Both proxy and VPN servers connect you to a remote computer, which means they must both be more or less the same, right? Not necessarily. Let us look closer at how to use them, and why a proxy server is a poor substitute for a VPN solution.

Almost every week, there is a new breaking story on encryption, data breaches or other issues related to intrusions into the private sphere. Many of these articles speak about the necessity of ensuring the security of your internet connection, but they often miss the details. Exactly how do the proxy servers and VPN connections that we hear about work?

If investing time and money into increasing security, it is necessary to ensure that you choose the right tools for the right situation.

Even if the basics vary, VPN and proxy servers do have one thing in common – they both allow you to appear as if you are connecting to the Internet from a geographical location that is different from the one you are in fact located at, e.g. a different country. However, the way in which they achieve this, and the extent they protect your private sphere, and handle encryption and other functions, vary considerably.

Proxy servers protect your IP address

A proxy server is a server that works as an intermediary between your internet traffic flows, which makes your internet activities appear to originate from another location. Let us for instance assume that you are in Copenhagen, and wish to log in and establish a connection to a website that is geographically limited for people outside the US. The traffic from your internet browser will then appear to originate from the remote computer, and not from your own.

The proxy server is excellent for low-risk operations, such as viewing area-restricted YouTube videos, bypass simple content filters, or bypass IP based restrictions on online services.

However, proxy servers are not particularly useful for high-risk operations, as they only hide your IP address and works as an intermediary your internet traffic. They do not encrypt the traffic between your computer and the proxy server; they typically do not remove identified information from your transfers aside from the simple IP swap; and they feature no additional measures in terms of the private sphere or inbuilt security.

Anyone with access to the data flow (your provider, government, anyone who intercepts Wi-Fi traffic at the airport etc.) can eavesdrop on your traffic. Also, certain forms of small programs, such as malicious Flash or JavaScript elements in your internet browser, may reveal your true identity, which makes proxy servers ill-equipped for serious operations, such as rejecting the monitoring of your online activity.

Proxy server connections are configured on an application-to-application basis, as opposed to a computer level basis. The entire computer is not configured to connect to a proxy server, you configure your internet browser, BitTorrent client or other proxy-compatible application. This is perfect if you only want a single application to be connected to the proxy server (as in our previously mentioned selection scheme), but does not work as well if you wish to redirect your entire internet connection.

VPN or Virtual Private Networks encrypt your internet connection

As is the case with proxy servers, Virtual Private Network solutions – VPN – make your traffic appear as if it originates from a remote IP address. This however, is also where the similarities end. VPN solutions are installed on an operating system-level, and the VPN connection covers the entire network connection for the computer it is configured on.

Contrary to a proxy server, which simply works as an intermediate server for individual applications (such as your web browser or BitTorrent client), a VPN will cover all individual application traffic on your computer from your internet browser to your online activities, even including the Windows update service, which runs in the background.

Furthermore, the entire process passes through a heavily encrypted tunnel between your computer and the remote network. This makes a VPN connection ideal for each form of high-priority network use, where private spheres, or anonymity is important. With a VPN, it is not possible for neither your provider nor any other snooper to gain access to the data transfer between your computer and the VPN server. If you, for instance, are traveling in a foreign country and you are anxious about logging in to your financial websites, such as your online bank etc., read private emails or even connect to your home network securely while away from home, you will easily be able to configure your laptop to use a VPN.

Even if you are currently not on a business trip, you can still benefit from using a VPN. With a VPN solution enabled on your computer, you will never have to worry about insecure Wi-Fi/networks in public places, or whether the free internet connection at your hotel is riddled with security holes.

Running a VPN requires good hardware, and consequently, good VPN services are not free of charge. Expect to pay either a monthly or annual fee for a robust VPN service. The other cost associated with VPN solutions is performance. Proxy servers quite easily transmit your information, since there are no broadband expenses, and just a slight delay when using it. VPN servers on the other hand, will consume both processing power and bandwidth due to the administration the encryption protocols entail.

The process of selecting a VPN is slightly more nuanced than selecting a free proxy server. If you are in a hurry and you want a reliable VPN solution, we recommend F-Secure Freedome VPN, which is both a user-friendly, feature-rich and inexpensive VPN solution which covers three to five devices in your household.