What's going on?
You got a malware that encrypted all your files. To get them back, you have to pay. This type of malware is called Ransomware (Wikipedia).
What do you mean by encrypted all my files?!
When you caught the ransomware, it took your files one by one and encrypted it with a key. When all your files were encrypted, it probably created a small text file on your desktop with a name along the line of
But if it encrypted all my files, the key must be somewhere!
It totally depends of the ransomware, but probably not. Chances are, it used Assymetric cryptography to encrypt your files. Basically, you have one key to encrypt, and another one to decrypt. Even if you found the key used to encrypt your files, it wouldn't help you to decrypt them. The attackers have the key you want and did not put it in the ransomware; and they want you to pay to get it.
You can still try to search on Google, copy-pasting their message to see if you can find the name of your malware (TeslaCrypt, CryptoLocker, CryptoWall, etc.). You may get more information, and perhaps a solution to recover your file if it was a weak ransomware. However, do NOT download random Ransomware Removal Tools1 and remember that it was probably by downloading some fishy files that you caught the ransomware in the first place.
1 You can trust some websites! For example, Kaspersky provides a free tool to get rid of CoinVault and Bitcryptor.
Why is Tor involved? And Bitcoins?
You can recognize a Tor link with the
.onion at the end.
They use Tor because it makes it harder for law enforcement to find them. It has nothing to do with the Tor project per se. The same goes for Bitcoins: they are harder to track than a bank transfer; like in the movies when the kidnappers ask for cash-only-20-unmarked-bills.
Tor and Bitcoins offer you to improve your privacy/anonymity. Everybody likes more privacy, unfortunately including bad people.
Should I pay? Will they give me my files back?
I would like to say that you should not, but it isn't realistic. This is a decision that you have to make. I would still suggest that you pay only if you have very valuable data2 that you want to get back. You game saves or grocery list are probably not worth to be saved.
Some people says that you are likely to get your files back. Ransomwares work because people pay; and people pay because they think they will get their files back. The fact is: you don't know.
It seems that they also have a great customer service. Link-1 - Link-2
2 What you should consider as valuable data is up to you.
What should I do next ?
Whether or not you got your files back, you should do a clean install: reformat your whole drive and reinstall the OS. Other malwares might have been installed along with the ransomware.
Keep your system and softwares up-to-date, don't visit suspicious websites and make regular backups of your files! (At least the important ones.)
I want to know more about the relation between Tor and ransomwares!
Take a look at Roger Dingledine's answer.