Technology hype is a wave. Sometimes you get caught up in the current. Some of these new technologies aren't new. They're just repackaged and updated for today. What about decentralized VPNs (DPNs), then? Are they more reliable than traditional VPNs?
Background: How a VPN Works
Before we can get into the business end, it is essential to establish the rules that govern how VPN services operate to ensure a secure internet connection. It is pretty simple.
The client (read: application) on your device connects to the VPN server.
An encrypted connection is maintained between the client and the server.
The server encrypts the data and forwards it to the server or website you visited.
This is how any VPN provider - regular, decentralized, even technically not a VPN Tor - works. It's just one part of the picture.
How a Decentralized VPN Operates
A decentralized VPN means a VPN without central control over its servers. Instead of a single VPN provider providing and maintaining servers, VPN servers can be hosted by multiple users. They may be installing dVPN software on home computers or dedicated servers. Based on the amount of use they get, hosts are compensated.
The experience is not that different for the regular user: you open the app and choose the server location. As we will see, the entire system behind this process is much shadier than you might think.
Is It Safer to Use Decentralized VPNs than Central Ones?
The answer will not be easy or short, but it's sure to surprise you. However, the answer is no. Why? Why? Because a DPN requires you to trust more entities than a central VPN.
The key takeaway: Virtually all VPNs are built on open-source VPN protocols.
DPN Marketing likes highlighting that it uses open-source software that anyone can verify for faults. Guess what? Regular VPN providers also use open-source VPN protocols (there's a good reason OpenVPN is so popular). Although you cannot always see the inside of the implementation, data-stealing information can still be found elsewhere, such as on the server.
Even though VPN apps are not open-source, curious researchers still need to find security flaws and malicious features. For example, they discovered severely compromised Android VPNs.
The key takeaway: "Decentralized servers" means that more people could potentially steal your data.
DPN's attack on VPN providers' reputations concerns the possibility that one company could steal all your internet traffic as it passes through its server. The server has the IP address and online destination of the individual. It also has access to all unencrypted (except HTTPS) communications between them. You can't forward encrypted data as the destination wouldn't be able to read it.
That is true. It has always been stated that you must be careful when choosing a VPN service, checking their history, audits and the like. This is because trust is the foundation of this business.
With regular VPN services, however, you need only to trust one company. The company that is visible to the public conducts audits to verify its credibility, has an interest in network security, etc. It would help if you trusted each paid volunteer using a distributed VPN.
It was discovered recently that around 900 Tor nodes (roughly 10%) were set up to spy on the network's traffic. This is possible with distributed VPNs.
The key takeaway: It is easier to compromise decentralized VPN servers than Tor nodes.
Let's now turn our attention to servers and nodes. Tor, a decentralized network, uses three connections per connection. None of them has full access to the connection's details. To be malicious and most likely state-sponsored, third parties must compromise at least two nodes of the relationship. They can hope for the best because connections are randomly drawn and redrawn.
You can only compromise one node of a VPN connection to create a decentralized VPN. A decentralized VPN is not intended for security-minded users. It is essential to allow them to choose the server, unlike Tor. You can select the closest server to you (for the fastest speeds) or a specific location (to meet a particular need).
Malicious (and sometimes state) actors aren't just interested in spying on people. They can also narrow down the profiles of people and establish their nodes to target their potential targets. They'll likely be connecting to Los Angeles servers. Set up Los Angeles nodes.
Here's the fun part: The decentralized VPN scheme that incentivizes cryptocurrency can simplify it.
The key takeaway: Server incentive makes it more profitable for wealthy bad actors who compromise nodes (like security agents).
Due to their connections to crypto, decentralized VPNs have been increasing. You can read their websites and see that crypto has nothing to do with VPN connection improvement.
Regular users can enjoy the residential IP addresses provided by volunteer nodes. This would allow them to bypass streaming service blockages (typically targeting IPs located in business areas). However, this is independent of crypto. It is a way for anonymous payment to be used alongside "nano transactions", allowing you to pay only the VPN bandwidth you use rather than a subscription fee.
You can recall old data plans that cost per megabyte.
The money you pay is supposed to go to paid volunteers who run the servers. You get more crypto the more people connect to your network. This should incentivize you to keep your node running smoothly and provide good bandwidth. This is contrary to the idea that anyone could set up a node to sell their network traffic.
So if you're CIA and setting up nodes in LA apartments with quantum-space-age-glass-fibre-turbo connections that offer the most bandwidth, you're beating out the competing nodes and grabbing all the data and also being compensated for your spying.
Certain decentralized companies (the law team won't allow me to name names) require that node providers stake (read, invest) crypto into their nodes. You can route more users to the node the more you invest up to your bandwidth limit.
Imagine you are a Russian three-letter agency whose targets use servers in Warsaw. You need to set up some servers in Warsaw with insane bandwidth, stake them at the limit and let them take over most of Warsaw's traffic.
While crypto-schemes are not new in rewarding already wealthy people, it is the first time they have blatantly favoured state agencies with large sums of money.
The key takeaway: Crypto payments are accepted by regular VPNs.
The only positive thing is that you can buy a VPN with crypto. This is something that every trusted VPN developer supports.
However, it doesn't increase transparency in any way. While payments are recorded on a blockchain, it doesn't make malicious node providers more easily identifiable. State security agencies and other malicious agents lie as quickly as they breathe. They can create a bazillion cryptocurrency wallets for John Doe or Nursultan Tulakbay, and the blockchain will reveal that the money did indeed pass their fake hands.
They also have the money to deceive on a mind-boggling scale. Crypto can't stop them.
Key Takeaway: Crypto microtransactions over subscriptions have one real advantage: You can pay for the bandwidth you use.
Two things are at the heart of decentralized VPN's crypto emphasis:
You are usually paid in DPN's cryptocurrency. Investing in new cryptocurrencies in 2022 is one of the best ways to be scammed.
You only have one real purpose: to be able to make small payments (of variable price as cryptocurrency is not stable) for bandwidth.
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