The Differences Between VPN and Proxy


VPN stands for Virtual Private Network. It is a method of channeling a connection over a public medium, like the Internet, while preserving levels of privacy normally found on a private network. A proxy server acts on behalf of another computer. It intervenes in a connection between two computers and secretly performs the tasks of one of the two without the other realizing it is dealing with a proxy. On the face of it, VPNs and proxies seem completely unrelated. However, there is one area of networking where the two vie for market share.

IP Address Change

  • Both VPNs and proxy servers offer the public the opportunity to change their IP address. Regular networked communication involves a client and a server. The client initiates contact by sending a request to the server for a resource. The server responds by delivering the resource. The server has to know the client's IP address or it cannot deliver. The proxy server makes the request on the client's behalf and relays the response without the client and server being in direct contact. The VPN includes the client in its own network and addresses outgoing packets to the Internet with the IP address of its gateway server. Thus, both offer anonymity by different methods.


  • The direct comparison between VPNs and proxy servers is only relevant in services to the general public. A client uses either system to avoid the server gaining access to his PC's IP address. This also gets around regional restrictions placed on some services. Television stations offer their programs on their websites, but only to clients in their home country. A proxy server or a VPN based in the same country as the TV station presents the request to the website from an IP address within the station's country and then channels the response back to the client in a different country.


  • The VPN includes the client computer as part of its private network. The connection to the client may cross many different networks, none of which are controlled by the network administrator. To ensure privacy, the data packets passing between the remote computer and the network are entirely encrypted, including the control data in the headers of the packets. This renders it incapable of routing the packet and so the entire packet is placed inside another packet for transport. This is called "encapsulation" and the transport method is called "tunneling." Proxy servers do not use tunneling. They may use security procedures and encrypt the data in packets, but they do not encrypt the whole packet.


  • Proxy servers are easier and cheaper to access than VPNs. The VPN client needs special software installed on the PC to manage encapsulation. The setup to use a proxy server requires only that the user either enters the proxy server's address in the browser's network settings, or accesses the proxy server's website and enters the address of the target server. Some proxy servers are free, while others are offered as a subscription service. VPNs are only available on subscription.

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