Residential Proxy

Every device on the internet has an address, the IP address. It roughly reveals to the visited website which connection and which country a request comes from. A residential proxy is an intermediary that does not forward a request directly, but first sends it through a private individual’s internet connection. To the website, it then looks as if an ordinary user from an apartment in Hamburg or Lisbon is stopping by. The actual sender remains hidden. “Residential” translates as “belonging to a dwelling” and describes exactly this origin of the address.

Why companies pay for living-room addresses

Large websites defend themselves against automated access. They maintain lists of addresses belonging to data centers and often block them immediately. That’s because behind a data center address there is almost always a program, not a human. Addresses from private connections do not appear on these lists. That is precisely where their market value lies.

For AI companies this has become especially relevant. Language models need enormous amounts of text from the web, and this collecting is called scraping. Anyone who fetches millions of pages using ordinary server addresses gets blocked quickly. Via residential proxies, the same requests are spread across thousands of private connections and barely stand out. Providers advertise pools of several million available addresses.

There are also harmless applications. A company uses it to check whether its advertising really appears in Brazil. A security firm tests whether its brand shows up on fake shops. The technology itself is neutral, its use is not always.

Where the private connections come from

A provider does not own these connections, it borrows them. The usual route is via software on volunteers' devices. Some install an app and receive money or a free subscription in return. While the program runs, foreign traffic is allowed to flow through their line. The provider manages a pool from this and assigns each customer changing addresses.

This is exactly where the problem lies. Many users don’t notice that they are renting out their connection. The notice is tucked into the terms of use of a free app or a browser extension. Investigations have repeatedly uncovered cases in which such programs were secretly bundled in. Whoever is involved is liable in case of doubt: in the event of an attack, the trail initially leads to one’s own connection.

Technically, two modes of operation are distinguished. With rotating proxies, the address changes with every request or after a few minutes. With static ones, it stays the same for longer, which is necessary for logging into an account. Both are usually billed per gigabyte transferred, and prices are significantly higher than those of ordinary server proxies.

In headlines and online shops

In the news, residential proxies mainly appear in disputes. Publishers and platforms sue AI companies because their collection programs circumvent blocks. The technical question of how the requests were disguised is often part of the evidence in such cases. Operators of security systems also regularly report attacks from such networks, because simple blocklists are ineffective against them.

In everyday life, the technology turns up in unexpected places. When rare sneakers sell out within seconds, purchasing programs operating via private addresses are often behind it. The same applies to concert tickets. Price comparison portals use the same tools to correctly capture regional prices.

A common misconception: a residential proxy is not a privacy tool for private users. A VPN, i.e. an encrypted connection to a provider, protects one’s own data while on the move. A residential proxy, by contrast, serves to disguise one’s own origin from the target site. Encryption is not necessarily part of it, and the operator of the foreign connection may be able to see the traffic as well.