VPN = Virtual Private Network TOR = The Onion Network
VPN is a generic term for any point to point “secure” connection over what otherwise would be a public network.
TOR is a network of routers and relays that is an overlay to the internet which provides an obfuscation of your point to point connections.
What most people these days think of when they mention VPN are “anonymity services” provided by a VPN hosting service. You connect, via some secure protocol to the VPN service’s gateway, and your traffic is relayed to wherever you really wanted to go - in this way, anyone monitoring your traffic has a harder time seeing where you ended up.
In this way, it serves a similar function to TOR, but the mechanism is a bit different. TOR bounces your connection across many many many proxy & relay connections between you and where you wanted to end up. It also doesn’t index its relays in a public DNS, so it is less obvious where and who is operating the relays.
None of these are foolproof - but they are both meant to make it more difficult to observe your internet activity. Just for completeness - the other common use for VPNs is to connect corporate users to the enterprise network via the internet. In this case, the enterprise hosts their own VPN gateway and uses the service to bridge users onto their private network services. This is not really about anonymity, but about securing the traffic to & from the user devices and the companies network platforms.
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