A VPN or Virtual Private Network is a method used to add security and privacy to private and public networks, like WiFi Hotspots and the Internet. VPNs are most often used by corporations to protect sensitive data. However, using a personal VPN is increasingly becoming more popular as more interactions that were previously face-to-face transition to the Internet. Privacy is increased with a VPN because the user's initial IP address is replaced with one from the VPN provider. This method allows subscribers to attain an IP address from any gateway city the VPN service provides. For instance, you may live in San Francisco, but with a VPN, you can appear to live in Amsterdam, New York, or any number of gateway cities.
A VPN network creates a secure connection over a public network i.e. the internet being one of the most important requirements of daily lives. The encryption for such a connection is provided by using algorithms for having security and the establishment of a reliable connection which is not possible in the case of a proxy server.
There are a number of VPN protocols in use that secure the transport of data traffic over a public network infrastructure. Each protocol varies slightly in the way that data is kept secure.
IP security (IPSec) is used to secure communications over the Internet. IPSec traffic can use either transport mode or tunneling to encrypt data traffic in a VPN. The difference between the two modes is that transport mode encrypts only the message within the data packet (also known as the payload) while tunneling encrypts the entire data packet. IPSec is often referred to as a "security overlay" because of its use as a security layer for other protocols.
Secure Sockets Layer (SSL) and Transport Layer Security (TLS) use cryptography to secure communications over the Internet. Both protocols use a "handshake" method of authentication that involves a negotiation of network parameters between the client and server machines. To successfully initiate a connection, an authentication process involving certificates is used. Certificates are cryptographic keys that are stored on both the server and client.
Point-To-Point Tunneling Protocol (PPTP) is another tunneling protocol used to connect a remote client to a private server over the Internet. PPTP is one of the most widely used VPN protocols because of it's straightforward configuration and maintenance and also because it is included with the Windows operating system.
Layer 2 Tunneling Protocol (L2TP) is a protocol used to tunnel data communications traffic between two sites over the Internet. L2TP is often used in tandem with IPSec (which acts as a security layer) to secure the transfer of L2TP data packets over the Internet. Unlike PPTP, a VPN implementation using L2TP/IPSec requires a shared key or the use of certificates.
Open VPN - OpenVPN is an SSL-based VPN that continues to gain popularity. The software used is open source and freely available. SSL is a mature encryption protocol, and OpenVPN can run on a single UDP or TCP port, making it extremely flexible.
Thus VPN provides an encrypted and secure connection tunnel path from a user's machine to its destination through the public Internet.