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Ultimate Guide to Proxy vs. VPN in 2024: Which One Is Better?

Ultimate Guide to Proxy vs. VPN in 2024: Which One Is Better?Ultimate Guide to Proxy vs. VPN in 2024: Which One Is Better?

Cyberattacks are on the rise. Security and privacy are becoming increasingly important, particularly for businesses. Since they collect, process, and store a large volume of sensitive data. A proxy server and a VPN allow businesses and individuals to reduce the risk of being detected and tracked by unauthorized users.  Both proxy servers and VPNs mask and hide users’ IP addresses, protecting their identity. However, there are  some key differences. Deciding which one is more suitable for your business needs is crucial.

This article covers the main differences between a proxy and a VPN, such as what they are, how they work, and which is better. 

What is a Proxy?

A proxy server is an intermediary between the user and the target website’s server. Users use proxies to make requests to access the target website. A proxy server forwards the request to the website while hiding or masking the user’s IP address. The website receives the user’s requests without gaining access to their real IP addresses and provides requested information to the user. 

Proxy servers are mainly used for security. The level of anonymity varies depending on the proxy type. For instance, residential and ISP proxies provide greater anonymity than other proxies. The main reason for this is the source of the IP. The source of the residential proxy IP is provided by Internet Service Providers (ISP).

Check out our ultimate guide to proxy server types to learn more about the various proxy server types and their features.

However, proxies do not support encryption. If you are handling sensitive data, proxy servers would not be your ideal solution.

Figure 1: Explains how proxy servers work

the image explains how a proxy server works

What is a VPN?

A virtual private network (VPN) masks users’ real IP addresses and encrypts their connection while they’re online. Internet Service Providers (ISP) or other entities can not detect and track your actual IP address while you are browsing the website.

Figure 2: Understand how VPNs work

the figure shows how a VPN process works

When should you use a Proxy? 

Not slow down Internet connection

In terms of speed, VPNs are slower than proxy servers. VPNs can be slower than proxies because they encrypt users’ data and activities. Using a VPN to encrypt connections and reroute traffic can slow down your internet connection. 

Recommendation: You can give a shot to use a proxy server, but choosing a free option will slow you down. Proxy server speed depends on the type of proxy. Datacenter proxies are a good solution to bypass speed issues.


When you need to complete tasks quickly, datacenter proxies are the best way to mask your actual IP address. Bright Data’s Datacenter Proxies hide or mask machines’ real IP addresses and bypass any location restriction. 

To gain access to geo-restricted content 

Businesses collect web data for marketing and sales purposes. However, they encounter geo-blocking and IP barriers problems while collecting data in real time. You can utilize proxy servers to bypass geo-blocking.

When you connect to the Internet, Internet geolocation techniques identify your machine’s IP address. Your actual IP address reveals your country, city, and ZIP code. You can use a proxy server or VPN to hide your IP address. However, using a VPN to mask your IP address is not the best option. You can choose between a free and paid VPN, but be aware that free VPN service providers may not be very secure. For instance, Amazon Prime blocks some services based on the user’s location, and the service is only available in specific areas. They are capable of detecting and blocking VPN and proxy servers.

Recommendation: Residential proxies assign users real IP to mask their IP address every time they connect to the internet. They offer a layer of anonymity and privacy while browsing.

We compared top 10 residential proxy providers of 2023 to assist you in selecting the best residential proxy service for your needs.

Oxylabs residential proxies enable users and organizations to bypass geolocation restrictions and access location-specific content by hiding their real IP addresses. They assign IP addresses provided by residential Internet Service Providers (ISPs), making them less likely to be blocked by websites.

Source: Oxylabs

When should you use a VPN?

Protect sensitive data 

Unlike proxy servers, VPNs encrypt all network traffic of users. Proxies and VPNs both mask users’ IP addresses. Furthermore, VPNs encrypt all data that comes and goes from the user’s device. VPNs limit third-parties’ ability to detect and track users’ activities. Your sensitive data could be stolen if you use a proxy server. VPNs prevent ISP tracking and protect users’ data from cyber crimes.

  • Proxies hide IP addresses.
  • VPNs hide IP addresses + personal information. 

Work on a system level

VPNs support all devices used by users, including computers, mobile phones, televisions, and modems. Proxies are configured on specific devices or applications. They are unable to cover the user’s entire system. Proxies, unlike VPNs, only  reroute traffic from one system.

For example, a VPN is a better option if you work remotely than a proxy server. It allows you to connect your device to any office machine or system. The distance between the user’s device and the VPN server may affect speed. Assume you are in the United States and the VPN server is in Germany. The request is routed to the VPN server, which then routes it to the actual web server, and the entire process takes time and slows down the connection.

Smartproxy provides a variety of proxy services, including shared datacenter, rotating and static residential, and mobile proxies. Datacenter proxies are suitable for time-sensitive tasks if speed is your primary concern and you’re searching for an inexpensive proxy solution. Note that datacenter proxy servers can be detected and blocked more readily than residential proxy servers. Residential proxies are more secure than datacenter proxies as their IPs are provided by internet service providers (ISPs).

Proxies or VPNs: Which one is better for you?

Both proxies and VPNs allow users to access geo-restricted content. You can choose the best option based on your needs, budget, and use case. However, be aware that free proxies, and low-quality VPNs do not provide high security. VPNs are the best solution if your main concern is security and you have a budget.

However, if you only need to mask your IP address from a single source and are concerned about the cost. You should use a proxy server. It gives you access to geo-restricted websites as well as a VPN. You can also utilize a proxy server for personal purposes and smaller tasks if you do not care about security. 

For commercial purposes, security must be the main concern, even if VPNs cost some money. VPN is better than a proxy server for businesses since it provides a larger network and ease of use. Without any technical knowledge, anyone in the organization can quickly adapt.

Hide IP address but data is not encrypted
Hide IP address and encrypt data
Is used for web traffic (HTTP)Is used for all kind of traffic
Less securedMore secured
Works at a application level
Works at a system level

Further reading

If you want to learn more about web scraping and how it can benefit your business, feel free to read our articles on the topic:

Also, don’t forget to check out our sortable/filterable list of proxy service / server.

For guidance to choose the right tool, reach out to us:

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Access Cem's 2 decades of B2B tech experience as a tech consultant, enterprise leader, startup entrepreneur & industry analyst. Leverage insights informing top Fortune 500 every month.
Cem Dilmegani
Principal Analyst
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Gulbahar Karatas
Gülbahar is an AIMultiple industry analyst focused on web data collections and applications of web data.

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