What’s the Difference Between VPN and Proxy?

If you came here, it is probably because you already know the essential benefit of using either a VPN or Proxy. And that is Internet Privacy.

Both a VPN and a Proxy hide your IP address and any activity that is associated with it. But they do it differently. Unfortunately, people talk about them interchangeably, as if they were the same thing. But VPNs and Proxies are different breeds. Both use different technologies and serve different purposes.

In this VPNs vs. Proxy guide, we’ll not discuss what is better than the other. Both tools are fantastic tools for their own use case. We’ll go through their definitions, similarities, differences, and best use cases.

 VPN vs Proxy: Do they have something in common?

VPNs and proxies are entirely different technologies.

But they do have something in common: they offer online privacy. Both VPN and Proxy do the following: A client uses its own information to connect to a server deployed anywhere in the world. This server masks the source IP with its own information (IP) to connect somewhere on the Internet. But again, they do it differently.

1. VPN

Virtual Private Networks (VPN) were initially designed to extend a local network to another geographical location, using the Internet’s risky public network.

Companies with branch offices saw this as an opportunity. Instead of investing in new WAN infrastructure, new wiring, etc., they could leverage the Internet as a means of transport to connect their branch offices. So the VPN was born.

To provide security in these risky networks, VPNs use encryption (SSL/TLS, OpenVPN, IKEv2/IPsec, L2TP/IPsec, etc.) to create a kind of virtual tunnel. Encryption starts at the VPN client and ends up at the VPN server. The VPN server un-encrypts the client’s incoming traffic and forwards it to any destination (using its own IP), including internal servers or other websites on the Internet.

2. Proxy

A proxy is a communication gateway— another computer (server) that intercepts communication between source and destination. The Proxy server acts as the intermediary for all (or specific) requests from a client. It works on behalf of the client, masking the request’s real source and using its own information.

Proxies are commonly used to secure external communications within a local network. Additionally, proxy servers may perform other network services aside from security and privacy, such as load balancing.

Public places that offer access to the Internet, like coffee shops, schools, universities, libraries, etc., are very likely connected to the Internet via a Proxy. These places use the proxy to limit access to specific sites on the Internet.

There are many different types of proxies, but here we’ll talk about the most popular:

1. Transparent Proxies: These proxies are usually placed without a user being aware of its existence. These proxies pass along all information from the source to the destination, except for the IP.
2. Reverse Proxy. Takes requests coming from external networks (Internet) and forwards them to an internal network. A reverse proxy is used to protect web servers from external networks.
3. HTTP Proxies: A type of transparent proxy that uses proxy IP’s but processes all HTTP requests. This proxy is used to block, limit, (or circumvent) website access.
4. SOCKS Proxies: These types of proxies can establish connections via TCP or UDP. That means they can forward requests from almost any kind of application.
5. Rotating IPv6 Proxy: A rotating IPv6 proxy has thousands of available IPs in its pool. It takes an address and assigns it for every new connection. With this type of proxy, you can send thousands of requests (with a script) to a website and get response from thousands of different IPs. Rotating proxies are frequently used to web scraping, market research, and SEO auditing.

What are the VPNs and Proxies Differences?

If you noticed from the previous section, VPNs and Proxies are entirely different technologies. But behind these differences, both are designed to protect your Internet privacy.

Their differences?

1. VPNs use Encryption

VPNs create an end-to-end encrypted tunnel from the source (your computer) to the destination (the VPN server). That means anything in between, including your local network, ISPs, government routers, etc., will be blind to your traffic.

Proxies do not use any encryption to hide traffic from source as a VPN does. A proxy located on a local network provides the right level of privacy. But proxies are not end-to-end, so if you connect to a remote proxy located across the world, your traffic is unmasked from source to proxy.

2. Proxy Servers Are Faster

When you use a VPN or Proxy to connect somewhere else, a proxy can be so much faster. This is because proxies do not need to encrypt traffic. Proxies are sometimes preferred for applications where speed and anonymity must be well balanced.

3. VPNs and Proxies Work at Different Layers

VPNs encrypt traffic right from your computer’s IP layer. So that means your entire computer gets a new IP identity. Proxies, on the other hand, work at the application layer. They only forward traffic for a specific application, your browser, your torrent client, streaming media, etc.  Proxies allow more flexibility, as you can include anonymity on a per-application basis.

4. Proxy act as Gateway

Since proxies act AS Internet gateways, they can be configured to block or limit access to certain sites. Although a VPN server could also be configured ON an Internet gateway, the approach is different. Proxies can be easier to deploy and configure on a larger scale. IPv6 Proxies, for example can be very useful for things like web scraping, market research, and SEO optimization.

Additionally, proxies can lower traffic by caching (buffering) specific sites or controlling how your local users access the Internet.

Final Words

If you are looking for online privacy, both VPNs and Proxies hide your IP address.

VPNs use encryption, so the level of privacy will be much better than a proxy. Proxies also hide your IP but only using a server’s IP address, without encryption.

So when to use a VPN and when to use a Proxy?

For a company, use a VPN to extend private networks. A VPN allows mobile and remote workers to connect to a companies’ internal resources securely. A single user might use a VPN to browse the Internet with full anonymity, especially when connected to public networks like coffee shops.