Residential Proxy vs. VPN: 4 Key Differences

Khaled Bentoumi

Reviewed By

May 15, 2024
12 min read

Helpful Summary

  • Overview: We compare residential proxies and VPNs to help you decide which IP-masking tool is right for you.
  • Why listen to us: Our mobile and residential proxies are trusted by more than 10,000 users worldwide.
  • Why it matters: Residential proxies and VPNs are designed for different purposes, so it's important to understand their key differences.
  • Action points: Evaluate your specific online privacy and security needs to decide whether a residential proxy or VPN is better suited using the guidance below.
  • Further research: Check out the anyIP blog for more how-to guides and reviews of various IP-masking tools.

Deciding Between a Residential Proxy and VPN?

Choosing between a residential proxy and a VPN can be tough.

They fulfill a vaguely similar purpose, both help mask your IP address and maintain your online anonymity. But beyond that, these are very different tools with very different underlying technologies and use cases.

In this anyIP guide, we’ll help you understand the key differences between residential proxies and VPNs, so you can make an informed decision on which is better for your specific needs.

But first…

Why Listen to Us?

At anyIP, we’ve helped over 10,000 users access reliable, high-quality mobile, residential, and rotating proxies. Our team of experts has extensive experience in the proxy industry, and we’re constantly staying up-to-date with the latest technologies and trends.

So, when it comes to residential proxies and VPNs, we know what we’re talking about. And in this guide, we’ll share that knowledge with you.

Residential Proxies vs. VPNs: An Overview

Residential proxies act as intermediaries between users and the internet. They use IP addresses provided by Internet Service Providers (ISPs) to help traffic appear legitimate. On the other hand, VPNs encrypt users' internet traffic and route it through a remote server, ensuring anonymity and security.

While residential proxies offer authentic IP addresses, making them ideal for tasks requiring real-user interactions, VPNs provide encrypted connections suitable for masking online activities from prying eyes.

What Are Residential Proxies?

Residential proxies essentially allow you to browse the web using someone else's IP address.

To give a more technical answer, when you use a residential proxy, your internet connection is routed through a proxy server that has an IP address assigned to it by an ISP. And since these IP addresses are tied to physical devices and locations (like smartphones, computers etc.), they appear as organic and legitimate to websites.

How do you access these IP addresses? That’s where services like anyIP come in.

screenshot of

We give you access to a massive pool of residential proxies, all ethically sourced from providers with devices that are connected to the internet. This means you can choose a proxy from anywhere in the world, and use it as if you were physically located in that location.

How Do Residential Proxies Work?

We gave a basic explanation of residential proxies above, but let's dive deeper into how they actually work.

Residential proxies are an intermediary between your computer and the websites you access. When you connect to a website, your request goes through the proxy server first before being forwarded to the website. This means that the website will only see the residential IP address of the proxy server.

The data stream looks like this:

  1. You Make a Request: Your computer sends a request to access a website.
  2. The Proxy Intercepts: The request is sent to the residential proxy server.
  3. Borrowing an Identity: The proxy server has an IP address, just like any home computer. It forwards your request to the website, making it look like it came from a regular user.
  4. The Site Responds To the Proxy: The website responds and sends data back to the proxy server.
  5. The Final Handoff: The proxy server then sends that data back to your computer. You get the information you need as if you were browsing from a home computer.

What Are Residential Proxies Best For?

Residential proxies work best in situations where you need to access geo-restricted content or websites while appearing as legitimate traffic.

For example, common use cases include:

What Are VPNs?

VPN stands for virtual private network, they’re a secure and private way to browse the internet that masks your IP address and protects your online activity.

The main difference between a VPN and a residential proxy is that VPNs typically route all your internet traffic through their servers, whereas residential proxies route your traffic through individual residential IP addresses.

Additionally, VPNs typically encrypt your data, making it even more secure and private. This makes VPNs a popular choice for individuals who want to protect their online privacy and security.

How Do VPNs Work?

When you use a VPN, you’re essentially opening an encrypted tunnel between your device and the VPN server. This means that all of your internet traffic is routed through this tunnel and appears to come from the VPN server, rather than your IP address.

Since the data is encrypted, anyone trying to intercept it will only see scrambled information.

