Normally, your internet service provider can see all the websites/servers you connect to (but not the content of what is being sent to/from those servers). Your ISP obviously knows your name and physical address so they can give you service. This means they can connect your real world identity to the websites you access (including the exact time you accessed them).
If you use a VPN, your ISP can only see that you are communicating with the VPN’s server; they can’t see the content of that traffic, so they can’t see which websites you are accessing through the VPN. If the VPN company is privacy conscious and doesn’t save logs (or doesn’t know who you are because you signed up anonymously) it is much harder for someone to tie your browsing activity to your real world identity.
This is even more advantageous if you are using a public Wi-Fi network, which could be actively trying to listen in on your communications.
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