What is a Proxy Server and How Does it Work?

Many of our daily tasks are online, and chances are you read these words on the internet too. But most of us don’t stop to consider how the web infrastructure works. Proxy servers are a part of the puzzle, especially if you aim to increase privacy or collect data in large quantities.

Defining proxy servers

A proxy server (or a proxy for short) is a server, or any other device, acting as a getaway between users and the internet. Often, it is called an “intermediary” because it separates users and the web pages they visit. The primary purpose of proxy servers is to hide the original IP address of a user.

IP stands for “Internet Protocol“; simply put, it is a collection of rules governing how devices connect to the internet. In essence, connecting to the web entails sending and receiving data packets and additional information about the sender.

Supplemental information is called the header, and it includes the IP address. It is a string of numbers, such as ‘’, which identifies every device and allows the receiver to respond.  For example, by sending the data needed to load a website.

But IP addresses give away more information than you might want. IP-related information includes your approximate physical location and the name of your internet service provider (ISP). Knowing it allows websites to track your online activity or target content according to where you are.

proxy server

How do proxies work?

We can think about an IP address as a return address for ordinary mail. Without it, no receiver or post office will know where to send you responses. Communication is impossible without a home address, but you don’t have to give yours.

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Just like your mail can be delivered to a neighbor or your workplace, your web data can be sent to a proxy server first and only then routed to you. Since proxies have an IP address, the proxy IP will be visible to websites instead of yours.

In theory, if you are really resourceful and tech-savvy, you could set up a proxy server yourself. But it is an unsustainable solution as good performance requires quality infrastructure and 24/7 maintenance. Most private users and businesses subscribe to a service provider that supplies them with IPs. An excellent example of a top-tier service provider would be Oxylabs, but there are many more out there.

However, not every proxy server is the same and can achieve different results in terms of anonymity, speed, the origin of IP addresses, access points, and more. So to further understand proxies, we must look into different types.

Different types of proxy servers

Let’s start by differentiating proxies by how they connect to the internet and source their IP addresses:

  • Residential proxies are tied to a physical device and receive their connection from ISPs. They can connect to the internet just like any other user would. 
  • Datacenter proxies are created virtually in bulk and aren’t verified by ISPs. They access the web from well-maintained and high-end data centers.

Datacenter proxies are faster and cheaper, while residential ones are ordinary-looking and more difficult for websites to block. The choice here depends on your budget and what you set out to accomplish. Some tasks might require more speed, while others need increased legitimacy.

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The price of proxies can be reduced when multiple users have access concurrently. However, shared proxies can slow down if the user count or bandwidth load increases. Dedicated proxies, although more expensive, avoid such issues by being accessible only to one person at a time.

Not all proxies are equal in terms of anonymity, and some are designed with the opposite purpose in mind.

  • Transparent proxies inform the websites that they are proxies and can even forward the original IP address. They are used by local networks (in libraries, cafes, etc.) to filter content and increase security.
  • Anonymous proxies don’t identify as intermediaries and don’t pass the original IP address over. They are more common and something most of us look for to ensure privacy.

Our discussion of proxies so far applies to one type – forward proxies. They are used for connecting to the internet for routing outgoing requests. Reverse proxy is an alternative type that servers use to filter incoming requests. 

A reverse proxy hides the server’s IP, thus increasing security. Forward and reverse proxies cannot be used interchangeably. They are different proxy services, reverse ones being a more specialized and less popular option. Forward proxies are more familiar to ordinary users and have more applications.

Where to use proxies?

The most basic use of proxies is anonymous browsing, as you can simply set them up in your PC or browser settings. However, proxies have much more potential, and in some cases, you might be better off using alternative options, such as a VPN, for browsing.

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Proxy servers can increase the cybersecurity of websites. Having them makes it more difficult for attackers to enter your network as it must go through a proxy. It is common to set up email protection in such a way that a proxy would filter all the spam and malware.

Perhaps, the most common and beneficial use of a proxy server is data collection online. Proxies enable web scraping – the process of using automated bots to collect and extract web data. What it would take days for a person to copy, a scraper bot can achieve in seconds.

Proxies are essential here since websites are imposing geo-restrictions and tend to block the IPs of those who scrape. A good proxy service removes all of those barriers and doesn’t slow the data downloads. The information you acquire can be used in many ways – here are some examples:

  • Market research
  • Price investigation
  • Brand protection
  • Ad verification
  • SEO monitoring


Proxy servers act as intermediaries, allowing you to connect to them first before reaching the internet. There are many different types for various needs, and I’m sure you’ll find one that fits your needs.

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