What Are VPNs Best For?

VPNs work best when data security is the main concern. They're especially useful for individuals who frequently use public Wi-Fi networks, as these can leave you vulnerable to hackers and unauthorized access.

4 Key Differences Between Residential Proxies and VPNs

1. Source of IPs

Residential proxies use IP addresses assigned by Internet Service Providers (ISPs) to real residential users. This makes requests appear as if they're coming from an actual home internet connection in a specific geographical location.

VPN services use IP addresses that come from data centers. The IPs are owned or leased by the VPN provider, which can assign them to users connected to their network, masking the user's real IP.

2. Anonymity vs. Undetectability

Anonymity and “undetectability” are two different concepts.

VPNs are great for offering anonymity. It’s almost impossible for anyone to trace back your online activities, as long as the VPN service has a no-logging policy. Most don’t offer undetectability, though, it’s immediately clear to most websites and services your IP is coming from a VPN.

Residential proxies offer undetectability. In most cases, websites and services will see the requests as coming from genuine users.

3. Encryption

Residential proxies encrypt when using HTTPs or SOCKS5 connections. Beyond that, encryption isn’t the primary function of residential proxies.

VPNs, on the other hand, encrypt all data that passes through them. This adds an extra layer of security and ensures that any sensitive information you send or receive online is protected from potential hackers or surveillance.

4. Geo-Targeting

Residential proxies give you a ton of control over geo-targeting. Since the requests come from real residential devices, you can choose the location of those devices to match your needs. That means getting as granular as specific cities and carriers.

On the other hand, VPNs offer limited geo-targeting options as they have a set number of servers in specific locations. With some major providers, you might be able to choose a specific city. But for the most part, you’re limited to country-level targeting.

Residential Proxy vs. VPN: Feature Comparison

Feature Residential Proxy VPN
Source of IPs Home ISPs Server farms
Anonymity Blends seamlessly with regular user traffic. Large IP pools reduce detection risk. OPublicly known and shared IPs among many users raise suspicion on websites.
Encryption When using HTTPs or SOCKS5 protocol encrypts all your data. Core function. Protects all data within the tunnel, vital on public networks.
Speed Often close to real user speeds, but can vary based on the underlying residential connection. Usually Faster, Stable
Geo-Targeting Precise targeting options down to the city, even carrier level. Offers country-level selection, some providers with major cities.
Cost Generally more expensive due to IP quality and infrastructure. A wide range of pricing, from budget-friendly subscriptions to premium enterprise-level plans.
Scale/Pool Size Larger, vast geographic spread Usually access to a single or handful of IP addresses


While both residential proxies and VPNs can offer anonymity and privacy protection, they do so in different ways and are suited to different tasks.

Residential proxies are better for tasks that require appearing as a regular user from a specific location, like web scraping or ad verification. VPNs, on the other hand, are more suited for general privacy protection, secure browsing, and accessing geo-restricted content.

Looking for a reliable residential proxy provider? anyIP has you covered with a wide range of locations, fast speeds, and dedicated support.

Sign up today and browse the web with peace of mind.

Khaled Bentoumi

Khaled is a software engineer. He’s been involved in many startups of different sizes. Previously, he founded Data to Page, an AI Programmatic SEO startup. He now handles all the marketing at anyIP.

Get access to millions of residential and mobile IPs
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Article by
Khaled Bentoumi

Khaled is a software engineer. He’s been involved in many startups of different sizes. Previously, he founded Data to Page, an AI Programmatic SEO startup. He now handles all the marketing at anyIP.

Read more
12 min read
How to Set Up Proxies with Shadowrocket in iOS: Guide will show you how to configure the best proxy app for iOS. Follow the steps, and in 10 minutes, you’ll have unlocked a new skill.

12 min read
How to configure proxy on iPhone/iPad

Have you ever wanted to configure a proxy on your iPhone, but you don’t know how? You’re in the right place.

12 min read
How to Set Up SOCKS5 Proxy in Android: Ultimate Guide

n this guide, we'll show you how to use the easy app “Super Proxy” with

Ready for Next-Level Proxy Solutions?

Get started now and experience the ultimate in proxy flexibility, speed, and security.

Unlock the Power of anyIP Today!