How crypto networks are fixing the problem with online privacy

If you are reading this article, it is safe to assume that you are familiar with the internet. For many, a day spent online will consist of personal and professional communications, online purchases, digital news, and the occasional search inquiry. Where we are when we access this material largely determines whether our computers use a public or private Wi-Fi network. Conventional wisdom holds that the former keeps our information safe. For even greater security, more people are also turning to virtual private networks, or VPNs, to secure their data online. Without a decentralized network, however, consumers are still placing their trust in one all-powerful entity — be it their VPN or internet service provider (ISP). The result is that the VPN or ISP has access to all of the activity that defines us online. For that reason, we support the use of a decentralized VPN to improve data privacy.

What are centralized and decentralized VPNs

It is first important to understand the purpose of a VPN before delving into its increased use. In short, a VPN service creates a direct channel between the user and a remote server. Think of a VPN as a home in which we store files, conduct business meetings, and gather information, away from the public eye. Not only does it provide a space for activity, it also disguises our IP address, our unique online identity. That identity tells websites and other internet-based applications the approximate location of our computers. Using a VPN, however, forces a computer to take on the IP address of the remote server. The internet may think that we — along with our computers — are sitting in an office downtown. The reality is that we could be anywhere in the world.

A decentralized VPN provides all of the above benefits and then some. These services use the power of blockchain to prevent any one entity from collecting data on its users. Rather than having the entire story of our activity, multiple providers — or nodes — have only one line. The distributed data is thus more secure, robust and resilient to theft. To return to the housing analogy, a thief would have to rob multiple homes instead of just one.

Why VPNs — and decentralized VPNs — are more important than ever

As society becomes increasingly virtual, VPNs are taking on a more important role. It should come as n on o surprise that, with the onset of coronavirus and stay-at-home orders, internet data usage is at an all-time high. Even on a private Wi-Fi network, what we do online is centralized and highly visible. The data privacy implications of this are threefold: (1) cyber criminals need only hack one place to gain information; (2) ISPs have an easier time collecting and selling consumer data; and (3) governments have the ability to track and control users. If accessing the internet is essential to everyday life, these are perhaps the prices of admission. However, those prices are rising rapidly, with the Organization for Economic Cooperation and Development (OECD) citing an upsurge in data privacy violations amidst Covid-19. Unfortunately, centralized VPNs can only do so much to prevent these abuses. This is because many — particularly, free — VPNs are incentivized to store and sell data. Those that are not still run the risk of hackers stealing the information they have neatly accumulated.

Beyond personal internet use, more workers than ever have been — and will perhaps continue — working virtually. The use of VPNs to access office shared drives has become all too familiar. As more businesses take advantage of these security benefits, they also face the pitfalls of the single provider. Companies should be wary of this, particularly as more workers clock in from and trust various VPNs around the globe.

And what of those who had been living around the world already? If you are an American traveling abroad, your online browsing may be frustrated by restrictions on certain sites and information. While a mere annoyance to vacationers, internet censorship creates serious ethical and economic implications. Two-thirds of internet users experienced government-imposed internet restrictions as of 2017. Since then, that number has only increased. It is no wonder then that an uptick in VPN usage predated the coronavirus. Again, depending on the provider, these networks can be exploited or compromised to obtain user data.

How blockchain-based VPNs are solving the problem

Decentralized VPN services like Orchid are solving the VPN problem. Rather than trust a single bandwidth provider, Orchid aggregates providers, so users can spread their activities across a network of providers. The company enables this through blockchain technology and cryptocurrency payments that connect consumers to providers. In a single browsing session, one user might route their internet traffic through multiple bandwidth providers depending on their needs and preferences. For example, if one provider has slow download speeds, the user is able to quickly switch to another. The result is a highly personalized experience that prevents any one provider from having the full picture of the user’s activity.

Where cryptocurrency comes in

Crypto is integral to decentralized services like Orchid’s. Orchid’s payment system for VPN service might be considered “peer-to-peer.” A user provides “nanopayments” of OXT — Orchid’s digital currency — directly to providers for the only bandwidth they use. This payment does not have transaction or processing fees unlike the U.S. dollar. In essence, it is a way of providing incentives for provider participation; for instance, a slow, unreliable provider is unlikely to have customers or make money. Inversely, as a provider increases their customer base, Orchid’s system will be more likely to choose that provider when directing customers. All of this is accomplished while maintaining consumer privacy. Indeed, consumers are protected, in part, by pseudonymized payments that can shield their identities. These added benefits of blockchain-based VPNs will hopefully convince even more consumers to use these services in the future.

While search history cannot talk, there is a lot it can say. From our place of work to our preferred brand of toothpaste, there is virtually no end to the data inferred about us online. The question is: who should we trust with that information? In the work-from-home era, the answer is no one — or rather, no one person or provider.