What are Decentralized VPNs?

A decentralized Virtual Private Network (dVPN, or DPN – Decentralized Private Network) is a relatively new concept. It combines several technologies of distributed computing with the features of a traditional VPN: connection encryption and changing the IP address. Here we explain what this system is and how it is different from regular VPNs so that you can choose the right solution for yourself.

First, a little reminder about traditional VPNs. VPN structure consists of two main things: 

• Client – the user. It might specifically mean a single VPN app, or the device it works on, or the person who uses both.

• Server – it manages the system, allowing users to connect. It is owned by the provider – usually a workplace or a commercial service. In theory, anyone can establish a VPN server on an ordinary laptop. It receives clients’ web requests and forwards them to real destinations with changed IP addresses.

And why is this system called a ‘network’, as there are only two points involved? It was invented as an extension of an inside network, where normal access was possible only from certain computers – like in an office. A logical (e.g. virtual) tunnel provides a safe link from anywhere outside for remote access.

What is a decentralized VPN?

Decentralized VPNs don’t have a provider as a single supervising entity. This simple feature has complicated consequences. Let’s list the crucial traits of dVPN to get a clear picture.

1. Naming. VPN providers offer many servers around the world. They are often leased to obtain just enough computational power to run the VPN. An equivalent of a server in dVPN is called a node. It means this system has no center. It’s a network of many nodes.
2. Structure. In a decentralized VPN service, the line between the user and the supplier is blurred, as anyone can become both. People offer part of their network bandwidth to serve others. Thus, even a regular laptop can become an encrypted Internet gateway for someone across the globe. Technical details vary between solutions. Many aren’t technically VPNs at all, being similar to the Tor network.
3. Payments. Most systems use cryptocurrencies for direct payments, which in turn can be bought via online payment services or credit cards. As a general rule, you either sell the bandwidth or buy it. Cost calculation depends on the specific solution and its capabilities. Interestingly, several systems run on their own currency, closely tied to the network itself.
4. Management. Just because there’s no central provider doesn’t mean nobody coordinates the network of nodes. There is always an online platform, where you can set up your account and download the appropriate software. A company or a community of enthusiasts supports the whole project: website, app development, payment systems, marketing, and fundraising. But they have no direct power over the nodes.

A neat trick is often used to enhance the overall quality of dVPN: server incentivization. The rule is: the more users connect to your node, the more cryptocurrency you get. This encourages anyone willing to make a profit to provide high bandwidth, with additional security features whenever possible.

Is a decentralized VPN safe to use?

This relatively new technology has emerged as a consequence of new trends in the evolution of Web technologies. As we’ll see, they all have strong security features.

Distributed computing means employing the computational power of many ordinary PCs instead of one supercomputer. Sharing the surplus of a device’s resources has been used for various projects for many years now. One of the most famous examples was SETI@home. To protect whatever was being processed, encryption was always of top importance. As it turned out, this applies to VPNs, too. Instead of processing power, people share the bandwidth they don’t use.

No central entity means nobody is able to oversee all the traffic in the system. No one can log everyone’s online activity. Many systems are more similar to Tor than a VPN, which makes it near-impossible to trace anyone at all. Every connection has one or more relays, in which every node knows anything only about its immediate neighbors. Moreover, the lack of a center means certain failures are less likely to occur. A faulty software or major hacking attempt could impair the whole center-dependent system. That’s impossible in a distributed environment.

Cryptocurrencies have certain cryptographic requirements, which enforce secure transactions. They allow making nano payments – transferring the tiniest amounts of assets. Over time, they add up for profit. This way, selling your bandwidth can become an income.

Open source technology. Most systems have repositories on GitHub, where anyone can check the software for faults. This approach has repeatedly proven to result in top-quality programs. Technology zealots put a lot of effort into ensuring they use near-flawless products. They either report bugs or help in development, thus perfecting them for everyone.

Potential dangers of decentralized VPN

The idea of dVPN has noble assumptions: independent, open-source provider of online privacy. It’s the execution that raises concerns. The issue with dVPN is this: your data transfer goes through the hands of strangers. Theoretically, they might be able to use this information maliciously. Practically, the most notable threat is the other way around. What if someone uses your private Web connection to access something illegal? In the worst-case scenario, he may use dVPN to make someone a scapegoat and mislead the investigators.

Which is better: VPN vs decentralized VPN

There is no definite answer here. We’ve covered security aspects, but that’s not all. Let’s look at this from another angle.

Speed is crucial if you’re thinking about streaming videos. There are three major factors that slow down any VPN: 

1. Encryption. Developers can slightly improve the first one by optimizing the app. 
2. Server/node remoteness. The further the node, the bigger the latency. You may need to pick the further ones to bypass regional locks – there’s no way around that. It won’t be an issue, though, if you don’t need real-time interaction. 
3. Node throughput. Decentralized VPNs are more unpredictable than traditional ones. Contributors need to upgrade their hardware to improve speed, which takes time – if they do it at all. That’s the consequence of dVPN being a relative novelty, while traditional VPNs are well-established.

Payments for dVPN are, simply saying, charged per gigabyte used. That’s a big plus: you don’t pay a monthly subscription that you may never fully use. The downside is that it’s hard to predict the costs because the prices are dynamic. They depend on fluctuations in cryptocurrency value and the offers of specific contributors.

Comfort is not the least of netizens’ expectations. Here, traditional VPN mostly wins. Its principle is easier to understand, fees are just regular and stable. The apps have simple user interfaces with little to no manual configuration. dVPNs strive to be user-friendly, but even the basic concept of the user being also the provider is harder to grasp than a simple subscription. To help the users, there is a plug-and-play solution based on a decentralized VPN device. It eases the setup while also enabling manual configuration.

Decentralized VPN is a very interesting concept, definitely more modern than old VPNs, which date back to the mid-1990s. But as for now, the average Net surfer would rather be inclined to stick to the older, mature technology. You’re free to check out the young, crypto-powered, and community-run competitor and learn something new about the Web. There’s no doubt that dVPN will take over part of the lucrative market of privacy-enhancing software. The future shall show us, how much and when.

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