How Does a VPN Work?

How Does a VPN Work Featured Image

How does a VPN work? Given the frequency of reports of data breaches, it’s an important question to ask when it comes to effectively securing your data, staying anonymous online, and defending your business against cyber threats.

Our guide explores how VPNs work, how VPNs use authentication, encryption, and tunneling methods to protect you, and how to choose the best VPN for your needs.

Key Takeaways

  • VPNs encrypt your data and create a secure “tunnel,” protecting your online activities from prying eyes.
  • Authentication, encryption, and tunneling protocols are critical to how VPNs work.
  • While VPNs can impact network performance, factors like server location and encryption level can help mitigate these effects.
  • Advanced security features, such as kill switches and DNS leak protection, add layers of protection to VPN services.
  • When choosing a VPN, consider security, privacy, performance, and ease of use, and opt for paid services for better features.

What Does a Virtual Private Network (VPN) Do?

A VPN is a tool that lets you access the internet through a server operated by a VPN service provider. It ensures that all information exchanged between your devices and the internet is kept safe.

How Does a VPN Server Work?

VPN servers are the intermediaries that manage data transmission between your device and the internet.

Here’s the process:

  • Your VPN software initiates a connection to a VPN server.
  • A secure connection is established – so your device encrypts all the data before it’s sent over the internet.
  • When your encrypted data reaches the VPN server, it’s decrypted and sent to the intended internet destination.
  • The VPN server receives the response from the destination, encrypts it, and sends it back through the tunnel to your device.

To an external observer, your internet traffic appears to be coming from the VPN server’s location, not your own, thus maintaining your privacy and allowing you to access content that may be restricted in your location.

The VPN server’s ability to mask your IP address is one of the key reasons VPNs are so effective in maintaining online user anonymity.

Why Use a VPN?

VPN services secure your internet connection in several ways:

  • Privacy – By hiding your IP address and location, a VPN prevents external parties from tracking your browsing activities.
  • Security – VPNs encrypt your data, which protects it from hackers attempting to intercept it on the public internet.
  • Access – A VPN can bypass internet censorship and geo-restrictions, allowing you to access content from anywhere in the world.

Understanding VPNs – Authentication, Encryption, and Tunneling

VPN connection protocols

A VPN protects your data and keeps your location private through a combination of authentication measures, encryption techniques, and tunneling protocols. Together, these elements create a shield that guards your data from unauthorized access and cyber threats.

Authentication – Establishing a Secure Connection

Let’s look at authentication first. This process verifies the identity of users or devices trying to connect to the VPN server, ensuring that only authorized entities gain access.

There are several methods through which a VPN can authenticate users. Let’s look at three of the most commonly used methods.

1. User Credentials

This is the most straightforward form of authentication. It requires you to enter a username and password before you can establish a VPN connection. The VPN server checks these credentials against its database to confirm your identity.

This method’s strength primarily depends on the complexity of the password and the security measures in place to protect the credentials database from being compromised.

2. Digital Certificates

Certificate-based authentication is a more robust method that uses digital certificates to validate the identities of devices and servers.

A digital certificate is a file issued by a trusted certificate authority (CA). It functions like an ID card, providing a way to associate a public key with an entity’s identity. When a device presents its certificate, the VPN server verifies that a trusted CA issued it and that it’s still valid and hasn’t expired or been revoked.

This method is particularly useful for automated machine-to-machine connections where manual input of user credentials is impractical.

3. Two-Factor or Multi-Factor Authentication (2FA/MFA)

This extra security measure adds a layer of protection beyond a username and password. After the initial credentials are entered, 2FA/MFA requires one or more additional verification factors, which can include:

  • Something the user has – A security token or a mobile phone where a verification code can be sent.
  • Something the user is – An intrinsic aspect of the user, captured with fingerprint scanning or facial recognition, for example.
  • Somewhere the user is – Geolocation verification via mobile device or IP address.

2FA and MFA significantly reduce the risk of unauthorized access. An attacker would still need the second factor to gain access, even if the primary credentials were compromised.

VPNs can use one or more of these authentication methods to ensure network access is tightly controlled. The choice of authentication method depends on the desired balance between ease of use for legitimate users and the level of security needed to protect the network’s resources.

Encryption – Protection of Data Privacy

VPN encryption

Encryption within a VPN is the cornerstone of its ability to secure data. Encryption acts as a robust protective layer, transforming sensitive information into indecipherable code as it travels across the internet, shielding it from unauthorized access and third parties.

VPNs can employ one or more different types of encryption.

Symmetric EncryptionAsymmetric EncryptionHashing

This type of encryption uses the same key for encrypting and decrypting data. Imagine you have a box with a lock and a key. In the VPN world, once your device has established a secure connection with the VPN server, they share a “secret key” – much like the box’s key.

This secret key is used to lock (encrypt) your data before it’s sent over the internet and to unlock (decrypt) it when it’s received.

For instance, when you send a document through the VPN, the document is encrypted on your device using this secret key. It travels securely through the internet and is decrypted with the same key by the VPN server before being sent to its destination.

