VPN vs Proxy

In many ways, proxies and VPNs are similar. They both re-route traffic through a remote computer or server. Both can help keep you anonymous by hiding your IP address. And you can use both to access geo restricted content.

But they also differ in a few significant ways, especially when it comes to security and the level of privacy. And, depending on your goal, these VPN vs proxy differences can make one a much better option than the other.

What Is a VPN

A VPN (which stands for Virtual Private Network) is made up of one or more servers run by a VPN service. You connect to one of these servers using locally installed client software supplied by the provider. Once connected, the server acts as a middleman for all web traffic between your device and the internet.

The tunnel (connection) between your device and the VPN server is highly encrypted. Anyone intercepting your traffic (like your ISP, the government, or a hacker) as it travels up or down that tunnel will be unable to decode it and view its contents.

Before your traffic exits the VPN tunnel and heads towards its ultimate destination (ex: a web server), your public IP address and other information that can identify you are stripped out. Equivalents from the server take their place.

Diagram of how a VPN works compared to proxies

Beyond this point, anyone who receives your traffic will believe it’s coming from the VPN server, not your device. They will also think your location is that of the server. Your real identity and actual physical location remain private.

VPNs work at the operating system level. Once your VPN connection is on, by default, all network traffic goes through it. Using everything from your web browser to purpose-specific software (for example, streaming or downloading clients or apps) remains secure and anonymous.

As an optional advanced setting, many providers will give you the flexibility to exclude traffic from specific software or ports if you wish to do so. I like to exclude my music streaming app since much of the music I listen to is not always available in countries I connect to with a VPN.

What Is a Proxy

Conceptually similar to a VPN, a proxy is a single server that acts as a middleman for your internet traffic. Proxy setup comes in one of two flavors. You can configure it manually at the operating system level, the more complex option. Or, as done typically, you can set up a proxy server per application – plenty of software supports the use of proxies, including all major browsers.

Software that uses a proxy to talk to a website or another resource on the internet relays traffic through the proxy server with which you configure it. Unlike a VPN, no encryption is applied to the connection between your device and the proxy server.

Diagram of how proxies work compared to VPNs

When your traffic reaches the proxy server, your IP address gets stripped away. However, a lot of the other information which may identify you may remain. But, from an IP point of view, from there onward, everyone will believe they’re talking to the proxy server, not to you. Your location will effectively be masked, replaced by that of the proxy.

As mentioned above, proxies are usually set up at the application level on a case-by-case basis. Proxies on browsers are easy to configure, as are VoIP applications (Skype, Zoom, etc.) and BitTorrent clients. Anything else is hit or miss. If you want to redirect all your internet traffic through the proxy, your best move is to set it up through the operating system.

When to Use a VPN

A VPN is an excellent tool for anyone who wants to maximize their online privacy and anonymity, get around internet censorship, or access geo-blocked content. I use one daily for all of the above reasons.

VPN connections give you a new IP address. And, unlike when using a proxy, any data you send or receive is encrypted. It’s the combination of those two features which makes virtual private networks such an excellent tool.

Benefits of a VPN

  • Online Privacy

    After your device connects to a VPN server, all data transferred between the two is highly encrypted. Anyone from your ISP to a hacker (or the government, for that matter) is unable to read what you upload or download. They also can’t tell which website or resource you’re using since everything goes to the host server first.

    At the opposite end of the connection, the website or service you’re accessing also has no idea who you are (unless you let it know by logging in). For all it knows, you’re the VPN server.

  • Bypassing Geo-Blocking

    VPN provider servers are spread out all over the globe. Some services, like PureVPN or HideMyAss! support well over a hundred countries. If a piece of content you wish to access is restricted to a specific region, connecting to a VPN server there will unblock it. The IP of the server you use will be local and hence allowed. This, for example, is how I access US Netflix when abroad.

  • Bypassing Censorship

    Similarly to how a VPN lets you access geo restricted content, it can avoid censorship. If your current location does not allow viewing certain content or accessing an online resource, using VPN servers in a country that does will side-step those restrictions. Connecting to servers in countries like Estonia, Iceland, or the Netherlands is typically a good choice for this purpose.

  • Preventing Bandwidth Throttling

    Based on what you’re currently doing online, your internet service providers may reduce (throttle) your bandwidth speed. This practice is very common when torrenting (for which there are many legitimate uses).

    By analyzing the type of traffic you’re receiving, the ISP may slow down your connection to levels that can be multiple times lower than what you’re paying for. Because a VPN encrypts data going to your device, it prevents your ISP from figuring out what you’re doing. If they don’t know, they can’t throttle your bandwidth.

