Second, for a lot of people in this world it's a given that their ISP/government is monitoring their traffic. It's vastly better to be potentially spied on by someone abroad then to be certainly spied on by someone who has direct authority over you.
To answer your first question, the most popular use cases for VPN are:
1. Circumventing censorship
2. Circumventing regional content restrictions
3. Hiding your IP while torrenting (note that this is relevant only in the US)
4. Avoiding government surveillance (again, note that US is not the only country in the world, but likely the only one with any meaningful reach outside its borders)
5. Avoiding private surveillance (public wi-fi, etc.)
6. Hiding your IP while engaging in illegal online activities (#3 is a special case of this but it's a vastly larger group so I made it separate)
Note that "weird jurisdictions" can be a significant advantage for cases #3 and #6 (because they are harder to subpoena) as well as #3 (because they don't have retention laws).
It's not, actually. The same BS is happening in at least Finland too these days.
Legal companies get the rights to some media (in the Nordics or whatever) and monitor some torrents and take screenshots(!) of the IP's in the torrent swarm and can then petition the market court for the subscriber details of the IP addresses in the swarm then send a threatening letter asking for a 500€ settlement. Some idiots are even caving in and paying. I don't think anyone has actually been sued yet for establishing some precedent (though the Finnish legal system isn't based on precedents).
I set up a VPN in the Netherlands, hosted on a VPS. I was connecting from another European country (where ISPs block torrent sites).
Within minutes of attempting download of recent movie release, a Cease and Desist was emailed by ip-echelon.com.
The entire German nation would like a word with you, kind sir.
Between this and GEMA, using the internet in Germany is quite restricted.
This is relevant in most of Europe and unlike in the U.S., a C/D letter can easily cost you somewhere between 300 and 1000€.
* getting around arbitrary region restrictions (that use case is rapidly disappearing)
* protecting myself against snoopers when on public WiFi. I'm very mobile, and often work from cafe/hotel/airport WiFi. They're mostly in the clear, but I VPN even over encrypted WiFi because of the below.
* I don't like ISPs selling my information. The service i use is fast enough that I can have it always on, without a noticeable speed loss... So I do. If my ISP wants to sell my browsing habits, they can buy them from me.
Now that you mention it, I'll totally try torrenting something. Curious to know how it performs!
But yes, seven hops is about the minimum for any prudently private person, as I see it.
But for true overkill, see https://www.ivpn.net/privacy-guides/onion-ssh-hosts-for-logi...
It's not that hard to hit 30 hops, alternating VPNs and Tor onion services.
"This video is not available in your region"
2. Hiding your activities from your own ISP.
And I would guess that the vast majority of VPN customers are simply doing what you said VPNs are good for: hiding copyright-violating activities.
Not guaranteed. That depends on the network setup and on how much pressure legal system had on the ISP in question.
Possible cases:
1. Dynamic IPs allocated from a shared address pool, but no carrier-grade NAT, just 1:1 mappings. Most likely, ISP's AAA (authentication, authorization and accounting) systems keep track of those, so the account details are one warrant away. Especially if ISP has or historically had metered plans, using IP addresses is generally the most straightforward way to match flow reports (with traffic volume data) to customers.
2. User is behind a carrier-grade NAT, ISP's local jurisdiction requires ISPs to disclose information about customers, and local law enforcement aren't happy with "uh... we don't know, there's a NAT, we only can tell it's someone of those thousand accounts from that BRAS, sorry" replies, so ISP had been fined or threatened with license revocation (if ISP services are licensed in their jurisdiction). In such case they had probably at least set up two flow probes - before and after the NAT, so it's usually possible to correlate the streams. Or, more likely, implemented logging of NAT connection mappings (on GNU/Linux machines this is quite simple with conntrack and ulogd, no idea about Ciscos - not my area of expertise), so it's also well possible to determine who it was.
Since one generally can't know what ISP's routers are capable of, having carrier-grade NAT should be only considered as a possible hindrance, but not as a guaranteed way to keep their account identity anonymous.
The only reliable solution has been ShadowSocks; it's what locals and expats alike use. It simply works, and also has public servers.
Also, one needs an exit server, or not?
Most people are talking about various valid use cases but it's this risk vector that I'm interested in. What exactly could a VPN steal from regular personal computing network traffic? Cookies and sessions? Web history and other meta-data? Does HTTPS / up-to-date encryption protocols stop any of this?
Likely every service with questionable legal status (e.g all that state there is no logging going) does analyse all bandwidth for it's own needs and clearly going to steal everything they can. Even TOR exit nodes are more secure since you at least know they can't be trusted by default.
What advantage is there over own servers that is unlikely monitored by default and still dirt cheap?