With Orchid recently listed on Gemini, we thought it would be a good idea to see how this cryptocurrency looks set to bring VPN privacy to the next level.
What is Orchid?
Orchid is a project for a decentralised market, which allows for anonymous communication and private networking. Orchid uses the cryptocurrency OXT for its project, an ERC-20 token. They believe that the centralisation of typical VPN services do not provide adequate privacy for their users. This is because current VPN companies use central servers along with other reasons which I will touch upon later.
Orchid launched in December 2019, being listed on the Coinbase exchange. This is unusual for Coinbase as the company typically lists older/proven cryptocurrency projects. Although this is not the case with Orchid, on the surface, it appears to be a new cryptocurrency – it has been a working progress since 2017.
The project’s long term goal is to produce an open-source decentralised and surveillance-free internet, one that would allow everyone in the world to have free access, removing the barriers placed by institutions across the world. Furthermore, it wants to eradicate privacy abuse regularly conducted by companies.
In 2017, the House of Representatives decided to kill the regulations placed on companies such as Verizon and AT&T. The removal of regulations now allows internet providers to use and sell user data. Internet providers (USA) are no longer prevented from accessing many pieces of personal data, such as your:
- health information
- financial information
- web browsing history
With the world’s largest internet providers now able to move around our personal data so easily, Orchid believes that it is time to take our data back. Now that these companies have our data, they can do lots with it, such as:
- sell it
- insert user specific advertisements
- utilise URL recording software
Free VPN issues
Firstly, 38% of free VPNs have shown infections; this means that there is malware found within the VPN. Secondly, the way in which free VPNs work is that they gather your data in order to sell it. This is ironic as VPNs are supposed to protect your data, although the data which they have collected through you using their servers is gathered and sold. It has also been reported that some free VPN providers use your bandwidth, which is then provided to ‘premium users’ – this is a problem if this premium user is using your bandwidth for illicit activity.
In 2018, one of the world’s top VPN companies was hacked: NordVPN had one of their private keys exposed. This subsequently led to hackers potentially having access to user data. Worryingly, NordVPN is used by journalists within oppressive regimes who are trying to exercise freedom of speech. If hackers were then able to access the data trail left by the journalist, selling it to their respective government, it could land them in a world of trouble. The way in which NordVPN was hacked was when one of their data centres in Finland was accessed without authorisation.
Orchid allows users to compose onion routed circuits; this is when encrypted data is transmitted through a series of network nodes. The network for Orchid is powered by the Ethereum blockchain, using probabilistic nanopayments. Through using these nanopayments, it provides extremely high levels of anonymity when using the Orchid service.
Unlike other VPNs, where you buy the subscriptions off their websites, this is not possible with Orchid. Instead, you are required to buy the OXT cryptocurrency, used for Orchid payments, from exchanges. After the cryptocurrency is purchased, you can then send over
the OXT to the Orchid system and begin using the VPN. Through removing the payment option on the platform, it ensures that Orchid cannot store any information of the user. This means that if there is a data breach, the hackers cannot steal your personal information from Orchid. The Ethereum node operators mitigate potential risks from outside entities attempting to breach the system.
The Orchid Market
It is a decentralised P2P network, allowing users to purchase bandwidth from each other. The bandwidth seller registers their nodes on the Ethereum blockchain and receives OXT in return. The Orchid market uses stake-weighting, therefore bandwidth providers receive OXT dependent on their traffic proportion.
The project is surely an exciting one. Our data is more valuable than we are – it is vital that we protect that. There are multiple cryptocurrency projects which are working towards data protection, such as: BAT, Monero, and Orchid. If the project takes off, it could really cause some disruption within the VPN industry. The expansion of the project looks inevitable – the increased scalability of Ethereum 2.0 could allow Orchid to flourish.