SOCKS5 Proxies Vs Virtual Private Networks: What’s the Difference?

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With many small businesses becoming primary targets of cyber attacks, online security is becoming a pressing issue

If you've decided to invest in your company's cybersecurity, that's certainly a good start. But with so many options out there, what's the best choice?

Business security consists of many layers. A Firewall inspects incoming traffic for malicious elements.

An Anti-Virus will monitor all activities inside of the network, identifying and removing malware.

Additional cybersecurity software like secure Cloud storage, business password managers, and identity theft protection programs all have specific purposes.

However, VPNs and proxies are the most common mentions when discussing business cybersecurity.

This article will discuss the essential aspects of SOCKS5 proxies and Virtual Private Networks (VPNs) and their use cases in the business environment

Ultimately, we want to see which is a better investment for your company, depending on what you need in terms of online safety and what you get in return.

What is a SOCKS5 proxy server? 

To explain what SOCKS5 proxies are, we must first say a few words about proxies in general. Essentially, a proxy is an intermediary between the user's device and the Internet. 

SOCKS5 Proxies Vs Virtual Private Networks What's the Difference

A proxy relays your internet traffic through an additional server, creating a safer connection between you and the site you want to visit. It works on the application level and has no encryption.

That's proxies in a nutshell. Though there are many types of proxies, all of them are based on the same concept as VPNs – they take your IP address and replace it with a different one.

That's what ensures increased anonymity and keeps your sensitive data safe from prying eyes.

Exposing your unique IP address poses several threats. Firstly, hackers can target this IP address with malware or DDoS attacks to bring your network down.

Simultaneously, IP addresses can be linked to a genuine geographical location. Remember that hacking often involves social engineering.

If cybercriminals know your real address, they can pretend to be janitors or electricians to enter the premises and attempt to install viruses.

SOCKS5 is a newer generation of proxies with features that older versions can't offer. Namely, a SOCKS5 proxy relies on a Secure Socket Shell (SSH) protocol, which can only be accessed through verification.

Since proxies lack encryption features by default, having this additional layer of security around your data is more than welcome – especially in a business environment.

SOCKS5 proxies provide three user authentication methods:

  • Username/password authentication – this method requires providing login information to access the server;
  • GSS-API authentication – your device and the proxy server uses operating system-level authentication to verify your identity;
  • Null authentication – you can connect to the SOCKS5 server without restrictions.

Some may find the lack of encryption troubling, but it enhances several proxy performance criteria:

  • There's no data exchange slow-down.
  • Some older devices cannot handle modern encryption algorithms and will start lagging on a VPN connection.
  • Some business operations do not require online anonymity, rendering encryption useless.

What is a virtual private network? 

A virtual private network is another type of intermediary between a user's device and the Internet. VPNs route traffic through additional servers and conceal your IP address like proxies. 

What is a virtual private network

However, VPNs also encrypt your data flow with additional encryption algorithms, making them somewhat slower but much more secure. By doing so, they create an anonymous tunnel from your device to the VPN server to the target destination. 

This way, they ensure that nobody – including your ISP, target websites, and hackers – can monitor your browsing activities or intercept your data.

The lack of encryption on proxy connection is the most important difference between these two technologies. Encryption means outside observers can't see, read, steal, or modify data in transit.

However, it's also crucial to note that encryption and decryption make VPNs somewhat slower than proxies and unsuitable for specific business operations that require maximum connection speed.

Furthermore, there are fewer types of Virtual Private Networks. Their capabilities and features, as well as their ability to keep you anonymous and ensure data confidentiality, vary from vendor to vendor.

For example, some VPNs log user data posing a significant threat to online privacy. Even worse, several VPN providers were caught collecting user data and losing it to a cyber thief, jeopardizing the VPN's reputation. 

Currently, VPNs are moving towards more general online security and further away from concrete business needs.

For example, some advanced providers have developed real-time online threat protection, coming close to an Anti-Virus or a Firewall. 

