Illusion of privacy vs. privacy

Is unrestricted internet access something you should care about?

Let’s look at some fundamental internet usage statistics: 60% of the world’s population utilizes the internet for quick information, entertainment, news, and social connections, yet 80% do not have access to an unfiltered internet. While some nations allow citizens to use a VPN to access restricted content, several countries have outright bans on VPNs, including China, Russia, Belarus, North Korea, Iraq, and Turkey. The Asia-Pacific region leads the world in VPN use, with 35% of VPN users in the area and 61% of Indonesian Internet users. Censorship is rising, with China, North Korea, and Iran at the forefront.

Why has there been such a spike in the use of virtual private networks (VPNs) recently? Let’s look at what a VPN is and how it works.

What is a VPN?

VPN, or virtual private network, is an encrypted connection from a device to a network over the Internet. The encrypted connection helps ensure that sensitive data is safely transmitted. In simple words, VPN protects a user’s identity and ensures online privacy in real-time by encrypting transferred data.

How does a VPN work? What are its benefits?

By routing a user’s IP address through a VPN host — a specially configured remote server — a VPN hides the user’s IP address. When a user connects to the Internet using a VPN, the VPN server becomes the source of the user’s data. This implies that a user’s Internet Service Provider (ISP) and other third parties will be unable to view the websites that the user accesses and the data communicated over the internet. While VPN cannot make online connections completely anonymous, it can act as a filter, transforming all data into unidentified data. Even if someone could access a user’s data, it would be useless.

Increased functionality, security, and control of the private network are all advantages of using a VPN. The VPN industry is expected to reach $31.1 billion this year.

Individuals, remote employees, and organizations who wish to keep sensitive information safe from prying eyes use them frequently. According to VPN Usage Statistics from 2022, more than 31% of Internet users utilize VPN services. More than half of VPN users use it to safeguard their privacy when using public Wi-Fi. Other notable advantages include anonymous surfing, access to prohibited sites, avoiding bandwidth throttling, disguising browsing activity from the government, accessing blocked information and receiving discounts while buying online.

These VPNs are often referred to as traditional or centralized VPNs (cVPNs). As the name suggests, centralized VPNs rely on centralized servers to retrieve and send data. The information is then kept in a single location that may be hacked, exposing the information to third parties. So, what can be done to improve these security concerns?

Decentralized VPN

This is where the concept of decentralization comes into play. Decentralized VPN, or dVPN, is provably end-to-end encrypted and is built on a blockchain, a decentralized database that is shared among the nodes of a computer network. Since it is decentralized, data is not transmitted through a single central server, but it is scattered over many nodes, which are random individuals located all over the world.  A user’s identity or online activity is unknown to a single node.

We can refer to a dVPN as a peer-to-peer network of privately held servers that are not controlled or administered by a single entity.

The benefits of dVPN are similar to those of a standard VPN, but with a difference of enhanced security and transparency in data transmission.

What is the difference between VPN and dVPN?

1. Centralized servers/decentralized servers

While cVPN relies on a central server, the whole dVPN network is spread across nodes, which might be a computer or a system. Because there is no central point, hacking or compromising this network is almost impossible. 

2. Closed source/open source

Standard VPNs are closed source, which means that consumers have no idea how they function or if they are encrypting their data or keeping logs. Users have no choice except to believe the VPN provider that there is no backdoor. dVPN, on the other hand, is open source. Anyone with a basic understanding of blockchain technology may access the source code on GitHub, investigate it, and ensure no logs are kept.

3. Data log/no data log

Centralized VPN services can be compromised. Over the last several years, we’ve seen plenty of data breaches, including one in which the credentials of over 21 million mobile VPN app users were swiped and sold online.  Furthermore, data can be controlled and manipulated by search engines and social media platforms in order to serve customized ads, spread fake news, and suppress the truth. Users’ data is not stored by dVPNs, which can be verified thanks to the open-source code.

4. Energy consuming/energy efficient

Companies that provide cVPN service require data centers that can scale up their energy and hardware requirements over time. On the contrary, dVPN utilizes the shared bandwidth of the global node host community. It thus recycles more and more bandwidth bringing energy efficiency and lower cost for consumers

5. Prone to censorship/censorship resistant

Traditional VPNs can be partially or entirely controlled by authoritarian regimes because they must conform to rules and regulations established by the nation where servers are located. In China, where the government controls the Internet, using VPNs that have not been certified by the authorities is prohibited – VPNs must provide the government with backdoor access to be approved. The first formal VPN ban was imposed in 2021 in Russia, where censorship has skyrocketed, and the phrase “free speech” is only seen in the literature. People only have a few options for getting critical information as the list of forbidden VPN providers grows. Because dVPN nodes are hosted by community members, they are not bound by government regulations and can circumvent any limitations that may be in place.

Importance of Web3

In the last two years, Web3 has been the buzzword used widely. This implies that the web is undergoing an upgrade. But more than an upgrade, Web3 is a movement and a paradigm shift from the known problems that arose from the Web2 world. Tech giants have been the clear winners in the era of centralized products/services, using the Internet as a platform for selling their products and at the same time collecting information about their customers.

The services offered by search engines and social media platforms are mostly free, so as they say “when the service is free, then you are the product.” Meta is one of the most infamous companies that grew to a mind-boggling value of over half a trillion dollars in market cap thanks to their business model of selling users’ data and then throwing targeted ads at them. Web3 is the long-awaited solution for regular users to take back and own their data. In this case, the consumer can decide if he wants to share the data and get paid for doing so directly. Taking away the power from tech giants to make huge profits from users’ data and giving this possibility to the users can be seen as a tool for fighting wealth inequality, all while respecting data privacy. So what is the link between Web3 and decentralization? There is no owner of the network, no central point of failure, and the profits are distributed among all the network participants.

Role of DAO

Decentralized autonomous organizations or communities without a centralized leader are a new type of entity. Native to the Internet, managed by its members, and fully transparent, this technology has the chance to revolutionize how business is conducted on the Internet with strangers you have never met before. DAOs create the opportunity to create online entities comprised of people all around the globe without the need for centralized control. Nodes, validators, or even full-scale projects are now easier to develop when all you need to trust is the verifiable and transparent DAO code. When there is no owner, operations are executed by code. From spending to protocol changes, all processes need to be voted on by DAO members. This is how legal entities will form and operate in the Web3 space.

An example would be a group of people forming a DAO for hosting nodes on a decentralized virtual private network. They can fund the project, rent the place, set up the infrastructure, and later share the profits between the members in an automated manner. All this without the need for accountants or lawyers.

What will the future hold?

Due to privacy, security, and risk concerns, VPN adoption will continue to rise in the future.

Even though some consumers are aware of data tracking and tolerate it for the benefit of convenience, more and more consumers are choosing to keep their data private. There are journalists who expose the naked truth about authoritarian governments and the situation on the ground and others who voice their opinions online in opposition to the ruling party’s point of view, leading to fines and even detention.

Due to the lack of tools to tackle current difficulties, the sustainability of centralized VPNs in the wake of expanding authoritarianism, censorship, internet bans, and attack on press freedom is in jeopardy. With the evolution of Web3 and decentralization, online privacy and freedom of expression may finally reach their full potential. Users may be confident that their data is protected, encrypted, and not shared with any third parties when using a dVPN like the one based on Sentinel. Additionally, anyone can set up a node and begin sharing spare bandwidth, reducing their carbon footprint while earning passive revenue.

Your data, as well as your future, is in your control.

Dan Edlebeck is the cofounder and CEO at Exidio.