What is the working principle of tip jets?
Tip jets spin the rotor by blowing out compressed air. It's the same principle as a jet engine or a jet-ski impeller, just that the exhaust is pushed out through the rotors. Some designs even had jet engines on the rotor tips! The primary advantage of the design are that there is no torque created, so no need for anti-torque rotors or thrusters, the tip jets also increase the rotor's moment arm and mass, making autorotation safer in some cases, although the drag from the tip jets often slowed the rotors down in many cases. Some say it is easier to learn to fly and safer to fly a tip jet design as there's no torque. 

There are very few systems which use tip rotors, the main disadvantages would seem to be a lack of efficiency and drag from the tip jets. The rotor design is complex as high-pressure air must be carried through them, causing many design and materials challenges. Also, lack of a tail rotor means there's no way to pivot in hover unless unless you put some sort of tail thruster on.