Decentralized VPN Orchid Launched on the Apple App Store

  • Commentary
  • July 25, 2020

Orchid, a decentralized virtual private network (VPN) provider, recently launched its service on the Apple app store. Following this month’s launch, the price of the project’s native token, the Orchid Digital Currency (OXT), rose by 11%. Additionally, on July 22, 2020, the team announced that Orchid was available on desktop on macOS. Members of the team include co-founder of Pantera Capital, Dr. Steven Waterhouse; creator of alternative app store Cydia, Jay Freeman; creator of the first online banking software for Wells Fargo, Brian J. Fox; and one of the core developers of Ethereum, Gustav Simonsson. In 2019, the company raised over $43 million from the presale of its token.

Orchid is built on the Ethereum blockchain and has a market-based system wherein node providers can stake tokens for advertising their services. The goal of Orchid VPN is to combat the centralization of VPN services and to offer ‘multi hop VPN routes’ for added security. Orchid is available on iOS, Android, Linux, macOS and is coming soon to Windows as well.

Users can access Orchid’s services by establishing pre-funded accounts using fiat currency. When users purchase these pre-funded accounts using the official iOS app, users do not have to know about cryptoassets or any intricate process related thereto. The funds are automatically allocated to go towards purchasing OXT, a deposit to the generated account to allow for ticket sizing in the nanopayment system, ETH gas transaction fees, and fee transaction for fiat currency. These accounts can be shared with others, however, OXT cannot be withdrawn from the account. One of the most important aspects of designing a blockchain-based product that is designed to appeal to the broader public is the fact that using the system must be a simplistic process; something which Orchid is beginning to take meaningful steps towards realizing by minimizing the interaction between end-users and backend cryptoasset tooling and economics. That being said, the product still has substantial progress to make before it can rival legacy VPN services.

OXT is a ERC-20 token and has a total, limited supply of one billion. OXT is used by bandwidth providers who stake OXT on Ethereum smart contracts in order to operate nodes; clients pick providers randomly based on a weighted stake of the providers tokens. Therefore, it is in the provider’s interest to stake more OXT in order to get a higher probability of obtaining clients and a resulting increase in profit.

The second user of OXT is bandwidth users who pay for the bandwidth they consume. All of these transactions take place on the Orchid Marketplace, which is a decentralized, peer-to-peer network that allows customers (those that want a VPN) to purchase bandwidth from sellers. Additionally, Orchid uses ‘stochastic nanopayments‘ to allow scaling of transaction throughput, which in turn allows for higher frequency sending of packets. Nanopayments also allow the system to have lower transaction fees.

There are numerous other VPN services available that also market themselves as being highly secure; for example, ProtonVPN uses 4096-bit RSA, has developed strong protocols, has a no-logs policy, and states that, since it is based in Switzerland, it cannot be forced to spy on users unlike those based in ‘Fourteen Eyes’ countries. However, since it is centralized, if rules and regulations regarding data storage change in the nation, the way the system operates may have to change. Additionally, 60% of the free VPN service providers on popular app stores are based in China, where there are strict regulations on how VPN service providers must operate. These laws and regulations actually contradict the central aspects of having a virtual private network.

Additionally, there are still many security flaws in decentralized VPN models. In the case of Orchid, one’s final HTTP request can be available as well as the destination address, hostname, packet size, and the timing of the packets to the Orchid node monitor. Orchid attempts to solve the problem of node monitors’ tracking information by providing a curated list of providers, however, these operators may be bad actors. However, those that give away their IP address on the network are also vulnerable because, if a user commits a crime, their IP address will be at risk of being culpable.

A decentralized peer-to-peer VPN network is not a new idea. It can be compared to the Tor Onion Routing Network which is free to users. An ideal decentralized VPN service would encrypt information in a way where end connectors would not be able to see a user’s information while also providing security for the IP address lender. Unlike centralized VPNs, which have servers around the world that can handle the network, peer-to-peer networks seem challenging to scale as there must be enough nodes operating inorder to keep up with throughput. However, there is a trade-off that users will have to make with trusting a large entity or an individual with their information.