  • Wi-Fi Hotspot Security

    Anytime you use public Wi-Fi at a coffee shop, hotel, or airport, you’re opening yourself up for potential security breaches. It’s surprisingly easy for someone who’s on the same network to start intercepting your uploads and downloads.

    Using a VPN won’t stop them from doing that. But, because VPNs encrypt your traffic, anyone that grabs your data will not be able to view or do anything with it.

  • VoIP Privacy and Security

    Voice over IP calls are also relatively easy to listen in on. They travel the internet unencrypted. It does take a bit of technical know-how, but even mid-level hackers (for the lack of a better term) may be able to eavesdrop on conversations.

    If you regularly use Skype, Viber, or any other VoIP service, connect to a VPN before making a call. The encryption that comes with it will make hacking attempts impossible, keeping your call private and secure.

  • Preventing Search Engine Query Logging

    With the intent of serving you better by delivering more accurate results and ads, search engines tag all searches with the IP address which made them. By knowing your past, they can better predict what you want in the future.

    The downside is the Google’s and Bing’s of the world are effectively cataloging your life. Are you looking for a divorce lawyer or information on anti-depressants? They know it and log it. We all likely have parts of our lives we prefer to keep private. When you use a VPN to hide your IP address, your searches will remain anonymous.

Virtual Private Network Issues

There is no such thing as a free lunch, and there are a few downsides to using VPNs. Though, at least in my opinion, they are all relatively minor.

A VPN requires you to download and install a client. That’s yet another piece of software you need to put on your device. Every provider has its version. And they all look and work differently, too. So, if you ever switch providers (or use multiple ones as I do), you’ll need to install and learn a brand new application every time.

Different VPN provider software installations

Using a VPN may also slow down your connection. But, how much (or if at all) depends on many factors. It starts with the encryption applied to everything you send and receive. Encrypting and decrypting take processing power. If your device cannot do so quickly enough, data will be delayed, and your connection speed reduced to where it can keep up. Thankfully, you can usually get around this issue by reducing the level of encryption, which most providers let you do.

Anything you send over a VPN also needs to travel an extra distance to the VPN server. That distance, combined with the current server load, may also affect speeds. To alleviate this problem, choose a lightly loaded server as physically close as possible to you or the content you’re viewing.

One more potential sticking point with VPNs is online activity logging. For maximum privacy, you should ensure you use a completely logless VPN provider. Some services may keep anonymous information like connection timestamps or transferred data totals, mostly for network performance and troubleshooting reasons. On its own, that data can’t identify you, but it is still a footprint. If you want to be extra careful, any provider off my list of best VPNs for privacy makes the cut.

When to Use a Proxy Server

There are several things for which proxies are very useful. They’re not as versatile as VPNs but are a good lightweight option for low-stake tasks where internet privacy and security are not of great concern.

Benefits of Proxies

  • Some Online Privacy

    Proxies can give you a small degree of anonymity. All data goes through the proxy server, so your ISP doesn’t know the IP address of the website or service you’re accessing.

    But, because there is no encryption, the ISP can still easily analyze the contents of what you’re viewing or downloading. This fact alone means a proxy is a worse choice than a VPN service if your goal is to maintain complete online privacy.

    On the other end of the connection, the website or service you’re accessing will not know it’s talking to you (unless you log in). It’ll think it’s communicating with the proxy server. So at least there, a proxy does keep your real identity hidden.

  • Bypassing Geo-Blocking

    Like a VPN, proxies give you a new IP – that belonging to the proxy server you use. Choosing a proxy in a country that allows viewing the blocked content you’re trying to access should let you see it too.

  • Bypassing Censorship

    Proxies are also useful in getting around online censorship. If, for whatever reason, you’re not allowed to view specific content at your current location, pick a proxy in a country that does.

    There is one caveat to using proxies instead of VPNs for this purpose. It again goes back to the lack of encryption. With proxies, data leaves and arrives at your device unencrypted. If you’re concerned about someone snooping around to see what you’re doing, a VPN will stop them in their tracks and give you complete security and privacy. A proxy will not.

  • Preventing Search Engine Query Logging

    Every time you use a search engine, it records your query with your IP address firmly attached. Google, Bing, Yahoo – they all do it. This type of logging helps tailor future searches to your history and gives you better results and more relevant ads.

    The downside is the search engines know and remember everything you look for. And some of those things we may prefer to keep private. By hiding your IP address behind a proxy server, you get precisely that.

Issues With Using a Proxy

The biggest difference between a proxy and a VPN is that the former does not encrypt the information sent from your device. So, if you have online security or privacy concerns, proxies are a poor choice.

