Monero, like many privacy-focused cryptocurrencies, utilizes the Tor network to increase the privacy of its users. The Tor network is a network of servers that bounces communications around the world to obscure the origin and destination of the traffic.

In the case of Monero, when a user wants to send a transaction, their client software will establish a connection to the Monero network via a Tor node. This helps to hide the user’s IP address and location, making it more difficult for third parties to track their activity on the network. Additionally, Monero transactions are encrypted end-to-end, adding another layer of protection to the user’s privacy.

When a transaction is broadcast to the network, it is propagated from the originating node to other nodes in the network. These nodes then validate the transaction and add it to their copy of the Monero blockchain. 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 are recorded on the blockchain in a way that ensures that the identity of the person sending the transaction remains private. This is achieved by using several privacy-enhancing techniques, including ring signatures, stealth addresses, and confidential transactions.

Ring signatures are a type of digital signature that allows a group of users to sign a message, while keeping the identity of the actual signer secret. In the context of Monero, this means that when a transaction is signed, it is not possible to determine the identity of the person who signed the transaction. Instead, it is only possible to determine that one of a group of users signed the transaction.

Stealth addresses are a way of creating one-time use addresses that are linked to a user’s public address, but do not reveal the public address itself. When a user wants to receive a transaction, they provide the sender with a stealth address. The sender then sends the transaction to the stealth address, which is a one-time use address that is linked to the user’s public address. This makes it more difficult for third parties to track the user’s activity on the network, as the stealth address can only be used for a single transaction.

Confidential transactions are a way of obscuring the amounts being transferred in a transaction. This is achieved by encrypting the amounts being transferred, making it more difficult for third parties to determine the amounts being sent and received in a transaction.