Some VPNs also use asymmetric encryption. Instead of one key, this type of encryption uses a pair of keys – a public key that can be shared with everyone and a private key that is kept secret.

Think of it as a mailbox with a mail slot (public key) and a locked door (private key). Anyone can drop a letter through the slot, but only the owner with the key can open the mailbox to retrieve the messages.

When you initiate a connection to a VPN server, your device first establishes a secure channel using asymmetric encryption. It uses the server’s publicly available key to encrypt a symmetric key.

This symmetric key is then used for the actual data encryption, as symmetric encryption is faster and more efficient for large amounts of data.

Hashing is a process that takes an input (or “message”) and returns a string of bytes of a fixed size. The output, known as the “hash,” is typically a unique representation of the input data.

Imagine taking a book and turning it into a unique summary or “digest” that’s always the same length, regardless of how long the book is.

In VPNs, hashing is used to ensure the integrity of data. When data is sent over a VPN, a hash is generated from the original data and sent along with it.

Upon arrival, the receiver generates a new hash from the received data and compares it to the original hash. If they match, it’s unlikely that the data has been tampered with in transit.

Combining These Methods

In practice, most VPNs use a combination of these encryption methods to establish a secure connection.

  • Asymmetric encryption is used to safely exchange a key between your device and the VPN server.
  • Once the key is exchanged, the VPN uses symmetric encryption to encrypt all the data you send and receive.
  • Hashing is used throughout the process to ensure data integrity and to authenticate messages, ensuring that the data hasn’t been altered and is from a trusted source.

Tunneling – Creating a Private Network Path

The last piece of the puzzle is how data is sent to and from the VPN via tunneling. The VPN creates a secure “tunnel” that acts as a direct line between your device and the internet, ensuring your data travels securely.

Here’s a step-by-step overview of how this process works:

  1. Data packetization

    Initially, your data is broken down into smaller, more manageable pieces known as “packets.” This is similar to breaking a letter into several envelopes, each containing a part of the message. This makes the data easier to send and manage across the network.
  2. Encapsulation

    Each packet is then encapsulated within another packet, along with additional headers that provide routing information. This process is akin to placing each of those envelopes into a larger, secure package to ensure that the contents remain confidential and are delivered correctly.
  3. Encryption

    The encapsulated data is encrypted, turning it into a code that can only be deciphered with the right decryption key. Imagine if the secure package could only be opened by a machine at the post office, ensuring no one else can access the contents as it travels to its destination.
  4. Transmission

    The encapsulated and encrypted packets are sent through the internet to the VPN server. To anyone intercepting these packets, they appear as unintelligible data.
  5. Decryption

    Once the packets reach the VPN server, the outer packet is removed, and the encrypted data inside is decrypted using the appropriate decryption key. It’s as if the machine at the post office opens the package, revealing the smaller envelopes and the message inside.
  6. Delivery

    The original data packets are then sent to their final destination on the internet, such as a website or online service.

This tunneling process effectively hides your data from anyone else on the network. It prevents your ISP, hackers, or even government surveillance groups from seeing what you’re sending and receiving.

VPN Tunneling Protocols

VPNs use different protocols to perform this tunneling. The earliest protocols were slow and insecure, and the technology has significantly improved since then.

Tunneling protocols define how your data is handled and transported through the tunnel. Each protocol has different features and methods to ensure your data’s security and integrity. Choosing a protocol will depend on your priorities – whether you want speed, security, compatibility, or ease of use.

Here’s how some of the most common VPN protocols work:

Point-to-Point Tunneling Protocol (PPTP)Layer 2 Tunneling Protocol (L2TP) paired with IPsecOpenVPNWireGuard

One of the oldest VPN protocols, PPTP encapsulates data packets and creates a tunnel but relies on protocols like Generic Routing Encapsulation (GRE) for encapsulation. It’s relatively fast due to its basic encryption, but it’s considered less secure than other protocols.

L2TP doesn’t provide encryption, so it’s often paired with IPsec for security. Think of L2TP as creating the tunnel and IPsec as the guard encrypting the data and checking for integrity. Together, they offer a higher security level than PPTP.

OpenVPN is a versatile open-source protocol that provides strong security. It uses the OpenSSL library, which supports many cryptographic algorithms, allowing for a customizable and secure VPN setup. OpenVPN is like a reinforced tunnel with advanced locks, providing both flexibility and security.

WireGuard is the newest of these protocols and is designed for simplicity and performance. It uses modern cryptographic techniques and aims to be more straightforward to configure than other protocols. It’s effectively a state-of-the-art tunnel with high-tech security features that are robust and easy to manage.

The Impact of VPNs on Network Performance

NordVPN's dashboard, connected to VPN
NordVPN dashboard

While VPNs provide enhanced security and privacy, they can also impact network performance.

When you use a VPN, your data takes a more circuitous route than it otherwise would, as it travels to the VPN server before reaching its destination. This can result in reduced data transfer speeds, as the encryption process requires additional computational resources and time.

The physical distance between you and the VPN server can also increase the time it takes for data to travel, which is referred to as latency.

