What is a proxy? Updated guide to how proxies Work in 2025

Proxies are essential for privacy, bypassing geo-blocks, and running multiple accounts without constant bans. By 2025, they’ve become standard tools for marketers, automation experts, and online entrepreneurs of all kinds. They can be extremely useful, but also frustrating when providers cut corners on speed, stability, or pricing.

In this article, we’ll walk through the basics of how proxies work, what they’re used for, and the key things to watch out for before relying on them.

If you want the full breakdown check out our new Ultimate Guide to Proxies for everything you need to know.

What is a proxy?

A proxy server sits between you and the internet, handling your requests before they reach a website. Instead of showing your real IP address, the site only sees the proxy. This simple setup has big implications: it can give you privacy, help bypass geo-restrictions, speed up certain connections, and make multi-account management possible.

it’s defined by a few key details:

• IP address – the unique number that represents the proxy server.
• Hostname – sometimes used instead of an IP, like proxy.example.com. You can learn more in our guide on what is the proxy hostname.
• Port number – tells your device which “door” to connect through, often 8080, 3128, or similar.
• Username and password – many paid proxies require authentication before you can connect.

By 2025, proxies aren’t a niche tool anymore — they’re part of everyday workflows in marketing, automation, and security. At the same time, the quality of a proxy depends heavily on the type you choose and the provider behind it. A cheap, unstable proxy is often worse than none at all.

Types of proxies

Proxies aren’t all the same — some are cheap and fast, others slow but nearly undetectable. Here’s a breakdown of the main types you’ll run into in 2025:

1. Transparent proxies

These are the lowest level of proxies. They don’t hide the fact that you’re browsing, and websites can still see your real IP address. They’re often deployed by schools, libraries, or companies to filter traffic or store cached versions of websites. For privacy, they’re useless. For control and monitoring, they’re effective.

2. Anonymous proxies

Anonymous proxies hide your real IP address but still make it obvious that you’re using a proxy. They offer basic privacy and can be enough if your goal is simply to avoid sharing your IP with the sites you visit. However, they won’t trick advanced systems, so they’re not ideal for automation or sensitive work.

3. Elite (High-Anonymity) proxies

These are the “premium” class. Elite proxies mask your IP and make your traffic look like it’s coming from a regular user, not a proxy. This makes them harder to detect and more reliable for serious tasks — scraping, managing multiple accounts, or bypassing strict geo-blocks. The downside? They’re more expensive and sometimes slower due to the extra filtering.

👉 Learn more about how they work in our dedicated guide on elite proxies

4. Residential proxies

Residential proxies use IP addresses from real internet service providers (ISPs). Because they look like genuine user traffic, they’re extremely hard to block. That makes them a go-to for social media marketers, sneaker copping, and bypassing region restrictions on streaming platforms. The catch: they’re pricey, and quality varies a lot between providers.

👉 For more details and use cases, check out our article on what is a residential proxy.

5. Datacenter proxies

Hosted in data centers, these proxies don’t belong to ISPs. They’re cheap, fast, and easy to scale, which is why many beginners start here. But platforms like Instagram, TikTok, and Google can flag them quickly, since the IPs don’t look like real home connections. Great for tasks where speed matters more than stealth, bad for long-term account farming.

👉 For a deeper breakdown, check out our full guide on the best datacenter proxies.

6. Reverse proxies

Unlike the others, reverse proxies don’t protect the user — they protect the server. A reverse proxy sits in front of websites and handles traffic before it reaches the actual server. This setup helps with load balancing, caching, and defending against DDoS attacks. If you’re just browsing, you won’t touch these — but if you run a website, you might rely on one.

How does a proxy server work? 

The functionality of a proxy server can be broken down into a few key steps. When you initiate a request, say, to visit a website:

1. Your request: Your device sends the request to the proxy server, not directly to the target website.
2. Proxy processing: The proxy server receives your request. Depending on its configuration and type, it might perform various actions, such as checking its cache for the requested content, filtering the request based on certain rules, or modifying your request headers.
3. Forwarding the request: The proxy server then forwards your request to the destination website using its own IP address. To the website, it appears as though the request originated from the proxy server.
4. Receiving the response: The website sends its response back to the proxy server.
5. Delivering to you: The proxy server receives the website’s response and then forwards it back to your device.

This intricate dance allows the proxy to act as a shield, masking your true IP address and providing a layer of anonymity. It also enables features like content filtering, caching to speed up browsing, and bypassing certain network restrictions. 

To understand more about the technical identifiers involved, you might find our article on What is the proxy hostname particularly insightful.

Key considerations to be aware of

Proxies can be useful, but they’re not without problems — especially if you rely on free or shady providers. Here are the main issues to watch out for:

• Security risks – Many free proxies make money by logging your activity, injecting ads, or worse — stealing your data. Some are flat-out malware traps.
• Slower speeds – Every request goes through an extra server. If that server is overloaded or far away, your connection will crawl.
• No encryption – Most proxies don’t encrypt traffic. Your IP may be hidden, but your data is still exposed on public Wi-Fi or to anyone monitoring the network.
• Unreliable uptime – Free proxies drop connections all the time. Don’t expect stability if you’re not paying for it.

Bottom line: proxies are only as safe and fast as the provider behind them. Stick with reputable services, and don’t treat a proxy as a full security solution — because it’s not.

Legal considerations

The big question: are proxies legal? In most countries, yes — but it depends entirely on how you use them. Proxies are just a tool, and the purpose behind them is what matters.

Legitimate uses include:

• Protecting privacy by hiding your IP and browsing habits.
• Bypassing geo-restrictions on content and services.
• Adding a layer of security against certain threats.
• Ethical web scraping of public data (within site terms and local laws).

Illegal or risky uses include:

• Cybercrime like hacking, malware distribution, or DDoS attacks.
• Copyright infringement (piracy, illegal downloads, etc.).
• Fraud and online scams.
• Breaking site terms of service — e.g., automated scraping where it’s explicitly banned.

Bottom line: proxies themselves are legal, but misuse can land you in serious trouble. Always make sure your activities comply with local laws and the platforms you interact with.

Proxy server vs. VPN

Proxies and VPNs both reroute your traffic through an external server, but they’re not the same thing. The main differences come down to scope and encryption.

👉 For a deeper comparison with real-world use cases, check out our full article on VPN vs Proxy.

For those seeking reliable and secure proxy solutions, our Best proxy providers list can help you make an informed decision.