What Does a Proxy Do and Why Do I Need One?
Gleb Lepeshkin
Gleb Lepeshkin Published: 2023/03/20

Most of the time a regular internet user is asked about a proxy he or she gets easily challenged by this question. And there is a reason for that. People do not come across this type of digital tool until and unless absolutely necessary. And sometimes even professional users who employ proxies for a variety of purposes do not have a clear picture about what a proxy is and how exactly it solves their problems.

In this article we will go beyond the plain definition of a proxy server and extend our conversation to the areas of different types of proxies and the most common use cases of such tools. In each such case we will share with you some insights on the types of proxies involved based on our vast experience. And this alone will make the subject of using proxies much clearer. 

So, let’s get started with a definition of a proxy in plain English and continue with the best practices in proxy use that we have to offer.  

How exactly does a proxy work? 

You may already know that a proxy server is a digital intermediary between you and the target website you are trying to access. And it is a fairly good interpretation of proxying. In other words, you borrow IPs from a company (a proxy provider) and use them to hide your original IP for various purposes. And such purposes include business-related cases like scraping information about your competitors or potential customers. And, yes, you can use proxies for increasing the security of your network or for preventing hacker’s attacks but for the purposes of this article we will concentrate on use cases related to business practices that cover 90% of proxy applications. 

Now, to understand how your IP is replaced with another one, and, what’s even more important, where this other IP is sourced from, let’s consider the most common types of proxies available in the industry. 

What are the most common types of proxies?

Before we get to the nitty-gritty of the proxy technicalities, let’s consider two types of proxies by their origin. Most users of IPs choose between datacenter and residential proxies. So how are they different exactly and which one to choose? 

Residential vs Datacenter Proxies

The datacenter proxy servers are sourced by the proxy providers from large data centers with vast pools of IPs. The nature of such servers makes them extremely high performing. They demonstrate high speeds and can handle loads of traffic. These IPs can be very effective in scraping large volumes of data from search engines or web platforms (such as marketplaces). Normally, datacenter proxies are less expensive than residential proxies due to their abundance. The downside of such IPs is the relatively high vulnerability to bans by sophisticated anti-bot systems employed by some of the websites. And, clearly if such bans occur, a whole subnet of IPs can be at risk. 

Now, unlike datacenter proxies, the residential IPs are sourced from ISPs (Internet Service Providers) located in some specific regions (which is also important, and you will understand why in a moment) and represent some physical or individual Internet users. That’s why sometimes these IPs are also called private ISP proxies.  In other words, when you use a residential proxy, the target website will see you as a normal user from a given territory. Connections through such IPs are slower than in case of datacenter proxies but you will be able to easily overcome geo-specific hurdles. These proxies are ideal for some low traffic transactional missions such as ad verification in certain areas (where you understand how your ads are performing in some regions), buying rare items online (such as sneakers, clothes or accessories), registering in some services (like on gaming sites), or scraping video streaming services (with special Youtube proxy servers).

Rotating vs Static Proxies

As you may guess from the name correctly here, when you buy a rotating proxy you get a new IP for each proxy session. And the IP of your static proxy will remain the same during the whole term of proxy use. Now, there are different types of rotating mechanisms depending on your proxy provider but the idea is essentially to give you enough flexibility in using IPs during lengthy scraping missions. In some cases the rotations let you have some time frames for filling out forms manually when data entry is involved. You can also adjust the rotations of proxies by setting sticky sessions, when a certain IP would last until you signal the change to a new one.   

Both datacenter and residential proxies can be rotating (also known as backconnect) or static and the use cases here can vary. Normally, when you want to engage in a large-scale web scraping mission you will need rotating proxies, and when you need to complete just a few transactions on a marketplace a static proxy can do this job just fine. So, for instance, a few transactions for rare sneakers online may require some residential static proxies in your arsenal. 

HTTP vs SOCKS Proxies

And for those of you who waited long enough for some technical details “under the hood”, we will now cover the difference in proxies by the supporting protocols. The proxies based on the Hypertext Transfer Protocol (HTTP) are the most common, and even with the introduction of the latest SOCKS5 (Socket Secure) proxies they did not lose their share in the market. 

