Transactions over Tor or I2P in Monero work by encrypting and routing the transactions through the network of nodes in the Tor or I2P network. This helps to obscure the origin and destination of the transaction, making it more difficult for third parties to track the user’s activity on the Monero network.

When a user wants to send a transaction, their Monero client software establishes a connection to the Monero network via a Tor or I2P node. This node acts as a relay, forwarding the transaction to other nodes in the network. The transaction is encrypted end-to-end, which means that only the sender and the recipient can access the information contained in the transaction.

When a node receives a transaction, it first checks to see if the transaction is valid. If it is, the node will then forward the transaction to other nodes in the network. Once a transaction has been added to a block and confirmed by the network, it becomes part of the Monero blockchain.

Transactions over Tor or I2P in Monero also utilize privacy-enhancing techniques, such as ring signatures, stealth addresses, and confidential transactions, to keep the identity of the person sending the transaction private. Ring signatures allow a group of users to sign a message, while keeping the identity of the actual signer secret. Stealth addresses are one-time use addresses that are linked to a user’s public address, but do not reveal the public address itself. Confidential transactions are a way of obscuring the amounts being transferred in a transaction.

In summary, transactions over Tor or I2P in Monero work by encrypting and routing the transactions through the network of nodes in the Tor or I2P network, and by utilizing privacy-enhancing techniques to keep the identity of the user private.