Key Takeaways
The Tor Browser is the only way to access onion sites. While it can anonymize your browsing too, it's slower than VPNs, so we don't recommend it unless you need to visit an onion site.
If you've been looking into the different ways to browse anonymously, two terms will come up regularly: VPNs and Tor. However, when you compare these two, you'll quickly see that they have very different use cases.
How VPNs and Tor Work
To figure out when you should use Tor rather than a VPN, let's first go over how they both work. VPNs are privacy tools that allow you to connect to servers owned and operated by your provider. Doing so encrypts your connection in a so-called VPN tunnel and also lets you assume the location of that server.
Spoofing your location in this way gives you greater flexibility when accessing sites all over the web: you can unblock Netflix regions other than your own, circumvent internet censorship imposed by countries like China or Russia, or even just access internet banking while on holiday. It does all this while also securing your connection.
Tor is a little different. Instead of being a standalone tool that encrypts your whole connection, it's a browser that reroutes your traffic. However, it doesn't do this through VPN servers, but instead through what are called nodes. Nodes can be any internet-connected device---laptops, smartphones, even IoT devices qualify---and are points within the network where traffic is routed through.
These nodes are owned and operated by volunteers, who supply use of their devices for free in the cause of internet anonymity. As a result, Tor is completely free to use and thus very popular among people in developing countries that want a way to browse the web anonymously.
If you look at the way Tor and VPNs operate, this is the big difference. VPNs use centralized servers, owned and operated by profit-motivated companies. Tor, on the other hand, is decentralized and not run with profit in mind. Lately, though, there's been a third option gaining traction, decentralized networks that let users pay each other to use nodes; check out how decentralized VPNs work for more on this.
Issues With Tor
Because they work so differently, Tor and VPNs are best used for different things. VPNs are better all-around solutions: they offer blanket protection thanks to their encryption, though you shouldn't blithely assume all is well, either. For true anonymity you need to use VPNs and incognito mode in tandem, at least.
Tor isn't quite as straightforward as it doesn't encrypt your connection. For Tor to be anonymous and secure, it relies on the inability of nodes to see past the ones they're connecting to. For example, if you connect to a node and then to another node, the first node can see where you're connecting from, and the node it's going to. However, anything after that second node is a mystery to it.
As a result, to use Tor effectively, you need to create a daisy chain of nodes, three at minimum, to keep your browsing private. However, all this bouncing around nodes badly slows down your connection, making Tor unattractive for anything that requires high speeds, like downloading large files. VPNs have the same problem, but since you only reroute once, the issue isn't as severe.
However, there is some discussion on how private Tor really is: technically, somebody could track you through the daisy chain (though it's unclear how practical this would be). If privacy is your main concern, a no-log VPN may be a safer bet than using Tor---assuming you're using a trustworthy VPN, that is.
When You Should Use Tor Instead of a VPN
Of course, if Tor is so slow, you may wonder why anybody would use it as a browser. Tor's main attraction, besides it being free, is that it's the only browser that can access onion sites. These are sites that, for whatever reason, want their visitors to be anonymous while browsing.
Other browsers can't do this. VPNs can't either, simply because they aren't browsers. As a result, the main reason to use Tor is to access this so-called dark web (not to be confused with the deep web) where you can find things that are bought and sold under cover of anonymity.
Though Tor undoubtedly has other advantages---the fact that it's free and that it doesn't require faith in a VPN's no-log promises are the big ones---its drawbacks make it difficult to truly recommend. Unless you need to visit the dark web, in most cases a free VPN like ProtonVPN or even PrivadoVPN may be a better bet than using Tor if you want to stay anonymous while browsing.