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What is a VPN? Understanding virtual private networks

Improved access to fast internet means Australians can do even more online – and a VPN allows you to keep that activity private.

Australia has a strong online culture. More than 13.5 million of us subscribe to the internet in some capacity, and that figure is growing at close to 5% per year.

The nbn™ network can already be accessed by nearly half the nation’s premises, with eight million homes and businesses expected to have access by 2020. And at the same time, the time we spend online is dramatically ramping up.

Did you know that, between us, we have 16 million Facebook accounts, and spend $37.8 billion per year shopping online? We use the internet for travel, to send personal information, run businesses, communicate with family and so much more.

No wonder 80% of Australians see online security as one of their biggest concerns when dealing with digital companies. As the Internet of Things expands, and more of our devices and information become powered by access to fast internet, it’s important to know your options when it comes to online security.

One of the main ways of blocking out unwanted eyes from peeking in on your activities and invading your privacy is through a VPN.

So, on the coattails of Privacy Awareness Week last month, it seems apt to explain a little more about this powerful technology. 

What is a VPN and how does it work?

‘VPN’ stands for ‘Virtual Private Network’ and, while it sounds complex, the idea is actually quite simple. When you interact with the internet, your device sends out information that goes directly from your computer through your retail service provider (RSP) to the website or database you are interacting with. This can leave something of a vulnerability.

If you’re using public wi-fi, you may also be leaving the window ajar for hackers to snoop on your connection.  

A VPN is a private server run by a third-party provider. When you connect to a VPN, you select from the list of servers provided by that company, which can be based anywhere in the world. Once connected, it sets up an encrypted connection between your computer and the private server. It’s only from there, remote of your PC, that the data is forwarded onto its destination.

As such, any undesirable eyes cannot see what is going to or from your computer, they can only see the VPN’s server – the window into your device is locked shut. Further to that, the information you are sending is made to look like it’s coming from a destination other than your own, either somewhere else in your city or, possibly, anywhere in the world.

A VPN is therefore much like a personal security guard. When someone comes knocking, the VPN can provide misinformation about who you are and where you are, and then doesn’t let them past to see what’s inside. To a hacker, that’s a big stop sign.

How does a VPN impact speeds?

Adding a VPN into your connection pathway is going to impact speed. Firstly your data will be encrypted, which takes a little bit of time.

More importantly, the route your data must travel to get from your device to its destination and back again, must detour through this private server. The impact that can have depends on the quality of the VPN and the location of the server, among other factors.

The location of the server, therefore, can have an important impact. If you are in Sydney and you select a VPN’s Sydney server, your speed will be impacted because you are veering off the straightest possible course, but not in a way that will necessarily cause any serious distraction.

However, if that Sydney user selected a VPN’s server in Los Angeles, then the data must travel that distance before heading on to its destination. This is a big detour and is going to have a greater impact on your speed.  

When should I use a VPN?

Some argue that a VPN should always be active to ensure maximum protection. For many experiences, though, there is not necessarily a need to potentially hamstring your internet speed to block out your activities.

For example, if you are streaming Netflix – a service that has a high demand on internet bandwidth – is there much for unwanted eyes to see? Netflix takes responsibility for securing your payment and personal information, so the worst that might happen is that those potentially prying eyes can see you are watching Stranger Things.

When entering personal information, sending sensitive files or doing any number of personal tasks you might want to keep private – this is when many users might activate a VPN.

This is particularly important if you are overseas or out of home and looking to connect through an unknown wi-fi network. While your home wi-fi, or mobile’s 4G, is a known entity, you cannot vouch for the security measures taken by an unknown wi-fi network.

You could also ensure that the site (or app) is using https. You’ll notice a padlock appear on the page, or the beginning of the URL changing from ‘http’, to the encrypted ‘https’. The S stands for 'secure' and means all communications between your browser and the website are encrypted without the need for a VPN.

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