I think that's quite it. VPN means virtual private network meaning it allows you connect to a network that would mask you IP and connection to the internet making it possible for you to access the internet via a private network. VPN gives you a nice level of security however it's not as private and strong as certain persons think. If you require further privacy, browsing the internet via a safe browser like Tor would also add up an extra layer of security.
Also for the case of a bitcoin wallet, thanks to bitcoin having a decentralised network, you can also create and Run your own node ensure further privacy of your network especially if you don't wish to share certain data with public nodes.
I use Tor from time to time, but some sites restrict access to Tor, so a VPN in this case becomes an interesting option.
Yes it is. But try to avoid free VPN. They basically steal your data, most of them.
You have a point, I don't use free VPNs as I know the risk is higher, the security and encryption they offer is not the same as paid VPNs.
Is using a VPN as a proxy in a wallet (that has the configuration for this) a good idea to get more privacy?
It depends on what kind of privacy you want. VPN can hide your real IP and location, but the server still know list of address owned by you. Some user may mention running your own node and server, but it's not cheap option especially if you own coin where it's blockchain have big size.
Yeah, this is indeed a problem.
Even hiding your IP, they will know all those addresses are connected. Because you make a request to the node for the balance of all those addresses together...
The only way to really have privacy is to run your own full node. So you request all addresses balance, not only the ones you own the private key
So, about this, when using elelctrum for example, which uses several public servers, when our wallet connects to these servers, several data are shared with them such as XPUB, balance in addresses, etc., only xpriv, seed, etc. data are not revealed...
VPN is not 100% private the platform provide the service might keep all your logs and activities.
TOR is the safest way and yes it helps to be private by not leaking out IPs connected to the network but it can be little slower than no masking but it's worth the time. You should run own node via TOR for complete privacy.
It's true that VPNs claim not to record user logs, but who can guarantee that?