Consider this; if there was ever a time when hiding your internet protocol (IP) address is most important, then it has to be now. We live in a world where we are highly dependent on the one thing we cannot seem to protect ourselves from – the internet.

We need the internet for a world of things, yet we cannot afford to be too careless while out there. Protecting oneself by hiding one’s IP is now a priority. And while Datacenter proxies and Residential proxies do a fine job of hiding IP, they still do it differently.

Today, we will look at data center vs residential proxies and how they differ in function and operation.

What is a Proxy Server?

Generally speaking, a proxy server can be defined as a type of gateway or an intermediary computer or software that sits between an internet user and the web. These servers can stand as middlemen making communications with websites and servers on behalf of the client. They separate internet users from the websites they are browsing and often transfer their requests to the target websites. They also return responses from the websites.

So that when you use a proxy, all your traffic to and fro usually passes through it, and this is important for so many reasons.

First, usual proxies from reliable providers come with millions of IP addresses and multiple locations. They can transfer your request using any of these. By so doing, they conceal your IP and location, thereby bypassing blocking and granting you access to restricted servers.

Also, proxies usually act as firewalls offering you and your data extra security and protection. Aside from hiding your IP address so you cannot be easily tracked, proxies also check the traffic for malware and other malicious content.

But proxies do not only benefit clients; they also help the servers by properly allocating traffic and redistributing it to all available servers. This is called workload balancing and is important for preventing a single server from bearing too much traffic and thereby crashing. This, as well as proxies’ ability to use a unique caching mechanism for delivering content, can help to boost a server’s overall performance.

How Does a Proxy Server Work?

The way a proxy works can be summarized in the following words:

  • Whenever you request the web using a proxy, the proxy intercepts and receives that request. Then it modifies it (sometimes) before forwarding it to its destination using its IP and proxy address
  • The communication reaches the server, and the HTML files are extracted and sent back
  • The proxy, once again, intercept the returning response and checks it for malicious contents
  • Once it is certain that the response is safe, it forwards it to you as a web page you can easily view

Main Types of Proxies

There are two main types of proxies for masking IP addresses, and they include:

1. Datacenter Proxies

Datacenter proxies are built and owned by third-party private companies and not associated with internet service providers (ISPs). This is good as it means your data cannot be viewed or traffic influenced by your ISP.

However, this also means they can be easily spotted or flagged down by websites, especially if they are the free version which often comes with few IPs and are generally overcrowded. But the paid types are powerful and can very effective for hiding your IP every time you visit the internet without any chance of getting blacklisted.

2. Residential Proxies

Residential proxies are owned by the ISPs and usually come with addresses that resemble those used by residential buildings. Their IPs, proxies, and locations generally resemble those used by regular internet users. This means you would look more “natural” using residential proxies but at the risk of having your traffic influenced by your ISP. Click here to learn more about residential and data center proxies. 

Differences Between the Main Types of Proxies

The major difference that exists between datacenter vs residential proxies is in their sources of IP and location. The rest of the differences are given in the table below:

FeaturesDatacenter ProxiesResidential Proxies
ReliabilityDatacenter proxies (especially the free ones) are less reliableResidential proxies are more reliable for delivering requests
Chances of Getting BlockedFree Datacenter proxies may be easier to flag down and blacklistedThese are more “legitimate” and hence harder to be blocked
SpeedThey are faster and can achieve a lot in the shortest possible timeResidential proxies are connected to ISP and, therefore, slower
CostThese proxies are the cheapest for performing large-scale operationsResidential proxies are generally harder to get and hence more expensive


There are several proxies for hiding IP addresses; however, data center proxies and residential proxies are the most common. Both can effectively hide your IP address, but they differ in a lot of ways.

If your number concern is reliability, then you may choose a residential proxy. However, if you are more concerned about cost and would like to get the job done more quickly, then data center proxies are your best bet.

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