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So I went over quite a lot of topics here and on the internet.. but I still can't seem to completely understand this issue. How secure really are services like proxies, VPN or VPS?

VPN is promoted everywhere as being safe. Proxies have different levels of anonymity.

But is there a possibility, that a VPN provider would have something like Wireshark running on the machine to track all the traffic? Would you be watchful using any of the above services for online payments (paypal, credit card) ?

I understand that (if configured correctly) the chances of a 'man in the middle' can be quite low. But as I said, what if the provider himself is interested in violating the user's privacy?

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You are absolutely correct there is no real way to know with certainty that the provider is not monitoring you. This could either be purposefully or due to an unnoticed compromise. A VPN service logging your traffic would not be able to necessarily break the encryption used for a web page. They can man in the middle your traffic, but unless they can exploit a weakness in the protocol or encryption, they are unable to see the encrypted data. They would know you went to the site, but not be able to see your password or any other details.

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What protects financial (or other sensitive transactions) that you make on the web is not a VPN or proxy, but HTTPS and TLS. These, used properly, secure the transmission of the data down the channel all the way from your web browser to the web server and back. Nobody in between, including your VPN provider should be able to access or modify this traffic. (Unless you install a trusted root certificate from the VPN provider onto your machine, in which case all bets are off.)

What a VPN does for you is to protect otherwise encrypted traffic (HTTP traffic, for instance) between the VPN client (your computer) and the VPN provider. Not only can the VPN provider monitor this traffic if they so desire, but anybody between the VPN provider and the server you're communicating this with can monitor it as well.

So, generally speaking, it's not necessary to worry about HTTPS traffic, regardless of whether you're using a VPN or not. It is necessary to worry about insecure traffic if it's sensitive, also regardless of whether you're using a VPN or not. All the VPN buys you is a secure channel for all traffic from your client to their network, no further.

  • I can't upvote because my rep is too low, but thank you for the reply. – Mike94 Oct 31 '14 at 20:43

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