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It is important to be safe in all aspects of your life. Sometimes people are careful in all other aspects but overlook the information they reveal online. Not only is you IP address logged on many sites but your ISP can keep data on all sites you visit that can be turned over to LEO's with a simple request. If you really want to get scared read this article: Article It explains how the UK plans to log all phone and internet communications that can be accessed WITHOUT a warrant.
One great way to keep your online tracks hidden is a VPN.
So what is a VPN?
A VPN is a "Virtual Private Network". Basically it creates a fully encrypted tunnel between you and the VPN providers servers. All of your data goes through this tunnel to their servers and out to the internet. This protects your IP address and browsing histories not only from the websites you visit but also you ISP.
How is a VPN different from a proxy?
First off a VPN encrypts and tunnels all of your internet traffic through it. Proxies need to be configured in each program that you want to use it. This is not necessary for VPN's, once they are configured and enabled your done. Also with proxies your communication to the proxy itself is unprotected. This means its possible that your ISP can see the traffic going to and from the proxy. The only thing that GOOD proxies protect is your IP from the websites you visit. Bad proxies wont even protect your IP.
VPN's sound great, how can I get one? There are many providers of VPN's on the internet. Many are attached to a small monthly fee in the range of 5 - 10 dollars a month. There are also some free services available but good ones are hard to find.
Here are a few good VPN providers:
http://itshidden.com/ Great FREE option! 128 Bit Encryption. Decent 1Mb speed for free users. Unlimited speed for paid customers; $12.99 a month. This is a new service and is well regarded.
http://vpngates.com/ $15 a month. Servers in multiple countries. Has PPTP, L2TP IPSec and VPN services.
http://www.flashvpn.com/ $5 a month for normal 128 Bit VPN. $8 a month for the more secure OpenVPN service. US based servers.
http://blacklogic.com/ $15 monthly. Large provider. Multiple servers in different countries to choose from. Multiple payment options including CASH so there can be no links back to you. Great for those looking for extreme privacy.
This are enough options here so anyone can get a decent level of online protection. Always remember an ounce of prevention is worth a pound of cure.