Another example is a data-breach scanner, which also holds no inherent value for several business operations.

What’s more, these otherwise useful features can interfere with some business operations requiring a free online data flow.

If you don't evaluate when and what you require VPN protection, you will soon find yourself switching the VPN on and off, slowing you down and decreasing online safety.

In any case, a VPN works on a device level. Though this is a good security measure, it's often a hurdle when you multitask applications with various anonymity requirements.

When choosing a VPN service, we strongly recommend looking for a split-tunneling feature

It allows the selection of applications that can bypass the VPN connection (for example, those that require your real geographical location) while others work over an encrypted VPN tunnel.

Which is better for your business – SOCKS5 or VPN?

So, which is better for your business? That depends on what kind of business you're running and why you need a proxy or VPN in the first place.

Which is better for your business – SOCKS5 or VPN

Let's not forget SOCKS5 is not just any proxy. It's one of the best types regarding security, speed, and versatility. Let's see what each solution can do for performance, data privacy, business safety, and related business operations.

  • Proxies are reliable when bypassing geographical restrictions and firewalls, making them an excellent aid for competitive and market research, ad testing, and data scraping. Residential and rotating proxies, which often use a SOCKS protocol, are especially helpful in this regard. 
  • In addition to being effective at unlocking restricted content, proxies can also block access to specific websites and blacklist them. Many businesses use proxies to limit their staff's access to the Internet to prevent the accidental leaking of sensitive data. Simultaneously, team managers can block access to specific time-wasting websites during working hours to increase employee productivity.
  • Speed is another advantage of fully developed SOCKS5 proxies. A VPN encryption will slow you down if you need to upload and download significant volumes of data. Of course, it provides reliable online anonymity features, but sometimes that is unnecessary. Furthermore, even though SOCKS5 proxies do not encrypt your traffic, they offer a verification protocol that minimizes threats.
  • If there are a lot of remote workers on your team, you should probably not compromise privacy for speed. On the other hand, having VPN encryption means little to nothing if anyone can connect to your server. SOCKS5 proxy won't encrypt your data, but it will reserve access to your server for verified users.
  • Your choice may also depend on whether you need protection for just one program/application or an entire system. Both options have their strengths and weaknesses, so that's entirely up to you and your operational habits. If you prefer flexibility, a proxy might be a better fit.

It's worth mentioning that VPNs have an advantage regarding Covid-19 introduced Work From Home policies.

Cybercriminals quickly shifted their attention to unsecured home networks, attacking them in hopes of reaching corporate intranets.

Cybercriminals quickly shifted their attention to unsecured home networks

The first VPNs were primarily developed for safe remote access to faraway networks, and this demand surged during the lockdown.

Business-oriented VPNs (different from individual consumer VPNs) establish a secure tunnel between employees' devices and the company's network and use additional authentication to grant them access.

That involves (most often) providing the user with a static IP address trusted by the company's network.

But most importantly, additional encryption protects against Man-in-the-middle attacks and third-party data surveillance, protecting confidential business data.


Data encryption is of utmost importance and forms the basis of online security. However, regarding business needs, that's not always required.

Furthermore, SOCKS5 proxies provide security features without sacrificing speed, but you must decide which operations do not require privacy and what's best hidden. 

Proxies also give you more control, providing more customization options. Business operations like market research, price comparison, or data scraping require rotating IP addresses, a feature that most VPNs lack.

VPNs share their servers across multiple users, which increases their privacy but restricts tasks that require a private server.

To summarize, both of these technologies have different and excellent use cases, with SOCKS5 proxies providing more freedom for business needs and VPNs providing robust data protection when required.

About the author 

Peter Keszegh

Most people write this part in the third person but I won't. You're at the right place if you want to start or grow your online business. When I'm not busy scaling up my own or other people' businesses, you'll find me trying out new things and discovering new places. Connect with me on Facebook, just let me know how I can help.

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