Without encryption, your ISP (and, by extension, the government and any other company willing to pay for the information) can see, analyze and log everything you do on the internet. Every website you visit, every file you download – it’s all out in the open when you use a proxy server.

Due to the lack of encryption, proxies also won’t help you prevent bandwidth throttling, nor will they protect you from potential intruders when using a public internet hotspot.

Like a VPN, a proxy may slow down your internet connection because data must first travel to the proxy server before reaching its final destination. However, the most significant potential impact on speed is the performance of the proxy server itself.

Compared to a VPN, proxies may result in slower download speeds

Very often, individuals like you and I run proxies from home. That puts performance at the mercy of the server hardware and how quick its internet is.

Unlike VPN providers, most proxy servers also don’t use load balancing. Where the former can spread traffic across multiple computers that are part of the same server cluster, HTTP proxies rarely do. So the more people connect to it, the slower it gets.

Because any individual with an internet connection can run a proxy, you also need to keep something else in mind. Even though you gain a degree of anonymity by using one, the proxy server owner can still see everything you’re doing.

With a VPN, before you pick a provider, you can first read through their terms of service and other policies. With a proxy, in the vast majority of cases, the owner is entirely anonymous to you. This is yet another reason why you should avoid proxies for anything where security or privacy matter.

One more important thing worth mentioning is free proxy server websites. These are web pages that effectively act as proxies, standing as a man-in-the-middle between your browser and any other internet page you wish to visit.

While a proxy website may sound great in theory, they’re often insecure and can be downright dangerous in practice. Injecting malicious code into anything sent back to you is trivial. So, unless you have no other choice, it’s best to stay clear of them.

Which Is Better: VPN or Proxy?

When choosing between a proxy and a VPN, for me, the answer is easy: VPN all the way. It lets us do everything a proxy does but better. It’s simply a much more versatile and complete solution. It’s a common myth that proxies are just as good as a VPN.

Safety and Privacy

Both proxies and VPNs change your IP address. As a result, any website or service you use will be unaware of your true identity.

However, unless data is encrypted as it leaves your device, you’re not hiding much. Your ISP (and anyone they sell or give their logs to) or a hacker can intercept and analyze your uploads and downloads. They’ll know exactly what you’re doing. If you’re sending any personal information, they may also be able to read it.

A VPN uses strong, often military-grade encryption, making sure the above does not happen. A proxy, not so much.


A proxy is less resource-intensive, which may be something to consider. Unlike VPNs, proxies don’t need additional software installation, which saves storage. And they also don’t encrypt your data, which saves processing time. If you have an old phone or computer, a proxy may be just what the doctor ordered. But on pretty much all modern devices, slowdown due to encryption will not be a noticeable issue.

From all other angles, VPN performance will be the same or better than that of a proxy. Data needs to travel an extra distance to get to a server with either solution, so neither has an advantage.

As far as the server itself goes, score one for the VPN services. Most proxies are run by individuals using server hardware and broadband connections which are not exactly top of the line. Throw a bunch of users on an ill-equipped server, and things may come to a grinding halt.

VPNs usually operate out of large data centers, with specialized hardware and a quick internet connection. As you can see in my speed test based rankings of the fastest VPN providers, some providers do better than others. But even those on the lower end of the scale will generally outperform proxies. For a VPN service, running servers is a business. For most proxy providers, it’s just a hobby.

Ease of Use

Even though every VPN provider requires installing client software and each implementation is different from the next, I still believe VPNs are much easier to use than proxies.

Proxy settings have to be set up and turned on and off on a per-application basis. It can be a pretty tedious process (assuming the application has proxy support to being with). And what if you want to change locations from, say, a US proxy to one in the UK? You need to go back and manually update each application yet again.

It’s not a great user experience.

Regardless of the provider and how they implemented their client, connecting to a VPN boils down to a simple two-step process. Pick the server through an interface in the VPN software, and click a single button to connect. It doesn’t get much easier than that.

Proxy vs VPN Final Thoughts

A proxy is a good solution if you need to hide your identity for simple tasks. Tasks that don’t require much security, safety, and for which internet speeds don’t matter. But, when performance, security, or complete anonymity are important, proxies just won’t do. In those cases, a VPN is the way to go.

If you’re not sure where to start, please take a look at my list of recommended VPN providers. Any one of them would make a fine choice.

About Tim Tremblay

Tim is the founder of Fastest VPN Guide. He comes from a world of corporate IT security and network management and knows a thing or two about what makes VPNs tick. Cybersecurity expert by day, writer on all things VPN by night, that’s Tim. You can also follow him on Twitter and Quora.

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