Proxy vs. VPN: What Are The Main Differences?

As more people become concerned about their personal information being sold or stolen, both individuals and businesses are seeking ways to maintain anonymity and protect their private data. Both proxies and VPNs provide privacy by hiding your IP address, but even though they seem very similar, they don't work in the same way.

So, which should you choose? This guide will break down the key differences between proxies and VPNs, their strengths and weaknesses, and which option would work best for your use case.

What is a proxy server?

A proxy server is a middle layer that handles requests between your device and the target. It hides your original IP address by forwarding requests through an IP address assigned by a proxy provider instead.

Instead of connecting directly to a website, your requests go through the proxy first. The proxy server then fetches the information from the website and sends it back to you.

Think of it as a receptionist who takes your message, walks it to the right office, delivers it, and returns with the response, while the person in the office never interacts with you directly.

A proxy server can do a lot more than just hide your IP address. It can be configured as a firewall, used to filter content, monitor internet activity, or improve speed by caching frequently visited sites.

Types of proxies

There are different types of proxies, and their origin classifies the most common ones. Here are the most popular proxies you can get and their use cases:

• Residential proxies. These use real IP addresses from actual residential devices on a home network. This makes your traffic appear as if it's coming from a real device at a real location. Residential proxies appear more legitimate, so they're preferred for tasks like managing multiple social media accounts or web scraping from strict websites.
• Datacenter proxies. Datacenter proxies come from cloud-based datacenters that aren't tied to physical ISPs. They offer fast speeds and are generally cheaper, but may be more easily detected by sophisticated websites. They're great for price comparison, AdTech, and SEO tasks.
• Mobile proxies. These use 3G, 4G, or 5G IP addresses assigned by mobile carriers. Mobile proxies are great for app testing, multi-accounting, and scraping various targets.
• ISP proxies. Static residential (ISP) proxies are IPs provided by Internet Service Providers (ISPs) but hosted in datacenters. This unique setup combines the reliability of datacenter proxies with the authenticity of residential IPs, resulting in fewer blocks while maintaining stable connections.

You might stumble upon some other proxy server definitions, including:

• HTTP proxies. They handle only web traffic (HTTP and HTTPS). They're commonly used for basic browsing and accessing websites.
• SOCKS5 proxies. These proxies are more versatile than HTTP proxies. They support all kinds of internet traffic, including email and file transfers. Because they operate at a lower network layer, they often deliver better performance.
• Anonymous proxies. Anonymous proxies hide your IP address but still reveal that you're using a proxy. They're often identified as proxies by advanced anti-bot systems.
• Transparent proxies. Transparent proxies don't hide your IP address at all. Instead, they cache or filter content. These proxies operate without notifying the user, and they're often found in corporate settings.
• Forward proxies. A forward proxy sits between the client (e.g., a browser) and external systems, thereby regulating traffic and masking the client's identity. It's often used for tasks like accessing geo-restricted websites.
• Reverse proxies. A reverse proxy sits between external users and a server, routing requests to internal servers, improving security, and distributing traffic for load balancing.

Common use cases for proxies

Proxies are versatile tools that offer a variety of practical applications in both personal and professional settings. Some of the most common use cases include:

• Web scraping. With proxies, users can collect large amounts of data from websites without facing CAPTCHAs or IP bans. By rotating IPs, proxies help bypass rate limits and anti-scraping mechanisms, ensuring continuous access to real-time information from various targets.
• Bypassing geo-restrictions. Proxies allow users to access content otherwise unavailable in specific regions by masking their real IP address and routing their connection through a server in a different location.
• Managing multiple accounts. Various proxy types help users manage numerous accounts on the same platform without getting flagged for suspicious activity. Businesses or individuals can avoid detection and maintain smooth operations across eCommerce or advertising platforms by assigning different IPs to each account.
• AdTech. With a list of IPs, businesses can test ad placements, validate campaigns, and monitor competitors in different regions to identify whether the ads are displayed correctly.
• SEO. Proxies play a vital role for SEO managers. SERP gurus can collect data on keywords, competitors, or backlinks at scale. With the help of proxies and scraping solutions, businesses can gather information on search engine results without facing various restrictions.
• Price intelligence. Proxies enable businesses to monitor and collect competitors' pricing information in real time. This helps in adjusting pricing strategies, understanding market trends, and ensuring competitive advantage without being blocked by websites that guard their pricing data.