These changes might not be noticeable for general browsing, but the impact can be significant for activities that require real-time data transmission, such as online gaming and video conferencing.

Factors Affecting VPN Performance

Several factors can influence the performance of your VPN connection:

  • Server location – The closer the VPN server is to your physical location, the faster and more reliable the connection will be.
  • Server load – The number of users connected to a VPN server can affect its performance. A heavily loaded server will likely see slower connection speeds.
  • VPN protocol – Some protocols are faster than others. For example, WireGuard is known for its high-speed performance when compared to older protocols like PPTP.
  • Encryption level – Stronger encryption can provide better security but may also slow down the connection. Choosing the right level of encryption for your needs can help balance security with performance.
  • Network conditions – The quality of your internet connection will also affect VPN performance. Poor internet service can lead to slower speeds and higher latency, regardless of the VPN.

Selecting the right server location, adjusting the encryption level, and choosing an appropriate protocol are all steps you can take to enhance your VPN experience.

Security Measures and Considerations

VPN kill switch

VPNs are designed with security at their heart, but many also include features that provide additional layers of protection to ensure your online activities are as secure as possible.

VPN Security Features

Beyond basic encryption and tunneling, VPNs often include the following security features, and the most secure VPNs will generally offer all of them:

  • Kill switch – This feature immediately disconnects your device from the internet if the VPN connection drops, preventing data leakage. A kill switch is significant if you handle sensitive information, as it protects against accidental exposure.
  • DNS leak protection – This ensures that all DNS requests are routed through the VPN tunnel, preventing your ISP or other DNS providers from seeing your browsing activities. DNS leak protection guards against a common vulnerability where requests could reveal your browsing history, even when using a VPN.
  • Split tunneling – This allows you to choose which traffic goes through the VPN and which uses your regular connection. This can be helpful when accessing local network devices while using the VPN.
  • No-logs policy – Many VPN providers guarantee that they don’t store any logs on your activities, so they can ensure your privacy.

Potential Vulnerabilities

While VPNs are a powerful tool for online security, they’re not immune to vulnerabilities. Like any software, VPNs can have vulnerabilities that hackers could exploit.

Some VPN protocols have known weaknesses that could be used to compromise a connection. Or, if a hacker intercepts the communication between your device and the VPN server, they could potentially decrypt your data.

Regularly updating your VPN software should fix known vulnerabilities. Additionally, opt for VPNs that use modern, robust protocols, like OpenVPN or WireGuard, and select a VPN service with a strong security and transparency track record.

Choosing the Right VPN

Selecting the right VPN provider is important for ensuring your security and privacy online. Consider the following factors:

  • Security – Look for strong encryption standards and additional security features like kill switches and DNS leak protection.
  • Privacy – Choose providers with a strict no-logs policy that operate from countries with favorable privacy laws.
  • Speed and performance – Assess the impact on your internet speed and choose a VPN with a large server network for better performance.
  • Server locations – Ensure the provider has servers in the locations you want, particularly if you need to bypass geo-restrictions.
  • Ease of use – The VPN should have user-friendly interfaces and customer support for troubleshooting.
  • Compatibility – Check if the VPN supports all your devices and platforms. If you’re looking for the best VPN for a router, for example, your options may be more restricted around specific services and protocols.
  • Price – Free VPNs can be tempting, but they often come with limitations in terms of speed, data, and security. Paid VPN services generally offer better security, features, and support.

Some of the top VPNs on the market include:

VPN Service Cheapest Monthly Price Free Version Simultaneous Devices Server Count Server Locations Device Compatibility
ExpressVPN $8.32/month (annual) N/A 8 3,000+ 105+ Windows, macOS, Linux, Chromebook, iOS, Android, Amazon Fire TV, Android TV Systems
PureVPN $1.97/month (two years) N/A 10 6,500+ 88+ Windows, MacOS, Linux, Android, iOS
NordVPN $3.79/month (two years) N/A 6 5,900+ 60+ Windows, MacOS, Linux, Android, iOS, Consoles, Firestick
Surfshark VPN $1.99/month (two years) N/A Unlimited 3,200+ 100+ Windows, macOS, Linux, Android, iOS, FireTV

Summary – How Do VPNs Work?

VPNs protect your data by routing it through a secure server, creating a private network even when using public internet connections. They employ a combination of authentication methods, robust encryption techniques, and advanced tunneling protocols. This ensures your data remains secure and confidential.

VPNs also mask your IP address, bolstering your online anonymity. By doing so, they safeguard your digital footprint from potential cyber threats and help maintain privacy. As a result, VPNs are invaluable tools for secure and private internet browsing.

How VPNs Work FAQs

Does a VPN hide your location?

Can the VPN owner see your history?

Will a VPN stop hackers?

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Richard Sutherland
Technology Expert
Richard Sutherland
Technology Expert

Richard brings more than two decades of computer science, business operations, and full-stack development experience to Techopedia. A Computer Science graduate and former Samsung IT support manager, Richard has taught courses in Java, PHP and Perl, and created code for the public and private sectors. A prolific B2B and B2C tech writer, Richard has worked for Samsung, TechRadar Pro, and more.