Tor routes traffic through several volunteer relays to hide where it comes from. The exit node is the last relay: its IP address is what websites see.
The Tor Project publishes the list of current exit nodes, so Tor traffic is easy to recognise. Veqen refreshes the list hourly and flags exits with tor_exit_node (impact 85).
Should you block Tor?
Tor protects journalists, activists and privacy-minded users, so many sites allow it for reading. For signups, trials and payments, Tor traffic is heavily skewed toward abuse, and most businesses block it or require extra verification.