Pros

• Simpler setup. Many apps let you input proxy details directly, so configuration is quick and easy.
• Faster speeds. Since most proxies don't encrypt traffic, they introduce less overhead and often deliver better response times.
• More affordable. Proxies are generally cheaper, and there are many low-cost or pay-as-you-go options.
• More concurrent connections. You can run multiple sessions across many IPs at once, which is ideal for scraping or managing several accounts.
• Application-specific. You can choose which browsers or programs use the proxy, leaving the rest of your device's network traffic untouched.

Cons

• No encryption. Most proxies don't encrypt data by default. Anyone on the same network can intercept your connection unless the website itself uses HTTPS.
• Limited security features. Proxies mainly mask IP addresses. They're not designed to prevent advanced attacks or provide system-wide protection.
• Potential data leaks. Free or malicious proxies may log traffic, inject ads, or resell your data, which puts your privacy at risk.

What is a VPN?

A VPN (Virtual Private Network) is a service that creates a secure and encrypted connection between your device and the internet. VPNs mask your IP by routing all your internet traffic through a remote server while encrypting the data to protect it from third parties.

When a user connects to a VPN, their device creates a secure connection "tunnel" to the VPN server. All internet data traveling through this tunnel is encrypted, so even if someone intercepts it (like on public Wi-Fi), they cannot understand it. This encryption protects sensitive data such as passwords, financial transactions, and other personal information. Once your data reaches the secure server, it's decrypted and sent to its destination.

Common use cases for VPNs

For some users, proxies and VPNs might sound similar. However, the use cases differ. While proxies are great for tasks like multi-accounting, ad verification, and web scraping, VPNs are great for use cases like:

• Securing public WiFi. One of the biggest advantages of a VPN is protecting your data on unsecured networks. When you connect to a public Wi-Fi, a VPN encrypts your entire connection so you can safely do things like online banking or sending emails.
• Bypassing restrictions. VPNs also allow users to access content that may be regionally blocked or censored by rerouting traffic through servers in other locations.
• Enhancing online privacy. Because VPNs hide your browsing activity from your ISP and encrypt everything, they're great for general privacy. Advertisers and trackers will also have a harder time linking your browsing activities back to you.
• Remote work. VPNs provide remote workers with a secure and encrypted connection to their company's internal network, allowing safe access to sensitive business resources and data from anywhere.
• Accessing sensitive information. Any activity involving personal, financial, or confidential data should be conducted over a VPN.

Pros

• High level of security. VPNs use strong encryption, which reduces the risk of packet sniffing or unauthorized interception.
• Deeper privacy. Your traffic stays encrypted end-to-end, limiting how much ISPs, advertisers, or bad actors can track.
• Consistent protection at the network level. VPNs often operate at the IP layer, which makes it easier to secure multiple apps without needing separate setups.

Cons

• Slower speeds. Encryption and routing traffic through distant VPN locations can introduce extra latency when using VPNs.
• Potential privacy risks. Poorly configured or low-quality VPNs can leak data or log user activity, which defeats the purpose of using a VPN.
• More expensive. Reliable VPNs typically cost more than proxy services, especially those that offer premium security and global coverage.

What are the differences between a proxy and a VPN?

Though proxies and VPNs both provide privacy, they do it differently. On the surface, they may seem similar, but there are key differences to be aware of when deciding between a proxy server and a VPN:

Privacy and encryption

Proxy servers hide the user's IP address from the web server the user visits, but they don't encrypt data by default, though they can be configured to do so. This is less of a concern today thanks to HTTPS adoption, but if you're worried about someone intercepting your traffic before it reaches the website, then a proxy alone cannot protect you.

