How do tools like Ultrasurf works?
At a very high level, what concepts / technologies are used by tools like this?
How does it prevent others (employers/ censorship bodies) from seeing end user traffic?
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They use a second computer (proxy), actually many such computers.
Then the browser is instructed not to connect to the real website you want, but to the proxy, sending it the request. The request itself is heavily encrypted so that nobody except the recipients may know its contents.
Imagine you're underage and you still want to get drunk. You give money to a over-age friend to buy alcohol in his name, then get the booze back to you. The bartender sees a guy of twenty-four and has no qualms in giving him alcohol, nor has he any knowledge of who is actually going to drink it.
They use proxying (a proxy is, unsurprisingly, the computer that receives your requests and acts on your behalf), through an encrypted tunnel (or a full virtual private network or VPN, which is actually a more advanced implementation of basically the same concept).
These are actually two questions, because depending on who the "others" are, you might need to hide not only
The encryption takes care of the "what", and the fact that you're only communicating with a proxy, and only the proxy knows who to forward your requests to, takes care of the "who".
But while your employer does no longer see requests for nsfw.com, he now sees encrypted and unreadable requests directed to hidethisfrommyemployer.com. Depending on the employer, this might still be undesirable or have nasty side effects.
In some countries, using encryption to sneak past censorship will actually have the opposite effect, since encrypted communications are usually extremely easy to recognize. Also, the networks used on the other side to supply you with a proxy service can be identified and blocked, so that this strategy no longer works.