Most proxy servers are used primarily for firewall tunneling or anonymous surfing. Firewall tunneling is a term to explain how
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users are able to get around or through firewall restrictions that are intended to keep users from objectionable sites. Many people in communist countries and other suppressed countries are trying to get information from the Internet,but some of these governments and dictators are trying to prevent their citizens from educating themselves concerning the rights and privileges enjoyed by the democratic countries. To help these suppressed people get information proxies with large amounts of bandwidth have been setup. Using proxies for tunneling the users can reach the banned sites through the servers that are not also on the restricted or banded list. Some companies,organizations,schools,and homes have also been trying to limit their employees,students,and children from accessing objectionable site. But with the use of proxies it has become very easy to tunnel or get around any restrictions imposed.
It got so bad at my school that I had to band all general Internet access and came up with an approved list of sites and only the approved sites were allowed to be reached using the Internet. This is always an option that can be used to control access to objectionable sites. However,proxies again can be used to get around this policy.
Anonymous surfing is really never very anonymous. Everyone using the Internet has to use a unique IP address that is supplied by the Internet service provider and is tracked and logged. Any government organization can track back through the proxies to reach the original user. This is easy to do since all the IP addresses,access times,websites,and dates are logged and recorded. Most service providers would require a warrant,but in some circumstances the information will be revealed without a warrant.
Proxy servers are also used to cache web pages to speed up Internet access in large organizations. If a news release or other popular information is being reached the server will cache or keep this information in memory so that the next user can retrieve the information from the server memory instead of searching the Internet. This saves considerable time and helps to relieve the some of the Internet bandwidth demands which helps everyone in the organization using the Internet.
Dangers: There is always a danger using the Internet for email,banking,and purchasing products. But if you use a proxy all of the information can be captured and analyzed for passwords,account numbers,and other private information that you would not want someone else to have. Some proxies can be setup just to steal important information.
The website FreeProxyServerList.org has additional information that you might find useful.