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The Truth About Premium Proxies, Data Scraping and Residential Proxies in 2024

We’re not fans of proxy servers. But what is a proxy server?

Recently, we’ve spilled a lot of digital ink explaining why free proxy servers in particular are a bad idea. If you’re looking to mask your web traffic to maintain your privacy and anonymity online, you’re way better off checking out a VPN.

In case you missed it: since a free proxy server doesn’t encrypt your web traffic, it’s like a plank of plywood laid over a massive security pothole. Aside from leaving you completely visible to third parties, free proxies slow down your connection, and often fail to bypass geoblocks.

Worst of all, many of them are maintained by shady individuals who can add whatever malware they want onto your traffic. That’s why Tor, one of the best-known free proxy networks, is blanket-blocked by most upstanding websites.

So… Are Premium Proxies Better?

After reading all this, many of you might have reached the conclusion that proxies must be better if you pay for them.

That’s a reasonable line of thinking. Premium products have to be better, or nobody will pay. And if they make money from their customers, they don’t have any incentive to steal your data or turn your computer into an adbot.

Or so you might think. The awful truth about premium proxies is: they’re not for you.

Businesses don’t put together extensive lists of premium proxy servers so they can sell them to the public. They sell them to other businesses.

You read that right. Premium proxies have far more to do with corporate espionage than they do with keeping you safe online. While many people still think they’re a security product, premium proxies are most often used to bypass firewalls.

Today, we’re going to tell you the whole truth. Welcome to the unauthorized biography of premium proxies.

What Is a Proxy Server?

The internet is an enormous collection of digital devices that are all capable of talking to each other. Anything visible to one device can theoretically be seen by all of them.

If you just said, “Wait, that’s a massive privacy risk!” then congratulations — you’re smarter than three-quarters of the people online right now.

The entities with the best view of everyone’s web traffic are internet service providers (ISPs), the ones allowing people to get online in the first place. It’s as though to buy anything, you have to tell the whole grocery store, no matter how embarrassing it is.

“I’d like one toilet plunger, please.”

When we talk about seeing what “you” do online, what we’re really describing is your IP address, a unique fingerprint that identifies the device you’re surfing the web on. If third parties like your ISP can’t see your IP address, you’re effectively invisible.

That’s the theory, anyway. Specifically, that’s the theory proxy servers run on.

A proxy server is an extra stop your internet connection makes before reaching the servers belonging to your ISP, and from there it continues to Google or wherever else you’re going. If anyone traces the connection back, they’ll see the proxy server’s IP address, not yours.

Sounds great, right? Not really. The spanner in the works is a little thing called encryption.

What Is Encryption?

Encryption sounds like a cool thing that secret agents do. And it is. But it’s also a basic safety precaution that can mean the difference between a secure connection and an open wound.

At its most basic level, encryption is the process of converting data into what’s apparently gibberish, then converting the gibberish back into data once it reaches the intended recipient.

Imagine you write out a message, convert every letter into a corresponding number, and pass it to your friend. Separately, you pass them a list of the numbers that represent each of the letters. Using that key, your friend decodes the message.

Boom: encryption. As long as you and your friend are the only ones with the key, nobody will be able to read your secret messages.

“Be advised: hot guy in row 3. This message will now self-destruct.”

The exact same thing happens online (though the encryption algorithms are a lot more complicated). When you submit a search through Google, your search is encrypted immediately, then decrypted once it reaches Google’s servers. If anybody tries to peek at your search in between, they’ll just see meaningless characters.

Here’s the catch: Google has the key. They can see what you search for, sell that data to advertisers, or leave it in the open for hackers to find.

Your ISP can see you as well. They can’t read your search queries, but they can see what domains you go to. However, if you had a way to encrypt all your browsing requests before you even reached your ISP’s server, then nobody would be able to trace them — not your ISP, not Google, and probably not even the NSA.

Guess what gives you that pre-connection encryption? A VPN.

Guess what does not? A proxy server — no matter how premium.

Without encryption, it doesn’t take a lot of work to trace your proxy server back to your actual server, breaking through your last layer of security.

Premium Proxies vs Free Proxies

In the interest of being thorough: yes, for the individual user, there are some non-trivial differences between premium proxies and free proxies.

Basically anybody who owns a server can turn it into a free proxy and slap it online for others to use. There’s no certification required.

A free proxy server could be run by a reputable service, like those offered by HideMyAss and Those companies, at least, own all their own servers. But other free proxy networks are run by volunteers, like the nodes on Tor. They could be poorly maintained, or even riddled with malware — there’s no way to tell.

Because premium proxy servers charge money, they’re held to higher standards. With a premium proxy, you can probably be confident that you’re not running your DNS requests through some Slovakian virus basement.

Slovakian Virus Basement was our alt-metal band in college.

Note that we said “probably.” There’s still a possibility that a premium proxy could infect you. You just have a much better chance of success.

