API Gateway vs. Load Balancer vs. Reverse Proxy: Getting the Architecture Right

Nginx started as a web server. Now it acts as a reverse proxy and a load balancer. AWS Application Load Balancer routes traffic. But AWS API Gateway also routes traffic. They solve fundamentally different problems, yet they look identical to a junior developer.

Let us define a strict heuristic to make architectural decisions faster.

• The Reverse Proxy hides the server.
• The Load Balancer distributes the traffic.
• The API Gateway manages the business logic of the request.

The Reverse Proxy: The Shield

A reverse proxy is your frontline shield. It sits between the public internet and your internal servers. Clients send requests directly to the proxy. The proxy fetches the response from the backend and returns it to the client. The client never learns your actual backend IP address.

I use reverse proxies primarily for anonymity and static caching. They take care of SSL termination. They decrypt incoming HTTPS traffic so your application servers do not have to waste CPU cycles on cryptography.

If a client requests a static image or a compiled frontend bundle, the reverse proxy serves it directly from memory. The request never even touches your Node.js or Python backend. It is incredibly fast and cheap.

The Load Balancer: The Traffic Cop

Eventually, your application becomes too popular. One server cannot handle the volume. You add five more servers to handle the load. Now you need a way to distribute the incoming requests fairly.

This is where the load balancer enters the picture. Its primary job is availability. It acts as a traffic controller. It continuously checks which servers are healthy. It uses algorithms like Round Robin or Least Connections to send traffic to the server with the most capacity.

During my time engineering systems for a global gaming portal, we handled massive traffic spikes. We did not want complex logic or token validation at the network edge. We needed pure routing speed. We used network and application load balancers to spray requests across hundreds of instances. They just moved packets efficiently without asking questions.

The API Gateway: The Product Manager

Think of an API Gateway as a reverse proxy with an MBA. It does not just forward requests. It actively inspects them. It makes decisions based on who is asking and what they want.

API Gateways handle authentication, rate limiting, protocol translation, and billing. They protect your internal microservices from public exposure.

While architecting a self-service platform for a large insurance company, we managed dozens of internal microservices. We did not want every single microservice to implement its own JWT validation logic. That approach leads to duplicated code and inevitable security holes.

Instead, we put an API Gateway in front of the entire cluster. The gateway verified the authentication token. If the user was valid, it forwarded the request. If the user was spamming the endpoint, the gateway dropped the request instantly. The microservices remained completely ignorant of the outside world.

The Code Reality

Let me show you a conceptual TypeScript example using Express. This illustrates the difference between simple proxy routing and intelligent gateway logic.

import express, { Request, Response, NextFunction } from 'express';
import { createProxyMiddleware } from 'http-proxy-middleware';
 
const app = express();
 
// 1. API Gateway Logic: Rate Limiting
const rateLimiter = (req: Request, res: Response, next: NextFunction) => {
  const userLimits = checkRatelimit(req.ip);
  if (!userLimits.allowed) {
    return res.status(429).send('Too Many Requests');
  }
  next();
};
 
// 2. API Gateway Logic: Authentication
const requireAuth = (req: Request, res: Response, next: NextFunction) => {
  const token = req.headers.authorization;
  if (!isValidJwt(token)) {
    return res.status(401).send('Unauthorized');
  }
  next();
};
 
// 3. Routing Logic
// Only authenticated, non-throttled traffic reaches the actual microservice
app.use(
  '/billing', 
  rateLimiter, 
  requireAuth, 
  createProxyMiddleware({
    target: 'http://internal-billing-service:8080',
    changeOrigin: true,
  })
);
 
app.listen(3000, () => console.log('API Gateway running on port 3000'));
 
// Helper functions (mocked for readability)
function checkRatelimit(ip: string | undefined) { return { allowed: true }; }
function isValidJwt(token: string | undefined) { return token === 'valid-token'; }

The code above does not just move data. It actively protects the system. It checks the rate limit. It verifies the identity. This is the hallmark of an API Gateway.

The Trade-Offs and Costs

Nobody likes to talk about pricing. However, choosing the wrong component is a financial trap.

An API Gateway generally charges per request. A steady stream of high volume traffic can drain your infrastructure budget quickly. Software engineer Amine Belkadhi recently highlighted this in an architectural breakdown. He pointed out that an Application Load Balancer charges mostly by hours and capacity units. This makes a Load Balancer much cheaper for constant and heavy workloads.

You have to weigh the trade-offs. Adding more layers adds network hops. Every single hop adds milliseconds of latency to your response time.

Do you need all three components? In a mature enterprise environment, the answer is often yes. A Reverse Proxy (often acting as an edge cache or CDN) sits at the very edge to serve static assets directly. Dynamic traffic then passes to a public Load Balancer, which absorbs DDoS attacks and distributes the load across a cluster of API Gateways. The API Gateways handle authentication and rate limiting. Finally, the request reaches an internal Load Balancer sitting directly in front of the microservices.

I prefer to start simple. If I am building a small application or a monolithic MVP, a basic Load Balancer is enough. When the team grows and we split the backend into isolated services, I introduce an API Gateway.

Complexity should always be earned. You should not adopt an API Gateway just because you read a trendy blog post about microservices. You should adopt it when your authentication logic becomes impossible to manage across twenty different code repositories.

References

• ByteByteGo Technical Guide: Reverse Proxy vs. API Gateway vs. Load Balancer
• Architectural Pricing Breakdown: "API Gateway vs Application Load Balancer: Which One Should You Really Use?" by Amine Belkadhi