A virtual private network (VPN) serves as an extension of your private network, acting as a router outside your home or business, extending your private network virtually.

Your home network is an example of a private network. Every computer or mobile device in your home is connected to your route, either wirelessly or through an Ethernet cable. All of the computers and devices in your business are probably connected similarly. These are examples of physical private networks. When you send a file to your printer, at home or work, the communication between you and the printer remains inside of your private network, and should not be accessed by the outside world. All of the devices on your private network are given reserved Internet Protocol (IP) addresses that can be used to identify your network.

The most common example of a public network is the Internet. When you connect to a resource on the Internet, your network traffic is directed through your router, and the public IP address associated with your router, not the address you have on your computer, is what is recorded in the log of the resources you visit.

When a VPN is in place, your computer connects to and establishes an encrypted connection with the VPN server whenever you connect to the Internet. This is known as a secure tunnel, through which your Internet traffic is routed, then passed on to the Internet. Because the data is encrypted and encapsulated on its way to the VPN server, your router and ISP pass it on through without the ability to inspect it. Also, because the traffic is sent from the VPN to its ultimate destination, servers on the Internet can see the IP address of the VPN, but not the address of either your home router or your computer. Your VPN acts as an extension of your home network, and as a router outside your home router, extending your private network virtually, which is why it's known as a virtual private network.

You might decide to use a VPN in order to keep your location and Internet Service Provider private. Otherwise, your ISP and your approximate location could be determined from your router's IP address.

A VPN can help you to avoid interception while using a public wireless connection. Because your traffic is transmitted through a direct and encrypted connection to your VPN server, people who share the same public Wi-Fi connection cannot intercept or decrypt your data.

While you are connected to the Internet through a VPN, your ISP, mobile carrier, or local wireless provider are unable to intercept your internet traffic to collect information that might later be sold to marketers. It also prevents them from injecting their own code into your webpages, as some ISPs have been found to have done.

A VPN can be set up so that you can connect to network resources in other private networks. For example, while you are away from your home or office, your VPN can allow you access to the network resources in your private network.

Although early VPNs earned a reputation for slowing a user's connection, a VPN can actually speed up a user's connection with the Internet. Although a VPN does add an extra hop between you and your connection, the fact that your traffic is passed along without being inspected along the way, the adverse effects of the extra hop are likely to be minimal, and because your data is encapsulated, your ISP or mobile carrier is unable to easily deprioritize certain types of traffic, such as streaming video. In other words, a VPN connection is less likely to be throttled.

In order to give the appearance of being faster than they actually are, some ISPs configure their own DNS servers to redirect specific domain names, in effect sending you to a cached copy rather than a fresh one. This is known as DNS hijacking, and it can be prevented through a VPN.

VPN servers can also be configured to block advertising.

These are a few of the ways in which a VPN can protect the privacy of your data and even enhance your online experience. However, a VPN is just a part of what can keep you safe. A VPN encrypts and protects your network traffic between you and your VPN server. Obscuring your home IP address isn't enough to provide complete anonymity, as you can still be identified through tracking cookies and browser characteristics. A VPN can be an important part of your strategy, but it is not the totality of it.

When you run your own virtual private network, you can control who has access to it and what sort of information it logs. You can start it up, shut it down, configure it to meet your needs, and have full control over the level of security you need. Subscribing to a VPN service may be easier, but you sacrifice the control over your virtual network. Because the VPN server routes you, the VPN server sees where you are going. While there are good VPN service providers, having an understanding of VPN functionality can be important.

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