Guide: Understanding How to Use Tor

TL;DR Summary:

The Tor Network is about freedom and anonymity online
The 'dark' net is not evil and was never meant to be used for illegal, immoral or other bad purposes
Tor offers more privacy than a VPN
Tor has low bandwidth and speed limitations
There is no need to use the Tor Browser together with a VPN
Don't modify the Tor Browser if you require anonymity
(that includes installing extensions)
Don't sign into identifiable accounts in a Tor Browser session

The goal of the Tor Browser is to provide a private internet browser that's free of surveillance and censorship, aiming for their opposites – anonymity and encryption.

It currently achieves its goals by making the browser fingerprint of every Tor Browser user very generic; making them look the same. This measure helps every user effectively blend in, just like an individual would blend in with a crowd of people that look just like them.

Other than generalizing the fingerprint, the Tor Browser limits some browser functionality and hides system information, including your IP address, by routing your network traffic through multiple encrypted layers, on a public, secure, crowd-built network. Explained in more detail below.

The main difference between the Tor Network and a VPN is this very 'multi-hop' design, which essentially ensures the network is "trustless". This means that no one on the Tor Network is entrusted with the full identifying details of your connection. Therefore, no one can track your connection without significant effort, while you use the Tor Browser and blend in. A VPN, on the other hand, only shifts this trust from your internet service provider (ISP) to said VPN's servers. The VPN can see the full identifying details of your connection, although it may be more trustworthy than the ISP.

Mixing Tor and a VPN

Using the Tor Browser together with a VPN doesn't help you in any meaningful way!

It is a common misconception that combining the Tor Browser with a VPN adds even "more privacy" to your browsing.

Tor does everything a VPN does for you and more, and it does it with more privacy protection measures.

Here's why there is no benefit to use a VPN together with the Tor Browser or Network:

A VPN is more closely linked to your identity than the Tor Browser. A VPN knows the banking information you used to pay for the VPN, the email address linked to your VPN account, access to your real IP address, etc. The Tor Network knows none of that.
The exit node never knows who the traffic is coming from, due to the multi-layer design. Therefore, using a VPN together with Tor in order to "make sure to hide your real IP address from Tor" is useless and redundant. Explained in more detail below.
If you want to hide the fact that you are using Tor from your ISP, you can use Tor Bridges instead of adding a third-party tool, like a VPN.
The Tor Project themselves advise against it.

Signing into accounts via the Tor Browser

Signing into an account that's linked to your real identity while using the Tor Browser effectively negates the entire purpose of blending in. If the website knows your real identity, the Tor Network and Browser will not magically make you anonymous.

Trackers from services that have your real identity will now be better equipped to link your browsing to your identity. You should only sign into anonymous or privacy-respecting accounts with Tor. Hide your IP address with a VPN in accounts that are linked to your real identity.

If you need to use Tor rather than a VPN to hide online activity, don't sign into normal accounts while doing other sensitive browsing.

How Does Tor Work?

Tor bounces your traffic between random volunteered computers on a public-built network (nodes/relays) and no one on the network has all the information on your connection. Your device chooses a path of nodes for each site you visit and shares that path with no one.

The entrance node only knows your IP address but not the website you're visiting nor the data you're sending or receiving.

The exit node only knows the website you're visiting but not your IP address nor the data you're sending or receiving).

None of these nodes know which nodes your browser has for its path.

Your computer gets a list of available nodes (hops). This info stays on your device.

Bob, 2nd and 3rd nodes don't know the source of the traffic. Bob knows the content but not source. 1st node knows the source but not the content.

Each site you visit uses a different path, so they remain separate and untrackable.

Images from Tor Project overview.

Here's a simplified example of how Tor's method would look in physical terms

You ('Alice') want to get a letter to someone in secret. You seal the letter in three magic envelopes that can only be opened by the person who's name is on it. Then you give it to the postman (your ISP) addressed to one person.

You've written on the 1st envelope give to Henry, Henry receives it, opens it and the 2nd envelope only says give to Sally.
Sally receives it and opens and the next envelope says give to James.
James opens his envelope and it reads: "Please get me some information from France, and seal it back in this envelope. Then each person should return the letter to whom sent it to them." (The same operation in reverse.)

So the middle and last person do not know who sent the original letter and the first and middle person do not what the contents of the core envelope were. This is why the system is trustless and safe.

Onion sites are websites designed to work on the Tor Network. With these, content requests of your traffic can't be seen by even the exit node, it's encrypted all the way to the website service. Onion sites can be opened automatically by the browser when available or you can browse them with onion search sites. They are the most private way to browse.

There are more precautions to protect the contents, like a factor of time stamps, that avoid messages being sent to the wrong place. But that's too much to explain in this guide.

There are even Tor operating systems designed to be more anonymous and route all traffic trough TOR. See: Tails and Whonix.
Also, see more of the Tor Project's apps and initiatives here.

Disadvantages of Tor

It is slower than regular internet or a VPN. Especially if your connection already has low bandwidth or the nodes you use are overloaded. It adds a lot of latency to your browsing since the traffic bounces around the world. (Consider running a Tor node to support the project)
It has reduced functionality, especially in 'Safest' security setting. For instance, JavaScript is entirely disabled. Some websites just won't work in this setting.
You can't install extensions or ad blockers or modify it in any way as that makes you stand out from the crowd of other Tor users.
Many websites don't trust Tor traffic since it has been abused by spammers and hackers (this isn't to say you are at greater risk from hackers when on Tor, just that they use it to access the internet and give Tor a bad rep). Some sites will block Tor browsing, some require JavaScript and/or time-wasting CAPTCHAs.
Nothing is untouchable, you can get caught doing illegal things on Tor. If your adversary has enough time and money, they can use time-based attacks to track you on the Tor Network (unless track you down using some other method first). So if your life depends on using a tool like Tor, please read more detailed guides on the Tor Project's website and consider using Tails.

Torrenting via Tor

Don't weigh the Tor Network down with heavy media browsing and torrenting!

Remember, the Tor network is run by volunteers, so torrenting or watching videos in high quality puts a strain on the network, causing other Tor users to experience reduced speed. Therefore, it's best to avoid watching videos, and watching them on lower quality when it's necessary.

https://2019.www.torproject.org/about/overview.html.en

Tor's own animation