Buy me a coffee. Become a Patron. It assumes that you are a professional PC user and by no means a professional system administrator. Also, you will be able to create as many proxy logins and passwords for your friends and family as you want. I basically assume that your knowledge and background is more or less similar to mine, when I just started learning about Linux.
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On the face of it, it appears that both proxies and VPNs provide the same services. In reality they are quite different tools with very different purposes. A proxy server acts as an intermediary between your computer and any computer you are connecting to. This is done in much the same way as your computer uses its router as a gateway to connect to the internet on your local network. Thus a proxy can be used as a method to hide your public IP address from a server that you are connecting to.
A step by step explanation for non-technical users
Proxies and VPNs differ in nature, although they can provide some of the same services. A VPN routes all of the network traffic on a client computer through a tunnel to some other server computer. No individual application configuration is required. In contrast, using a proxy requires each application to be individually configured to ensure its traffic goes through the proxy. The intent of a VPN is to allow a remote client computer to access network resources in some other location as if it were physically located in the same office. One of those network resources can be access to the internet, which masks the IP address of the remote computer. A proxy is more limited in that it cannot provide access to remote resources, but it can mask your IP address and provide geo-obfuscation services. Almost any type of VPS will work for this.
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