The term "VPN" can be a little confusing. All VPN tools create a virtual private network, certainly, but there are different ways to use your VPN depending on what you want to achieve.
You might be familiar with the best VPNs like NordVPN and ExpressVPN already. In a nutshell, these commercial options are used to access the internet through a type of "proxy" server.
However, there are also self-hosted VPN tools that allow you to create your own virtual LAN. Though they call themselves "VPN" products, too, they're not the same as commercial VPNs, and you should generally steer clear from them unless you know what you're doing.
To give you a better idea of what each VPN can do, I'll go through the key differences between each VPN style from both a personal user and a business perspective.
What's the difference?
Hosted VPNs are tools like Hamachi VPN and Radmin VPN that connect multiple users together through a single integrated VPN network which can be split into lots of different subnetworks. Each of these tools gives you access to a VPN network that the VPN provider manages for you.
Then, you can take advantage of the existing VPN hosting to build your own private virtual network. This allows all connected devices to interact as though they are on the same local network.
There are strict limits to what you can do with other devices on this VPN network. For example, without specialized networking software, you can't use them as a gateway to connect to the internet.
On the other hand, commercial VPNs use the same VPN technology to create a secure gateway between your device and a single server on the internet. This allows the VPN server you're connecting to access the internet on your behalf, sending all your traffic through a private, encrypted tunnel.
If you're interested in the ins and outs of VPNs, check out our guide to how VPNs work for the full picture.
Doing so protects your data and masks your IP address by replacing it with the server you're connecting to, enabling you to access content that may be restricted in your location. Think of geo-blocked Netflix libraries, etc
Hosted VPN services require some administration knowledge to set up. Commercial VPNs are much more straightforward to deploy and use. All you have to do is install one, log in, and press connect.
The best commercial VPN services are designed to be intuitive, requiring no technical knowledge, and are supported by extensive customer service, including 24/7 live chat and comprehensive troubleshooting guides.
For personal use
There are a few reasons why you might want to buy a commercial VPN for your home connection.
First of all, using a VPN stops your ISP from spying on you. By default, your ISP has access to all of the data you send over your internet connection and knows every domain you're trying to access via DNS.
In some countries, like the UK, the government requires the capture of this data and stores it for several year, making it available to law enforcement on request, too. If you want to preserve your privacy, subscribing to a verified no-logs VPN is a no-brainer.
If you want to preserve your privacy, subscribing to a verified no-logs VPN is a no-brainer.
You'll also be able to connect from a bunch of different locations around the planet. A lot of online content is geo-locked in countries like the US or UK – and that's a real pain for folks trying to check out specific series on streaming platforms.
Plus, if you've got a subscription to Netflix UK, there's no good reason why you shouldn’t be able to watch it while you're on holiday, right?
A properly configured VPN will allow you to get around these blocks, and top-tier ones will ensure you can do it seamlessly on your internet-connected TV, too, with Smart DNS features.
Technically, you could use the VPN tunnel provided by Hamachi to create an encrypted internet tunnel between your host device and another device on the Hamachi network. However, you would need to own the other device and be able to configure it as a proxy server to the internet.
Given that you would either need to pay for another internet connection in the place you want to connect to, or buy a hosted server, you're better off either setting up your own OpenVPN server or just saving yourself the hassle and buying a commercial VPN.
The main use of hosted VPN solutions is to create connections between devices you control or trust without investing in your own VPN infrastructure.
This is why hosted VPN services are so popular amongst gamers.
By creating a virtual LAN using a hosted VPN, you can bypass many of the connectivity barriers such as port forwarding and firewalls that make it difficult to create P2P connections between PCs. This is why hosted VPN services are so popular amongst gamers.
Connecting to peers in older games is tricky for a few reasons. Some of the connection middleware used to authenticate and manage connections between peers has been shut down, notable examples of this being GameSpy and Games for Windows Live.
While a few developers have updated their games to use more modern forms of matchmaking, there's still a graveyard of unloved games built by developers and publishers that have either gone out of business or don’t view it as profitable to push a new update.
Without the ability to mod these games, the only option left to gamers who still want to play these old games online is to use the LAN networking features left in the game over a virtual LAN using a hosted VPN service. This is why you'll see tools like Hamachi mentioned so often in a gaming context, and it's one thing that commercial VPN tools tend not to be able to pull off properly.
For businesses
There's a better use case for opting for a hosted VPN service as a small business. It makes remotely administrating devices in several different locations far easier by collecting them all in a single emulated LAN.
Scaling this approach can be difficult, but it's a possible way to bring small teams together.
It's also much easier to distribute files using Windows and MacOS using their in-built file-sharing tools across a LAN instead of setting up internet file sharing.
If you've got several users working from home it's an ideal way to allow them to access resources and devices from anywhere in the world without having to set up your own VPN infrastructure. Scaling this approach can be difficult, but it's a possible way to bring small teams together.
Commercial VPN tools do not tend to offer the same advantages, as they’re primarily built to enable internet connections from single devices.
Commercial VPN tools do not tend to offer the same advantages, as they're primarily built to enable internet connections from single devices. However, there are a few VPNs, such as NordVPN’s MeshNet, which integrate hosted VPN features into their commercial VPN offering.
This means that you get all the advantages of a commercial VPN, including:
- AES-256 encryption
- Tested and secure VPN protocols like OpenVPN and WireGuard
- Private DNS servers for DNS leak protection
- System-wide kill-switches
All this is in addition to the ability to access devices, share files, and perform remote administration that you'd get from a hosted VPN tool.
Commercial VPNs invest significantly in advanced security measures, too. These providers also undergo regular independent security audits to validate their claims and ensure their systems are defended against potential threats. Furthermore, the best commercial VPNs adhere to strict no-logs policies proven by third-party audits from top auditing firms such as KPMG, Deloitte, and PwC, which guarantee that user activity is not tracked or stored.
While hosted VPN tools tend to be trustworthy, if you’re trusting a third party to host some of your VPN infrastructure you should have every confidence possible that your data is in safe hands.
The bottom line
While there are some specific use cases where you'll want to use a hosted VPN, they're few and far between.
You won't get any of the privacy benefits from fully encrypting your internet connection when you use a hosted VPN, as it only covers the connection you make with other devices on the emulated LAN. Hosted VPN tools are for creating specialized networking capabilities – so unless you know what you're doing and why you're doing it, a tool like Hamachi or Radmin VPN won't really help you get the most out of your internet connection.
The important thing is to make sure you're not picking a hosted VPN product when you think you're choosing a commercial VPN product.
When you choose a top-tier commercial VPN, you're getting a comprehensive, hassle-free approach to online security and privacy whenever you connect your device to the internet. Plus, compared to a hosted VPN tool, they require minimal setup to get the best experience out of your connection.
