Do VPN applications really protect your traffic, and if so, what exactly are they doing to my packets?

Yes, VPN applications do protect your traffic.

A VPN is like wearing a costume or a mask because it masks your real identity and location, just like a costume or mask hides who you are in real life.

Here’s the breakdown of the analogy:

VPN vs. Costume Analogy

VPN FunctionCostume Equivalent
Hides your IP addressHides your face/appearance
Makes you appear to be in another locationMakes you look like someone (or something) else
Protects your data from being recognizedKeeps others from knowing who you really are
Routes traffic through a VPN serverLike going to a masquerade ball and using a pseudonym
Prevents websites and trackers from profiling youLike blending into a crowd where no one knows your identity

Here’s exactly how and what they do to your packets:

What a VPN actually does to your traffic:

  1. Encrypts your traffic:
    • All data leaving your device (before it hits the internet) is encapsulated and encrypted.
    • Common encryption protocols: OpenVPN, WireGuard, IPSec/IKEv2, L2TP/IPSec.
    • This prevents ISPs, Wi-Fi snoopers, and man-in-the-middle attackers from seeing what websites or services you’re using.
  2. Tunnels your traffic to a VPN server:
    • The encrypted packet is wrapped in a new IP header with the VPN server’s IP address as the destination.
    • This is known as encapsulation.
    • Your traffic is sent through a “tunnel” to the VPN server over the public internet.
  3. Decrypts and forwards your traffic at the VPN server:
    • Once it reaches the VPN server, the encrypted wrapper is removed (decrypted).
    • Your original packet (with the real destination IP) is then sent to the internet as if it originated from the VPN server.
    • This masks your real IP address.
  4. Applies return traffic handling:
    • When the destination replies (e.g., a website sending data back), the response goes to the VPN server.
    • The VPN server re-wraps the response in an encrypted tunnel and sends it back to your device.
    • Your VPN app decrypts it and passes it to your operating system.

Visualization of packet flow (you can view a more detailed example below):

Without VPN:

[Your IP] ───▶ [ISP] ───▶ [Destination website]

With VPN:

[Your IP] ───▶ [ISP] ───▶ [VPN server IP] → (decrypt) → [Destination website]

From the website’s point of view, the traffic comes from the VPN server, not you.

So, what protections do you get?

  • Confidentiality: Your ISP, government, or attackers on public Wi-Fi can’t see your traffic contents.
  • Anonymity: Your IP address is hidden from websites and services you use.
  • Integrity: Packets can’t be modified without detection (due to encryption algorithms).
  • Location masking: You can appear to be in another country or region.

What a VPN doesn’t do:

  • It doesn’t protect you from malware, phishing, or bad websites.
  • The VPN provider can see your traffic after decryption unless it’s end-to-end encrypted (like HTTPS).
  • If the VPN server is compromised, your privacy may still be at risk.

Example Scenario With Added Detail

Let’s walk through a packet-level example of what a VPN does to your traffic—step by step, showing the changes to the packet structure:

Scenario: You’re visiting https://cellstream.com using a VPN

Step 1: Normal (Unprotected) Packet

Without a VPN, your packet looks like this on the wire:

[IP Header: Your IP → cellstream.com IP]
[TCP Header: Source Port → Port 443]
[Encrypted HTTPS Payload]

Anyone on the path (ISP, hotel Wi-Fi, etc.) can see:

  • Your IP address
  • The destination IP (cellstream.com)
  • The port (443 — HTTPS)
  • They can’t see the actual data due to HTTPS encryption, but they can see the metadata.

Step 2: VPN-Encrypted Packet (with VPN Tunnel)

With a VPN, the same packet is encapsulated and encrypted like this:

[Outer IP Header: Your IP → VPN Server IP]
[VPN Header: Encryption/Auth Info]
[Encrypted Inner Packet]
└─ [IP Header: Your IP → cellstream.com IP]
[TCP Header: Source Port → 443]
[Encrypted HTTPS Payload]

Key changes:

  • The original packet is now inside another packet.
  • The outer IP header only shows your IP and the VPN server’s IP.
  • The inner packet (your actual HTTPS request) is completely encrypted.

So now, your ISP or attackers on public Wi-Fi only see:

  • That you’re talking to a VPN server (not to cellstream.com)
  • The protocol and port used by the VPN (e.g., UDP 51820 for WireGuard, or TCP 443 for OpenVPN)
  • They can’t see your destination, data, or even the SNI (in HTTPS).

Step 3: VPN Server Forwards Your Traffic

At the VPN server:

  • The encrypted packet is decrypted.
  • The inner IP packet is extracted and forwarded to example.com.

To example.com, it looks like:

[IP Header: VPN Server IP → cellstream.com IP]

The web server sees the VPN server’s IP, not yours.

Step 4: Response from cellstream.com

  • example.com replies to the VPN server.
  • The VPN server wraps the reply in the same VPN tunnel (encrypts it).
  • You receive:
[Outer IP Header: VPN Server IP → Your IP]
[VPN Header]
[Encrypted Inner Packet]
└─ [IP Header: cellstream.com IP → Your IP]
[TCP Header: Port 443 → Your Source Port]
[HTTPS Payload]

Your VPN app decrypts and delivers the packet to your OS/app as if it came directly from the website.


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