means that, in a swarm with equal numbers of open and firewalled peers, that peers with open ports receive 2.4 times as much attention as those whose ports are blocked.

Unfortunately, there are a lot of firewalled peers out there, and your swarm may look more like this one...  In this swarm, with ten firewalled peers and only four with open ports, the peers with open ports get 7 times as much attention.

Isn't having open ports bad?

Well, you shouldn't leave your computer without some form of security, especially if you're running Windows.  But there's a difference between leaving your NetBIOS port 139 exposed to the world (equivalent to having a nice big doggy door and no dog in a bad neighborhood) and opening specific ports for particular purposes.

In the case of BitTornado, because it runs under a bytecode-interpreted engine, it is unlikely an attacker would be able to actually take over your machine.  DoS-type exploits (which may cause BitTornado to cease operation or crash) are potentially possible, but the author  takes some pains to try and ensure that doesn't happen.

And so, the moral of the story is simple:  Open your ports!