A transparent proxy (also called inline proxy, intercepting proxy, or forced proxy) is a server that sits between your computer and the internet and redirects your requests and responses without modifying them. A proxy server that does modify your requests and responses is defined as a non-transparent proxy.
A transparent proxy can be used for various reasons, such as content filtering in schools and libraries, and as it does not need any configuration on the client side, it can be an easy-to-maintain alternative to other proxy types.
Software like Squid can make it relatively easy to set up a free transparent proxy server that you control. But unlike with other proxy services or VPNs, you do not necessarily need to download an app or program to use a transparent proxy. Instead, it depends on how your network is configured.
Internet efficiency through caching
In places where internet speed is slow, a transparent proxy allows for increased efficiency within the limited bandwidth. It’s especially useful if a large group of people is expected to open the same page, such as the front page of a popular newspaper or a video. The content can be cached by the proxy and served from the cache to the user, instead of having to be downloaded multiple times over a congested connection.
The ability to censor and monitor
Transparent proxies have the ability to selectively censor and monitor your traffic, although internet service providers and network administrators have many other ways to easily do this.
However, when your connection to a website is encrypted with HTTPS, or you are using a VPN, the proxy is unable to read the data transmitted to and from you. The traffic cannot be monitored, and the proxy loses its ability to cache the content you are requesting.
Because transparent proxies are created and administered by those already in charge of the network, they are usually not used for circumventing censorship. It is possible however to set up such a proxy to unblock content for users, similar to running a VPN on your router.
Public Wi-Fi spots use proxies to authenticate users
A transparent proxy can be used to selectively restrict access to the internet. This is commonly used in hotels and public Wi-Fi spots, where users are asked to confirm terms and conditions, enter a phone number, or add other identifying information before they are given access to the internet. Most public Wi-Fi is unencrypted, or perhaps encrypted with outdated technology. And in addition to being monitored by the proxy, the user is at risk of having traffic monitored and intercepted by anybody nearby.
Your laptop or phone will usually display a lock next to Wi-Fi networks that offer encryption.
If poorly implemented, the caching and redirection of web traffic can cause problems with Internet connections, particularly when authentication is involved, as a computer might not realize it is not talking directly to a server.
A proxy can function both ways
A transparent proxy is sometimes not just run on the user side, but also on the servers. This often has the purpose of protecting websites against DDoS attacks, or to increase the capacity of the server, for example when serving large files or videos to many users.
Content delivery networks use the caching capability of a transparent proxy to serve website content to users more quickly by storing copies of it across the world. When you request a video from a site using such a service, you are likely being served the video from a proxy server near your location, rather than the original server.
This is not particularly problematic, although content delivery networks have been criticized for being in a position to potentially spy on the users of their customers.
How to detect if you are behind a proxy
Depending on their configuration, detecting some proxy servers is easy, though others are more hidden and are difficult to spot.
A good way to check is to attempt a connection to a server that you know does not exist. Your browser will commonly throw a recognizable error when the connection fails. But if you are behind a proxy this error might be different, or instead you might be redirected to a search page.
Some sites do allow you to check if you are behind a proxy or not, though with varying reliability.