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Between the client and VPN server is a tunneled and encrypted connection, but is the connection from here to the internet encrypted?

Example of what I found on PIA's site: enter image description here

Its has an encrypted connection to the VPN server but an 'anonymous connection from there to the internet.

Is this 'anonymous' connection encrypted and/or tunnled? If not then people on the internet can see my data?

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No the data from the PIA-servers to the website hosters is no more secure than it would be if you were to connect to them directly.

If you connect to a website via http (unencrypted) your data would be visible. If you connect via https your data would be encrypted and not readable by other parties.

Wether your data comes from your computer, or PIA-servers does not make a difference.

The benefit of a VPN service is that your ip-address/location information is unlikely to be detected by the last member of a connection (e.g. website).

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    Another VPN benefit: your local ISP (or "free" or open WiFi connection) has no idea what websites you connect to
    – Xen2050
    Commented Feb 27, 2016 at 20:38
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It depends.

If you weren't using a VPN, would the traffic be encrypted?

  • If you're visiting http://example.com, then no.
  • If you're visiting https://example.com (notice the secure protocol), then yes.

In any case, the diagram notes that the remote side of the VPN gateway is anonymous, in that (encrypted or not) it is not obviously "from you" -- but mind that any data you send over that connection (even just your browser header) might still give away your identity; this is a common pitfall in thinking about VPN and TOR in a privacy perspective.

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