Proxy Server vs VPN: What’s the Difference

If you’re concerned with your privacy and security on the internet, you may have seen people recommending the use of VPNs or proxies. This guide will walk you through what they both are, how they differ, and what they can protect you from.

Proxy

A proxy is a remote gateway, if you configure your device to use one, your network traffic will be sent through the proxy server. As a remote gateway, the proxy server acts similarly to your router or local gateway would normally.

Tip: “Gateway” is the term for a device, that your device can use to access other networks. Your local gateway is your router, which can be used to access the internet. A proxy server is a remote gateway, that also provides you with access to the internet.

Any traffic you send through a proxy is “encapsulated” in the proxy’s protocol. When the traffic reaches the proxy server, the encapsulated data is extracted and transmitted on to the intended recipient. The process is reversed for the response to your request.

Tip: “Encapsulation” is the process of wrapping something in a container. In this case, your web requests are wrapped in a request to the proxy server. The proxy server knows to extract and send the encapsulated web request.

Changing the source IP address makes it appear as if your traffic was originally sent by the proxy server, which hides your IP address from the final recipient, it also makes it appear as if you were located where the proxy server is. Spoofing your location like this is a useful part of a proxy that can be used to bypass location-based restrictions on websites that implement them.

VPN

A VPN is similar to a proxy in how it works, it too encapsulates your data and changes your IP address and apparent location. However, before any data is encapsulated, it is also encrypted. This encryption provides you with a secure tunnel between your device and the VPN server.

Tip: Encryption scrambles data through an encryption cipher. You can give the encrypted data to anyone, the only way it can be decrypted and read is if they have the decryption key. This allows you to securely transmit data in confidence that only you and the intended recipient can understand the message, as you are the only ones with the decryption key. To anyone without the encryption key, the encrypted data looks as if it were random, meaningless noise.

No-one else can read any of the data that is being encrypted and sent to the VPN server. This stops your ISP from being able to analyse your web browsing history, and either selling the data to advertising agencies or handing it over to government agencies when requested.

Encryption also prevents hackers from being able to access any of your browsing data when you’re using an unsecured Wi-Fi connection, such as a public Wi-Fi hotspot.

VPNs don’t provide end to end encryption, just encryption between you and the VPN server. However, that encryption can be the difference between a password being compromised and being secure. If you connect to an unencrypted HTTP website without using a VPN, a hacker on your network could read all the data you send and receive. If you sign into the website over an unencrypted connection, your password can be read and stolen. If you use an encrypted VPN, all of your data, including your password is encrypted and can only be decrypted at the VPN server. The unencrypted password is still vulnerable between the VPN server and the webserver you’re signing in to. The vast majority of the risk of the password being compromised is in the first step, where the VPN protects you. Proxy servers do not encrypt data and so can’t protect you from this risk.

Conclusions

VPNs are similar in concept to proxies. Both can be used to hide your true IP address from the websites you’re connecting to. Which can make it appear as if you’re in another country, allowing you to bypass location-based access restrictions. The addition of encryption, however, to VPNs adds significant protection against local risks, such as your ISP or an insecure public Wi-Fi hotspot. With only relatively modern computer hardware, the performance impact of the encryption process of a VPN would be unnoticeable compared to the unencrypted proxy.

If both services are available for the same price, a VPN is better value for money as it offers all of the features a proxy can and more. If you just want to bypass a location-based filter and are not concerned about your data privacy, a proxy will be suitable for that task.