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Proxy Servers are used both to get around limitations imposed by a network, as well as to provide a layer of anonymity whilst accessing the web. They do a similar job to the one of a VPN.
Proxy servers function by providing an extra middle step between you and the server you want to communicate with. You (the client) tell the proxy server what web page you want to access, and the server sends a request to that web page and returns the result to you. Compare this to the normal way you would access a website – you would just ask the web server directly for the page you want. This may seem like a silly, unnecessary step – and it does have disadvantages such as increased latency (as your request has to go extra places first), but there can be large benefits to using a proxy server.
Proxy servers can be used to bypass rules set out by, for example, your work network, that prevent you from accessing certain websites. Let’s say Bob works at a company that has blocked the IP address for http://catsinsinks.com/. If bob simply types the url into his web browser he wont be able to connect, because the network he’s on knows not the send the request. However, if Bob tells a proxy server to get the page for him – the network has no idea he’s going to that website – it just sees him connecting to the proxy server’s IP address, but the data between him and the proxy is free to pass. This means Bob can look at pictures of cats without his boss ever knowing.
Another use of Proxy servers is anonymity. When you download a web page using a proxy server, the website thinks the request was sent from the proxy server. Usually, when you access a website they know your IP address, which means they can figure out a variety of useful information about you such as your rough location using geolocation. Using a proxy server, you don’t reveal anything about yourself to the server your accessing – but you do reveal who you are AND what you’re accessing to the proxy server itself. If you don’t trust the proxy you are using then there’s really no point in using one!