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Both proxies and virtual private networks have a wide range of uses, most related to anonymity and the changing of identity online. You IP address is like your online ID, and using one of these two programs on your phone or computer can help you change this ID. Sometimes, this change is needed in order to protect your real identity. Sometimes, this change is desired because of the benefits of having an ID from a certain location in the world. Proxies and virtual private networks, though in some situations can both be used, producing similar results, and entirely different tools, and one or the other may be exclusively needed occasionally.
Bypass Firewalls
Both proxies and I tend to separate "unblocking site", and "bypassing firewalls", but essentially they're the same thing. Basically, a firewall stands between you and a website, preventing you from opening up and browsing this site. It could be that your local firewall is blocking a site. This might be at work, where your boss has blocked Facebook. It could be at home where your mom blocked some of those sites with 'questionable' content. It might be the site you want to access triggered spam and malware filters on your firewall, and you unintentionally blocked it. In the case of China and Vietnam, the government blocks sites with a country firewall.
Whatever the firewall, the best way to get around it (or through it as some users say) is with proxies and VPNs. Which one is better? Well, in a general sense, VPNs are more secure, more private, and will get you past more firewalls that proxies will. Proxies are still widely used, but in most cases I think a VPN could easily outperform any proxy as far as bypassing firewall restrictions goes. The one advantage proxies have over VPNs is that web based proxies don't need to be installed, so they're faster to pull up on computers you don't own. This could be convenient if you're bypassing school and work firewalls.
Unblocking sites
Though similar to bypassing firewalls, I would say that this category would include more users that have been banned from sites. That is, the site is blocking you. I've been banned from a forum or two for spam or trolling - unfairly in my opinion - but that's just the way it goes. The tough thing to deal with in this situation is that a ban is often irrevocable, and even heartfelt emails about how it was all a misunderstanding meet with zero response. Changing your IP address is a simple way to lift the ban.
There are many sites that block outside users because of the content on the website. This would include Hulu, Pandora, Netflix, iPlayer, Spotify, and a number of other music/movie/TV streaming websites. The content is often restricted exclusively for local residents of the country. To unblock these sites, you need to change your IP address to a local IP.
Again, VPNs will get you access to more site than proxies will. Some of the smaller sites, from lesser known areas of the world you probably won't have a problem with. But unless you get a very secure, very advanced proxy service that guarantees you access to these sites, a VPN should be your first choice. It has been documented on many sites that proxy IP address will not get you access to Hulu, Netflix, or iPlayer.
Anonymity
Maybe the most general, and maybe the most boring thing to do with proxies and VPNs is to hide your identity. It a best case scenario, you're a 00 agent who needs to send secret emails overseas to headquarters and you need nothing but the best security to ensure that the bad guys can't intercept them. Chances are, you just heard that it's easy to steal your password on a cafe wifi network. Worried about government interference in your online affairs? Yes, proxies and VPNs can be used.
I know I keep harping on about VPNs - but really, VPNs are like an upgrade from a proxy. While a proxy redirects your information to a third party server, very often, your original IP data is attached to the proxy server in one way or another. Especially with open proxies, you never know what level of anonymity you get. Even with professional proxy services that promise no server logs and SSL encryption, they're still missing the VPN tunneling protocols that virtual private networks provide. As far as anonymity and security goes, virtual private networks take the cake.
Why use proxies?
Proxies are simple, fast, and convenient. I wouldn't trust my personal information to them, but if I need to unblock a site, or I want a fast access decent level of anonymity because I travel a lot and frequently access different computers, then a proxy service would suit me.
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