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VPN vs. Proxy – The Differences

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Posted October 4, 2018

VPNs and proxy servers seem similar on the surface, and are often confusing to those who aren’t very tech-savvy.  Both route some form of Internet traffic to a separate server or computer, before it goes on to its intended destination.  But, as the saying goes, the devil is in the details.  Proxy servers and VPNs are both useful tools for similar, though different, purposes, and both can be useful for security and anonymity online.  However, they definitely have some different strengths and different uses, and function in somewhat different ways.  We’ll explain more by examining proxies, VPNs, and then comparing and contrasting them below.

VPN - artistic impression. Image credit: kreatikar via Pixabay, CC0 Public Domain

VPN – artistic impression. Image credit: kreatikar via Pixabay, CC0 Public Domain

What is a Proxy?

A proxy server (or just a proxy, for short) acts as the name implies – as a proxy, or a go-between, a middle-man.  In this case, it’s the middle-man between your computer and the ultimate destination of your Internet traffic.  It can either be accessed directly through the web (for browsing), or managed as a stand-alone program or browser extension, which can work for your browsing, and in some cases for Internet services as well (online gaming, torrenting, etc.).  They usually need to be configured or installed for each particular application use – a browser extension won’t do anything for torrenting or online gaming services, for example.

Traffic goes from your system, through various servers and hops, to the proxy server.  The proxy server, in effect, re-broadcasts that traffic, picking up the journey from that point to the ultimate destination address of the traffic.  Whatever destination server (website, service, etc.) you are accessing sees the IP address of the proxy server only, NOT your true IP address.  As traffic routes back to the proxy, it knows who it assigned that temporary IP address to, and routes the traffic from it back to your system.

There are a couple of different types of proxies – some designed for only web traffic, and others that are agnostic to what kind of protocols go across their servers.  But in all cases, they are merely middlemen, altering your IP address, and nothing else.

So, proxies are great for obscuring your IP address, and getting around specific country-based restrictions on content.  You can log into a proxy server in the desired country, and use that as your go-between, tricking the destination server into thinking your traffic originated within the country, and giving you access to the content.  The IP address it sees, the proxy server within the country, has an appropriate IP address that geo-locates to that country.  All IP addresses get assigned to ISPs in blocks, and are then recorded in a central register – it is easy to determine a fairly accurate location of a given user based on IP address.  So, obscuring that with a proxy bypasses that particular problem.  But that’s about all that a proxy has to offer.

What is a VPN?

VPN (Virtual Private Network) services perform several functions, some of which sort of overlap with a proxy server.  A VPN service typically provides a client or app, that the user runs on their system.  This program modifies all outbound Internet traffic by encrypting it with military-grade encryption.  To anyone snooping on your traffic – the government or your ISP, for example – it just looks like gibberish.  Without the decryption key, it is gibberish – gibberish that, by all calculations, would take longer than the life of the universe thus far to brute-force attack and decode.

From that point on, however, the VPN does act a bit like a proxy server.  The encrypted traffic goes to the chosen VPN server.  Like proxy servers, these can be located in many different countries.  Once at the VPN server, the traffic is decrypted, and sent on to the destination.  To the destination server, they believe the traffic originated from the VPN server.  The response comes back to the VPN server, which knows which of its IP addresses it assigned to you, and then encrypts the response, and routes it back to your computer.  Your computer then decrypts the data.

This process of encrypting and decrypting can add some overhead to the overall network traffic, and typically makes an impact on overall network speed.  Top VPNs make very little (10-20% at most) impacts to total download speed, and usually only add 20-30 ms to latency or ping time – not noticeable in most applications.  A single client or app from a VPN provider usually takes care of all traffic by default, and doesn’t need separate configurations for each program, browser, or network application.

How Are They Similar and How Are They Different?

Proxies and VPNs both have their place.  For simple Internet browsing, where speed matters and security isn’t a huge concern – you just want to get past geo-restricted content or not reveal your true IP and location – proxies are great.  But for real serious security, that ensures your true IP and other information doesn’t leak out, and that government monitors or censors, your ISP, and hackers can’t read your data while in transit, there’s no replacement for a VPN.  You can learn more in detail about leading VPNs, including Hotspot Shield VPN, at this review site.  Similarities and differences of features include:

– Proxies add very little processing time or latency, and thus retain most of your original network speed, whereas VPNs can add significant latency and decrease download speed, owing to the encryption/decryption process. The stronger the encryption and obfuscation, the slower things go.

– Proxies are often free or very low cost, because the processing power and load on servers are minimal. By contrast, most VPNs are paid subscription services, with free options generally having bandwidth limitations or not being offered at all by many providers, and the monthly subscription fees typically costing a bit more than paid proxy servers.

– Proxies require configuration or separate types of proxies for browsing, torrenting, online gaming, etc. that needs to be managed on a per-application basis. VPNs, on the other hand, take care of all of your outbound network traffic, regardless of which program it originated from.

– Both proxies and VPNs allow you to access geo-restricted content by assigning you an IP based on the chosen server location, rather than your real IP. VPNs tend to be more successful in accessing geo-restricted content where the content providers actively take steps to block proxies and VPNs, as VPNs tend to have a much larger base of IP addresses and servers to choose from.

– VPNs encrypt your traffic and offer full protection from information leaks between you and your destination servers, whereas proxies offer no such protection.

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