relation or function?

x^2 = 1 + y^2

This is a function because relations cannot be an equation right?

Your equation is NOT a function.

If you rearrange it to read : x^2 - y^2 = 1
you should recognize that it is a hyperbola.

Where did you get the idea a relation cannot be an equation?
All relations are equations.
All functions are relations, but only some relations are functions.

The simplest way to determine if a relation is a function is by means of the "vertical line test"
Visualize a vertical line scanning your graph from left to right. If the line cuts your graph in 2 or more points for a given x value, then it is NOT a function.