What is a Residential Proxy?
Understanding residential proxies and the security risks they pose to modern businesses
Understanding Residential Proxies
A residential proxy is an intermediary server that routes internet traffic through IP addresses assigned to real residential internet connections. Unlike datacenter proxies that use commercial IP ranges, residential proxies utilize authentic home internet connections from Internet Service Providers (ISPs).
These proxies appear to websites and online services as legitimate home users, making them extremely difficult to detect and block. They provide anonymity by masking the user's real IP address while appearing to originate from genuine residential locations worldwide.
With tens of millions of residential IP addresses available at any point in time, these services have become increasingly accessible to threat actors and pose an ever increasing threat to online platforms.
How Residential Proxies Work
Proxy providers recruit residential devices through mobile apps, browser extensions, or software installations. Often times the end user has no idea the software they installed is selling access to their internet connection in the background.
When threat actors send requests to a proxy network the proxy provider routes their requests through these residential devices, making it appear as if the traffic originates from a real home user rather than a commercial proxy server.
Security Risks and Abuse
- Fraud & Abuse: Creating fake accounts and bypassing security measures by appearing as legitimate users
- Data Scraping: Extracting sensitive information at scale without detection or rate limiting
- Click Fraud: Generating fake clicks on advertisements for financial gain while avoiding detection
- Account Takeovers: Accessing compromised accounts while appearing to originate from legitimate residential locations
- Bot Activity: Operating automated tools that appear as human users to bypass security measures
The Challenge for Businesses
Residential proxies present unique challenges for businesses because they use legitimate IP addresses, making traditional blocking methods ineffective and potentially harmful to real users.
Standard IP blocking and geolocation methods fail because residential proxies use real ISP-assigned addresses that appear completely legitimate to security systems. Traditional blacklists and reputation-based filtering become ineffective.
Modern residential proxy networks span millions of IP addresses across every country, making manual identification and blocking practically impossible. The sheer volume and constant rotation of addresses overwhelm conventional security approaches.
This is where specialized detection services provided by Layer3 Intel become essential, providing advanced threat intelligence that can identify residential proxy traffic with over 98% accuracy, helping businesses protect themselves while avoiding false positives that could block legitimate users.