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What Is a Residential Proxy Server?

Simona Lamsodyte

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Proxy fundamentals

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Residential proxies are household devices that act as internet request relays from one machine to another. Device owners voluntarily convert their phones, computers, and other equipment into residential proxies by installing internet sharing or similar apps.

While the internet is being shared, residential proxies only act as a relay, standing between the source and destination servers. It takes the connection request from the source and forwards it to the destination in its own name, using the residential IP address that’s assigned to the device. No other modifications or actions can or are being made.

How Do Residential Proxies Work and What Are They Used For?

When a user installs an internet sharing application, the device will be able to act as a residential proxy. While the terms of service differ, most such providers enable the device to become a proxy only when the user isn’t actively using it. Users are also monetarily rewarded for any traffic.

These applications are usually owned by a company that’s a residential proxy provider or by an independent entity. If it’s owned by an independent company, they usually monetize their residential proxy pool by selling access to it to other businesses.

At the final stage of the transaction, businesses that need residential proxies purchase access to the pool of IP addresses from providers. They then use residential proxies for various use cases such as travel fare aggregation or web scraping .

Residential proxies are vital for these use cases as the device has its own IP address and location associated with it. A device in New York, USA, for example, will be shown information for that location even if the original source of the connection is from Europe.

In some sense, residential proxies (and most other types) are similar to VPNs, however, the latter are used by consumers while the former are more frequently used by businesses.

Additionally, there are some use cases where locations are less important such as brand protection. These businesses use residential proxies to constantly monitor the web against copyright infringement and similar activities.

Location-based data is not as valuable, however, websites frequently ban various bots, scrapers including. Having a large number of residential IP addresses minimizes the likelihood of getting banned. Even if it does happen, businesses can use the residential proxy network to change IPs and circumvent the ban.

Types of Residential Proxies

As the definition of residential proxies only includes the fact that it can relay requests and is a household device (as opposed to a business-owned server, for example), there are many different types. Here are some common categories of residential proxies:

Rotating Residential Proxies

These are residential proxy services that automatically switch IP addresses upon each request or after a set amount of time or actions. Users usually connect to an endpoint that performs all of these actions according to their settings – rotating residential proxies are closer to a service than a different proxy type.

Rotating residential proxies are most frequently used in cases where maintaining the same identity is not important and ban rates are high. Public web data scraping, for example, is a common use case for these residential proxies.

Static Residential Proxies

Completely the opposite of rotating residential proxies as they maintain the same IP address for a set duration. Static residential proxies are harder to acquire as companies usually have no control over the user’s device. Static residential proxies, therefore, may be sourced from an internet service provider or other companies.

Static residential proxies are often used where maintaining a single identity is important. Managing multiple social media accounts is a classic use case for static residential proxies.

Mobile Proxies

These are residential proxies sourced from mobile devices. Mobile proxies are usually even less prone to getting banned and are considered more legitimate.

They may also be used for data gathering whenever a mobile device may be shown different information. Other than the device, they are functionally no different from regular residential proxies.

Dedicated Residential Proxies

Dedicated residential proxies where the IP addresses are assigned to a single account. No other residential proxy provider users can get access to the same IPs. Otherwise these proxies are technologically no different from regular residential proxies.

Dedicated residential proxies are widely used for most use cases where regular residential proxies are employed. Their counterparts, shared residential proxies, are significantly cheaper, however, they have some major disadvantages.

If people can share the same residential proxy IP addresses for various purposes, it may increase block rates. As such, dedicated residential proxies are often the type of choice if cost savings are not the primary goal.

ISP Proxies

ISP (or Internet Service Provider) proxies are a middle ground between datacenter and residential proxies. An internet service provider can assign a residential IP address to a data center server they own.

ISP proxies have the speed of a datacenter proxy and the legitimacy of a residential proxy, making them extremely valuable. Internet service providers, however, don’t usually provide a lot of ISP proxies to a single company so pools can be relatively small. They’re also often the most expensive proxy server type, so they’re reserved for highly sensitive use cases.

These types of residential proxies are not all mutually exclusive. Sometimes residential proxies may be combined as some are technologically different while others simply offer a service. For example, dedicated residential proxies are just a service offered by a provider – functionally they’re no different from regular proxy servers.

Residential Proxies vs Datacenter Proxies

One of the primary counterparts for residential proxies are datacenter proxies. These do not have residential IP addresses, making them easier to detect. However, datacenter proxies are created in business-owned servers in bulk, making them cheaper and faster.

Proxy type Residential proxies Datacenter proxies
Price Higher Lower
Legitimacy Higher Lower
Speed Lower Higher
Reliability Lower Higher
Pool size Higher Lower

These differences show that the proxies are used for different use cases.

Residential proxies are used where ban and detection rates are high such as SEO monitoring. Datacenter proxies are more useful where speed and efficiency are more important such as website change monitoring or email protection.

Residential proxies work by providing IP addresses to a third party. As such, they simply route internet traffic, making them no different, in a legal sense, from VPNs.

As with any tool, however, proxy servers may be used for various purposes, some of which may be illegal. Therefore, while proxy servers are themselves perfectly legal, you should take care that the way you’re planning to use them is legal.

Finally, there’s no legislation surrounding the acquisition of residential proxies (assuming no hacking is taking place). There are, however, ethical considerations for the acquisition of IP addresses – users should be consenting and rewarded for sharing their devices.

Not all residential proxy providers acquire their IP addresses from transparent companies. While it doesn’t directly affect you, the acquisition of proxy servers should be transparent.


Residential proxies are household devices with IP addresses that are capable of acting as relays for other devices. In simple terms, they take a request from a source and forward it to the destination server.

Having localized IP addresses allow residential proxies to mask the source of the request. As such, the perceived location of the source is changed, making residential proxies extremely useful when accessing geographically-based information.

Additionally, some use cases for residential proxies are data collection activities. When collecting data, websites often ban the IPs of bots, making residential proxies vital as users can keep changing IPs as soon as access is restricted.

Finally, while residential proxies may seem like a relatively small and niche subject, they power a major part of the current internet. Businesses like travel fare aggregators use residential proxies to create their product. Without residential proxies, most of these business models would be impossible.

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Simona Lamsodyte

Content Manager

Equally known for her brutal honesty and meticulous planning, Simona has established herself as a true professional with a keen eye for detail. Her experience in project management, social media, and SEO content marketing has helped her constantly deliver outstanding results across various projects. Simona is passionate about the intricacies of technology and cybersecurity, keeping a close eye on proxy advancements and collaborating with other businesses in the industry.

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