In terms of functionality, HTTP proxies are commonly used inside of browsers for retrieving information or data scraping and SOCKS proxy servers are used for data streaming or P2P sharing. From the perspective of compatibility, your safe choice will be an HTTP proxy that would support all apps and bots in the market. With a SOCKS5 proxy server, you will need to make sure that your current bot or script will interact with the proxy correctly. 

We have compiled an in-depth comparison report on HTTP and Socks proxies for you to understand the difference in proxy types by protocols while choosing between the two types.  

Free, Shared or Dedicated Proxies

Finally, we often hear about the “free” proxies that you can source online or that come preinstalled with your scraper or bot. Yes, you can certainly start using something for free but be aware that in this case you will become “the product”. In most cases, using free proxies will mean sharing IPs with a multitude of other users and getting banned on lots of sites. And this would be the best-case scenario. In some cases, the free proxies are placed online with malicious purposes of getting access to your personal data by hostile users and all types of frauds. 

Now, when it comes to choosing between shared or dedicated (private or elite) proxies from a proxy provider, you should remember that with a shared IP you will literally share time of proxy use with other customers and a more expensive dedicated proxy will guarantee that your IP will be secured for use only by yourself. I reckon the choice here will be dictated by your willingness to risk while saving a buck or two. By the way, in most cases you can buy private proxies for crypto. So, ask your provider if this is an option. 

What are the most common use cases of proxies?

Proxies can be used for a multitude of purposes. And before we will list the most common use cases of proxies with our preliminary recommendations on types of proxies to use in each such case, we will describe the most frequent generic purposes for using proxy servers. 

Now, proxies can be successfully used for all types of scraping related to e-commerce platforms. You can access and parse info from Amazon, BestBuy or Ebay for your business analytics. In the world of games, you can have special gaming proxy servers that are absolutely irreplaceable, for instance, if you want to access Diablo 2, Minecraft or RuneScape servers with geo-based restrictions. If the source of your business data are social networks and search engines, proxies will help you proceed with fast and reliable scraping of SERP or topical social media (like Instagram, Facebook or Linkedin). 

A whole different league is proxy networks used for buying rare sneakers online and sourcing tickets to the most coveted concerts and mass events. And, of course, you cannot proceed without a good proxy to get access to a streaming service from a banned location or state. 

And now, let’s consider the use case of proxies for business purposes. 

Coupon Aggregators

A horde of sites appeared after the online discount coupons became super popular over the past several decades. All this was made popular by the proxies that helped these myriads of sites collect valuable data from aggregators (like Groupon and SlickDeals) to form super-aggregators of sorts. In this case, most of the time, users engage fast datacenter proxies for scraping. 

Fraud Prevention 

If you are busy making SaaS tools for preventing financial fraud, then your investigations will be virtually impossible for execution without a set of reliable proxies. In fraud prevention you will likely engage residential proxies for geo-specific missions and datacenter IPs for collecting data arrays. 

Lead Generation

The subject of lead generation is so vast that you are likely to use all sorts of proxy servers at different stages of the process. Most of the cases here involve scraping social media platforms (like Facebook, Instagram and Linkedin) and SERP of Google Business. All of the efforts directed towards collecting valuable data on the real decision-makers in the area are closely linked to using proxies apt for the job. General scraping can be performed with rotating datacenter IPs and specific geo-based missions may require residential proxies here. 

Local SEO

Proxies are absolutely indispensable inside local SEO SaaS solutions. Here, you need a good set of geo-specific residential proxies first to generate an accurate image of the current standings of a company in Google or Bing SERP, and to proceed with recommendations on position improvements. The same type of proxies can be used in running research surveys on Yelp and other “yellow page” aggregators to find out the real market exposure of brands and businesses. 

Price Intelligence 

Your success on a marketplace like Amazon entirely depends on the right offers to the right people. To make sure that your pricing reflects your needs as a business you need to conduct some price intelligence missions as a part of your marketing campaign. For this you will need a pool of datacenter proxies (for scraping operations) and residential IPs for local-based intel gathering. 

