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What is a Residential Proxy & How it Works?

Roberta Aukstikalnyte

2024-01-086 min read

Researching proxy types can get overwhelming, as there are so many different ones available. Nonetheless, there’s one type that always stands out and that is residential proxies. With their high price point and the fact that they come from actual people’s houses, there are a lot of questions and myths surrounding this specific proxy type. Why are they so expensive? What are they used for? Are they legal? 

In today’s article, we’ll cover all said questions and myths, so strap in. 

What is a residential IP proxy?

Let’s begin with a quick and short explanation of what residential proxies are, so all the nitty gritty details down the line make sense. 

In general, proxies are gateways between internet users and the websites they are visiting. 

A residential proxy is an intermediary server between people and websites. The only difference is that they use a real IP address assigned to real people by their internet service provider. These proxies can be used to enhance your online privacy. Or for scraping public online data from more difficult targets where other proxy types do not suffice. 

Residential proxy types 

While a residential proxy server in itself is a specific type, these proxies can also be split into different sub-categories.  

As the name implies, shared residential proxies are shared between multiple users simultaneously. As a result, these proxies are among the cheapest on the market. Surprisingly, even though they’re shared by several users, shared residential proxies are quite speedy, all thanks to their robust network architecture. 

On the other hand, shared residential proxies don’t give as much security and privacy. They’re more likely to get blocked by websites, too. 

1. Mobile residential proxies 
Mobile proxies use the IP addresses of mobile devices. Similar to dedicated residential proxies (more on that later), mobile residential proxies are highly reliable and speedy. Of course, that comes at a cost – these proxies are known to be on the more expensive side. 

However, it’s not uncommon for mobile residential proxies to get blocked by websites. 

2. Rotating residential proxies 
Rotating residential proxies automatically switch IP addresses randomly after certain periods of time. As a result, they’re highly secure and difficult for websites to detect, making them one of the priciest proxies on the market.

3. Static residential proxies
Static residential proxies use a real residential IP address from an actual internet service provider (ISP) rather than proxy server farms. Since these IP addresses are under contract from an actual ISP, your online activity appears to be regular traffic to any server you visit. 

Pricing Speed Blocks Security level
Mobile residential proxies Expensive High Uncommon High
Rotating residential proxies Expensive High Uncommon High
Static residential proxies Less expensive Depends on a provider More common High

What are dedicated residential proxies?

Another common type is dedicated residential proxies; these deserve their own separate explanation for how common they are, especially in the web scraping world. 

Dedicated residential proxies are gateways that you route your traffic through, just like other types of proxies. The difference is that these specific proxies provide you with IP addresses that are exclusively yours, with no one else accessing them. 

With that, dedicated residential proxies are the way to go if your priority is speed, privacy, and reliability. The only downsides are the price (they can get quite expensive) and the complexity of the setup process, requiring a certain level of technical expertise. In terms of web scraping, dedicated residential proxies are often used to work with complex targets, especially if you weren’t able to retrieve public data with other types of proxies and got blocked by a website. 

Residential vs. datacenter proxies

Another highly common proxy type is datacenter proxies, which are often compared to residential ones. Although they both have the same core functionality – changing your original IP address and routing your traffic through it – they’re quite different in terms of their source, pricing, and other factors. Let’s take a look at the main differences. 

  • Sourcing. Unlike residential proxies that have the IP addresses of real people provided by their internet service provider, datacenter proxies come from data centers or cloud hosting services.  

  • Pricing. Seeing as residential proxies use real people’s IP addresses, they are more difficult to acquire and upkeep, thus increasing their price. Datacenter proxies are more low-maintenance in that sense, so they’re not as pricey. For example, Oxylabs Residential Proxies Micro plan costs 99 USD/month, while our Shared Datacenter Proxies start at 50 USD/month. Even so, our residential network offers the best in considerably cheap residential proxies, providing premium quality, robust features, and unparalleled stealthiness that datacenter proxies lack when it comes to scraping challenging websites.

  • Likelihood of blocks. Residential proxies allow you to simulate organic behavior, so it’s more difficult for websites to detect and block you.

On the other hand, datacenter proxies are artificial, making it easier for websites to determine if someone’s connected to one. However, if they come from legitimate premium providers, blocks from the majority of websites shouldn’t be an issue.

