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What is the Squid Proxy Server?
Squid is a proxy server and web cache daemon. It has a wide variety of uses, from speeding up a web server by caching repeated requests; to caching web, DNS and other computer network lookups for a group of people sharing network resources; to aiding security by filtering traffic.
Gray Area/Malicious uses for Squid Proxy Server
Let's say your school or work does not allow you to view websites like google, facebook and youtube.
All you have to do it to either find a Squid Proxy Server on the internet or to install one at your home. Then you can just simply use the SOCKS client in Firefox to route all your HTTP/HTTPS requests through the Squid Proxy Server, thus circumventing the school or work ACL.
If you install a Squid Proxy Server at your house, then you will have to allow and forward port 3128 to the correct internal address that points to your server hosting Squid.