Real Estate

The tools for viewing, selecting and buying real estate today are becoming extremely sophisticated. You would not believe how many parameters are taken into consideration each time you want to compare some project under development in a highly competitive market area. As you may guess, all of such tools are heavily relying on residential proxies for gathering data and market intel on real estate from select areas of cities and states. 


When it comes to hunting the best candidates for a certain mission-critical position, you need to be armed with the best recruitment tools for managing large chunks of data to generate you a list of the right people for the job. All of this is made possible with a combination of scraping and parsing done with fast datacenter proxies and fine-tuning of your preliminary candidate lists using residential IPs. 

Reputation Intelligence 

When we speak about Reputation Intelligence (or Rep Intel), we normally refer to all activities leading to constructing an adequate image of your business in the eyes of the existing customers or potential investors. if you are in a service business or in a B2C market you cannot avoid getting all sorts of reviews on your products and services. Proxies help you analyze the current standing against the competition and take necessary actions to source remedies in case of substantial PR risks. Here, most of the SaaS solutions employ high quality private residential proxies to do the job. 

VPN Services

As you may know, VPNs are normally viewed as an alternative to proxies for general purposes. Although, there is a significant difference between the two types of products (VPNs change your IP settings system-wide and proxies can be used inside a certain browser or application, among other things), some VPNs rely on proxies to do the job. The most common cases include VPNs for streaming TV, sports events and shows. Here, a VPN service features some residential proxies under the hood. 

Web Scraping Operations

A lot more cases when you need to selectively gather information from the web involve using proxies inside special bots (like ScrapeBox) and custom-written scripts. For instance, when you need to go through thousands of blog posts on one subject in a search for relevant links without getting banned, you will need a set of reliable datacenter proxies powering your scraping bot. 

Consider PrivateProxy Your Trusted Partner

Above we have presented you with definitions of proxies in plain everyday language and considered all the most common use cases of proxy servers, so that you have a better understanding about the functionality and areas of application of our products. Of course, we are always welcoming your feedback on how you are thinking about using proxies in order to cater just the right solution for you.  

Over the past few years we have made a significant leap in expanding our networks and pools of datacenter and residential proxies to meet the requirements of our customers. Right now we are available 24/7 to consider your particular use case and serve you the best proxies for the job. And, what’s even more important, we will always be there for you to address any set up or deployment concerns that you may have along the way. So, start a conversation with us in the chat box below and get ready to enjoy one of the best proxy services in the industry.

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Frequently Asked Questions

Please read our Documentation if you have questions that are not listed below.

  • What exactly does a proxy do?

    A proxy replaces your original IP with its own one. This process is meant to allow you (or your bot) access a website or service that otherwise was off-limits to you. Normally, this is done in order to scrape (or gather) some business information or conduct a transaction on such a website featuring geographical or other access restrictions.

  • How do I decide which proxy is right for me?

    We have briefly identified the right proxies for some of the most common use cases above. But, of course, to find out which type of proxy is right for you, it is better to consult your proxy provider. In our situation, your personal account manager will deliver a set of proxies that would be the best match for the online mission that you are planning to execute.

  • Is it safe to secure proxies from one provider?

    We highly recommend to decide on dealing with a single proxy provider only upon establishing a lengthy successful track record with such a service provider. Once you have enough confidence in this provider, you can decide on moving all your proxy-related business to them. And, of course, benefit from special deals and a personal customer care that you totally deserve.

  • What are the most common types of proxies?

    Proxies can be subdivided into several categories based on their type of origination (datacenter or residential), mode of operation (rotating or static) and protocol involved (HTTP(S) or Socks). Also, we can identify some categories of proxies based on the type of use: dedicated (private or elite) proxies and shared proxies.

  • Are your proxies dedicated?

    Yes, we only provide private dedicated proxies from our unique pool of proxies. Unlike others, we won’t provide proxies from hacked computers (alias “public proxies”) or scrapped proxies from the Internet.

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