Yet if you look for premium proxies online, you’ll find articles extolling the best premium proxy services. Names like Smartproxy, Lime Proxies and Oxylabs will come up often. Plenty of proxies get good reviews and seem perfectly trustworthy.

The curious thing, though, is that they’re always referred to as “residential proxy services” or something similar. Which begs the question: why does being residential matter?

Who Uses Premium Proxy Servers?

Premium proxy servers are integral to a business practice called web scraping.

Web scraping isn’t just for businesses. At heart, scraping is the act of gathering data from a website faster than a human could do it by reading through and taking notes. Scraper programs go through a web page, extract all the useful values, then present them in a readable form such as a spreadsheet.

Imagine a SparkNotes book written by a robot.

The business applications of web scraping are endless. Bloggers scrape the top Google search results to see which keywords are doing best. E-commerce retailers scrape their competitors’ websites to find out what they’re charging. Stockbrokers scrape data to predict the future of the market.

You’ve probably done it, too. If you’ve ever used one of those apps that skips the boring eight-page story on a recipe blog, you too know what it is to scrape.

However, businesses run into obstacles when scraping on a large scale. No business wants another business scraping their website. Not only does it give their competitors a data advantage, but too many scrapers operating at once can slow down a website for its human visitors.

Many corporations issue blanket bans on all IP addresses associated with other corporations. If you’re getting online from Walmart corporate headquarters, there’s a good chance you won’t be able to see at all.

How could Walmart get around this? As with so much of the internet, the answer is lying.

How Residential Proxies Work

Premium proxy services like Oxylabs and Smartproxy sell residential proxies — IP addresses associated with private homes, rather than corporate centers. The owners of these IP addresses consent to let the proxy service use their device when it’s idle. It’s one of several ways to get paid for your computer’s unused processing power.

In plain English: you shut off your laptop at bedtime and plug it in to charge up overnight. After you go to sleep, some corporate rando jumps on and pretends to be you, so he can undercut what is charging for tube socks.

Premium proxy brokers usually offer more than just residential IPs. You can also get a datacenter IP, a cheaper option for penetrating less-sophisticated security, or a mobile IP —  the rarest and most powerful proxy choice.

And yeah, the entire thing is shady as hell, especially if it’s a large corporation punching below its weight class. It strikes us as an online version of that episode of The Office where Michael and Dwight destroy a small family business for no good reason.


Let’s Talk Security, Again

Furthermore, you’ll notice there’s one thing we haven’t mentioned at all in this entire section: security for the proxy user.

Simply put, a premium residential proxy IP address has nothing to do with security, except when it comes to bypassing other people’s. With no encryption, it’s not too hard for a webmaster to follow one thread back to its source and find out who’s scraping their data.

But the webmaster can’t do anything with that information. The proxy network is totally decentralized — to block it, they’d have to block everybody. All they can do is contact the data scraper and politely ask them to stop.

The likely result.

Are There Any Good Premium Proxies?

Absolutely. They’re called VPNs.

A VPN, or virtual private network, is a network of encrypted proxy servers that can only be accessed by subscribers. Instead of buying processing power from privately owned servers, a reputable VPN company owns all its own servers.

And yeah, there are some disreputable ones. We once reviewed one that gave a fake address for its corporate headquarters. Outside of those, though, even the weakest VPN will serve you better than a premium proxy server.

Why VPNs Are Better

The biggest reason is that drum we keep banging: encryption. Your requests are encrypted before they leave your device, so neither your search engine nor your browser nor your ISP can violate your privacy.

There’s still one third party that can: the company operating the VPN. However, the best-reviewed VPN services (like ExpressVPN, NordVPN and Surfshark) are used by millions, so they’re under continuous scrutiny.

If one of them was making improper use of customer data, it would be a major story. If you use a well-reviewed VPN service, keep an eye on the news, but otherwise, trust that their privacy policies tell the truth.

Most VPNs try to place servers in as many parts of the world as possible, in order to cater to the widest range of potential customers. They also focus on maintaining as much connection speed as possible, and on building friendly UIs, so they can serve people other than the dorks who write about online security for a living.

Most of them cost money — hence the term “premium”  — but several, such as Windscribe, TunnelBear and, offer free plans.

The existence of reliable free VPNs demolishes the last argument for an individual to use a premium proxy. You could pay a rock-bottom price of $2.50 per month for a premium proxy, and come out less secure than someone who paid $0 per month for a VPN.


Our goal in this article isn’t to make you feel stupid for considering a premium proxy server. It’s an easy mistake to make. Many powerful people have a monetary interest in the public misunderstanding their online security.

We’re not mad at the customers who use proxy servers instead of VPNs. We’re mad at the proxy providers for promoting their service as a complete security solution, and at the data-scraping companies who use them to take advantage of security loopholes.

VPNs aren’t perfect, either. But they’re one of the few security options that’s both trustworthy (sorry, Tor) and on the little guy’s side.

If you’ve used premium proxies for any reason, or if you’ve ever sold your processing power to a proxy company, we’d love to hear your story in the comments.

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