A VPN takes things a step further by encrypting your data. Most VPNs use end-to-end encryption, which ensures that ISPs, routers, or anyone on the same network cannot view your activity. This ensures total privacy even in the event of a data breach or packet sniffing attempt, as the encrypted data is useless if it cannot be decrypted.

Anonymity

VPNs typically don't hide the fact that you're using a VPN. While a VPN might make you anonymous to websites and your ISP, it doesn't hide its own signature. Many services can detect VPN traffic and may block it.

A proxy server, on the other hand, can make the target think that the data is coming from a real person. This difference matters in situations where a service blocks VPN traffic or where authenticity is important, such as ad verification or sneaker copping.

Connection speed

Proxies often have the edge in raw speed for a couple of reasons. They usually don't encrypt your data, and they handle a narrower scope of traffic. Without the encryption step, data packets are smaller and require less processing. This also means proxies can provide lower ping times for applications like online gaming, where every millisecond counts.

In contrast, VPNs add an encryption layer on top of your traffic. Your system must encrypt and decrypt every packet, which uses more processing power and can slow down your connection. This becomes even more noticeable if the VPN uses strong encryption or sends your traffic through a distant server.

Concurrency

Proxy providers offer hundreds of proxies at once, with unlimited bandwidth and connections. These proxies allow making many connections at once, which is vital for activities like web scraping, multi-account management, and other bulk tasks.

VPNs, on the other hand, are better suited for personal use. While they can still handle multiple connections, scaling them to hundreds or thousands of sessions is far more complex and still won't match the concurrency possible with proxies.

Network-level vs. application-level routing

A VPN is installed directly on your operating system and routes all traffic at the network layer by encrypting every connection, including browsers, background services, and any app that accesses the internet. This ensures that each application receives the same level of security but may also consume more resources.

Proxies, on the other hand, route data at the application level. They only route traffic from the specific browser or application you configure. This uses fewer CPU resources and allows selective routing, but any traffic outside those configured apps will bypass the proxy entirely and use your real IP.

Pricing

Proxies are generally more affordable compared to VPNs, and many proxy providers offer pay-as-you-go options and generous bulk discounts.

Meanwhile, VPNs usually cost more because they provide full system encryption and advanced security features. VPN pricing is also less flexible, as most VPN providers prefer to operate on fixed monthly or yearly subscription plans rather than usage-based billing.

Summary of differences: Proxy vs. VPN

To understand which option is best for protecting your privacy, you need to be clear about your priorities and what you're trying to achieve. Here's a table that compares some of the main features of a proxy vs a VPN:

Can you use a VPN and a proxy together?

Yes, you can use a proxy and VPN together. In this setup, the proxy hides your IP while the VPN encrypts your traffic. While this can provide additional privacy, it may also result in slower connection speeds due to the combined layers of encryption and rerouting.

For the best performance, we recommend using one solution for the specific use case. For example, if you're working with sensitive information while connected to the public network, turn on your VPN and safeguard your connection. When you're running web scraping, SEO research, or other traffic-intensive tasks, use proxies to ensure you're avoiding CAPTCHAs, IP bans, and other restrictions.

Proxy vs VPN: When to use each

Let's go over a few scenarios where each option makes the most sense. Both proxies and VPNs hide your IP address, but they solve different problems.

Proxies are lightweight, fast, and they're a simple way to conceal your location, but they're not a great way to securely communicate sensitive information. Compared to proxies, VPNs offer much more privacy, but they experience higher latency.

Wrapping up

By now, you should have a clear understanding of how proxies and VPNs differ, and when each one makes sense. Both proxies and VPNs offer unique benefits depending on your needs. Proxies are faster and better suited for tasks like web scraping or automation, while VPNs offer tighter security and privacy for everyday browsing and handling sensitive information.