For a more extensive comparison between these two proxies, check out our blog post:

Datacenter Proxies vs. Residential Proxies 

Sourcing Pricing Blocks
Residential proxies Real people IPs Expensive Less likely
Datacenter proxies Hosted in data centers Cost-friendly More likely, depends on the provider

Residential proxies use cases

Residential proxies can be used for the majority of web scraping-related use cases. However, there are specific ones that work better with residential proxies, so let’s take a look at them. 

  • Price monitoring – the process of collecting, processing, and analyzing competitors' prices. Businesses monitor pricing data to keep track of the ever-changing market and stay ahead of the competition. With residential proxies, you can imitate real-life scraping and gather public data from any e-commerce marketplace while avoiding blocks. 

  • Ad verification – the process of ensuring that online ads are displayed as intended and in compliance with industry standards. This way, advertisers can gauge if their ads are seen by the right audiences at the right time. Ad verification can be performed on different targets; therefore, it’s often split into such types as Facebook ad verification,  Amazon ad verification, Google ad verification, and so on. Residential proxies are a perfect digital ad verification solution because they provide unique, organic, and diversely geo-located IP addresses for accessing content overseas.  

  • Review monitoring is the process of checking what customers talk about the brand all over the internet. It involves monitoring brand mentions, negative reviews, or clients' feedback on multiple review sites. Residential proxies allow you to collect reviews from any location in the world without blocks.

Are residential proxies legal? 

When it comes to residential proxies, the question that comes up all the time is, “Are they legal?” Given the fact that residential proxies use real people’s IP addresses, it’s only natural that the legality of it is questioned. 

Truthfully, there isn’t a single straightforward way to answer this question. First of all – this goes without saying – you shouldn’t be using a residential proxy server for any illegal activities (e.g., scraping copyrighted data). We always advise you to seek out legal advice from a professional about your specific case. This way, you’ll be certain you aren’t breaching any laws. 

Secondly, it’s important to choose a legitimate residential proxy provider that is transparent about how they source their IPs – you have to be sure they come from legitimate sources. 

For example, scrapers often use residential proxies to make it harder for websites to block them. It’s legal to use a residential proxy to scrape websites that are publicly available but illegal to scrape content from private websites.

For more details, head over to our blog post “Is Web Scraping Legal?” where we have this topic covered. 

Choosing an ethical provider is crucial 

Another crucial factor to take into consideration is how the residential proxies are sourced and whether the provider is transparent about it. At the very least, it’s essential that the proxy provider acquires documented and explicit consent granted by fully aware users and, if possible, rewards proxy network participants.

Oxylabs has ethical and transparency standards regarding residential proxy acquisition. We have a dedicated blog post on this very topic:

Oxylabs Sets Clear Standards for Residential Proxy Acquisition

The proxy market is missing clarity and standards when it comes to the residential proxy procurement process. Oxylabs, as a strong advocate of ethical business practices, operating strictly within the capacities of established legitimate proxy pools, accepts the responsibility to bring order to the chaotic industry.

Final word 

Although expensive, coming from legitimate, premium providers, residential proxies make perfect tools for acquiring public data from difficult targets and avoiding blocks. 

However, it doesn’t necessarily mean that you can only use this specific type if you scrape public data from complex websites. If you’re unsure which proxy type to choose, feel free to reach out at Our professionals will assist you regarding your specific case. You can easily get proxy server on our dashboard or request a free trial - here’s more information on it. 

Frequently asked questions

Can you use residential proxies anywhere?

Yes, you can. Residential proxies work by connecting your devices to residential IP addresses, which can be remote from the physical location you reside in, technically allowing you to connect from anywhere. However, in certain countries, using a proxy to bypass internet censorship, for example, may be illegal. That said, you should study the local laws or seek professional legal advice. 

About the author

Roberta Aukstikalnyte

Senior Content Manager

Roberta Aukstikalnyte is a Senior Content Manager at Oxylabs. Having worked various jobs in the tech industry, she especially enjoys finding ways to express complex ideas in simple ways through content. In her free time, Roberta unwinds by reading Ottessa Moshfegh's novels, going to boxing classes, and playing around with makeup.

All information on Oxylabs Blog is provided on an "as is" basis and for informational purposes only. We make no representation and disclaim all liability with respect to your use of any information contained on Oxylabs Blog or any third-party websites that may be linked therein. Before engaging in scraping activities of any kind you should consult your legal advisors and carefully read the particular website's terms of service or receive a scraping license.

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