Technical challenges to online privacy
The Internet did not evolve with privacy in mind. In fact, the protocols that provide the fundamental underpinnings of the Internet are inherently non-anonymous. It's just a simple matter of computers needing to know each other's addresses in order to exchange data. For instance, any webserver can detect your Internet Protocol (IP) address. Other characteristics that a server can detect about you are your referrer (the site from which you are linking), the user-agent (the program you are using to browse the Web), and your operating system.What does your IP address reveal about you?
Your IP address reveals your point of entry to the Internet and can be used to trace your communications back to your ISP, your employer's network, your school, a public terminal. Though your IP address may not identify you personally, an IP is a unique identifier which represents your computer's digital ID while you are online.It is possible to disguise your IP address on the Web by using an anonymous proxy server. A proxy acts as an intermediary, routing communications between your computer and the Internet. A proxy specializing in anonymous surfing, however, uses its own IP address in place of yours in every outgoing request.
Approaches to proxy
Proxies are commonly used for several reasons: security, load balancing, data caching in order to reduce bandwidth demands, and censorship or filtering. Filtering proxies insulate you from objectionable elements of Webpages such as cookies, ad banners, dynamic content like Javascript, Java Applets and ActiveX controls. Some anonymous proxies encrypt your Web communications, protecting you from routine monitoring or even dedicated surveillance. Be careful, though, not all proxies are anonymous! Here is an overview of the basic approaches to proxy:- Web-based Proxies:  Web-based Proxies are powered by server-side softwares such as  CGIProxy, PHProxy, Glype, and custom proxy scripts. These proxies work  entirely through a Web browser. Usually all that is needed to hide your  IP address and surf anonymously is to visit the service's homepage in a  Web browser and enter a URL (website address) in the form provided.  There is no requirement to download or install software or reconfigure  your computer. To work, a CGI based proxy must manipulate the document  you've requested and all its associated elements and objects. This can  be tricky, and not all proxies are as efficient or effective as others.  Some services are slow and may produce errors while rendering the many  variations of Web page code. But they are popular, numerous, and easy to  use. See this page for a complete list of Web proxies.
Proxy.org recommends: Proxify® and the other proxies listed in the top ten.
 - Open Proxies: So-called "open  proxies" are HTTP or SOCKS type proxy servers that are accidentally or  maliciously left "open" and accessible on the Internet. HTTP or SOCKS  type proxy servers require that you configure your browser's proxy  settings in order to use them. These proxies have the advantage of being  compatible with almost all webpages since they do not have to modify  the requested page to keep you anonymous. However, there are several  major disadvantages to using open proxies. Many utilize computers that  are compromised, operated by government agencies, or operated by  malicious individuals. Often when an attacker obtains control of an  end-user's computer they will install a proxy server so the machine can  be exploited to launch further attacks on other machines. It is also  commonplace for open proxies to be operated as "honey pots", where all  actions are logged for forensic research. Open proxies are easy to abuse  and there are many people using them to commit credit card fraud,  pay-per-click fraud, attack or break into computers, and hundreds of  other illegal activities. We strongly discourage the use of open proxies  as they provide no privacy or security and using them can result in  increased exposure and liability.
Proxy.org recommends: Socksify® instead of any open proxy.
 - Proxy networks: Various proxy networks (Freenet, I2P, JAP, and TOR)  feature layered encryption (sometimes called "onion routing") and  peer-to-peer networking to allow their users to communicate anonymously  with each other. Rather than operate their own equipment, most rely on  end-users to donate bandwidth and other resources to the network. They  do not control the servers in their network and certainly a percentage  of them are operated by malicious individuals for malicious reasons.  Therefore any promises of privacy and security should be evaluated with  this in mind. Also, these services have developed a reputation for being  relatively slow.
 - Proxy Software: Other subscription-based services offer client-side application software to automatically configure your browser's proxy settings. Do not be fooled by these services as most are merely open proxies dressed up with a fancy interface.
 
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