It's a mix network and it hides it from not just your ISP but from peers as well. This is a little simplified, but how you typically get caught torrenting without a VPN is that someone from the movie company tries to connect to peers on a torrent. They then send complaints to whoever provides internet for the IP address that is seen. This is why lists of blocked IP addresses can be used with torrenting. They don't connect to clients who are known to do this. Private trackers work by vetting and keeping out the movie people, which is pretty effective. A VPN obscures this by showing them the IP address of the VPN instead of your own IP address that's linked to your ISP. I2P breaks up your traffic into chunks and sends those chunks through randomized routes of other people using I2P. Those chunks get together again at the other end but to identify the person who sent them would require you to compromise every other person along the route of the chunk. There are some things you can do to analyze the traffic and correlate input to the network with output from the network if you're a nation state level attacker but movie studios don't have that kind of capability. That means that I2P gives you anonymity that you just can't get from a block list, a private tracker, or a VPN. The downside is that it's slow, computationally intensive, and there's a limited selection.