Blockchain is a technology that is changing the way we live and work. The potential uses of blockchain include everything from currency to smartphones to how we connect to the internet. There are real benefits for both the security and financial sectors.
Or so it seems at first glance. On the surface, the idea of using a P2P network for internet security would seem like a great idea. Already using secure VPN tunneling for encryption traffic to and from our computers. Why not add another link to the security chain by scattering our connection data to other ethereal winds of the internet?
Blockchain VPN is a great idea, but it struggles to make sense of the practicalities and restrictions that are often placed on this new technology. Blockchain-style VPN services have already encountered a few problems, most of which are contrary to the encryption services VPN users value.
How blockchain VPN works
A blockchain-style VPN works as a P2P network. Each client can have an exit point from their connection by sharing their bandwidth with decentralized service nodes. To encourage service providers to keep nodes, the blockchain component is in the form of crypto tokens. The more bandwidth that a service node provides to users, the more currency tokens it will eventually acquire. The addition of service nodes and shared bandwidth means that more tokens can be exchanged and more bandwidth is created. This makes the network more secure and faster.
Security and privacy can vary greatly depending on the protocols and standards that are in place for each service point. Without centralized control, standard VPN practices such as “no logs” can be difficult to enforce. Blockchain VPN services will eventually be implemented. This network allows data to be transmitted in small pieces to multiple nodes simultaneously. This ensures that if security is maintained at least on one node along a packet’s route, it is impossible to reassemble the packet in its entirety. Although we are still far from this kind of service, blockchain VPN is a good example of a traditional, centralized VPN service. However, there are some obvious downsides.
Blockchain VPN is not widely tested
P2P communication network is not new. The TOR browser has been using this technology for a while. However, the concept behind the few blockchain VPN services remains untested and in development.
The service rollout is broken down into distinct stages. Each service is currently in stage 1, with the exception of a few that are offering this type of VPN. This is the same central server location as most VPNs, and provides most of the security protocol and other exchange services from a managed location. This is the way that virtually everyone uses VPN service.
There are many unknowns involved in network rollout
This Stage 1 rollout will see the decentralization of traffic to service provider nodes. As an incentive, these nodes receive currency tokens to provide bandwidth to their users. Provider nodes have a strong incentive to provide high-quality, secure bandwidth to their customers at this stage.
The problem at this stage is the fact that every provider can have a different quality and service security. Although the overall service provider has established standards for encryption and tunneling protocols, as well as the software that powers the service, there are many variables that can affect each provider’s experience, so your experience may be very different.
Stage 2/3 is further decentralization of individual provider nodes, until the end-point network can be used without the help of centralized nodes. The actual number of provider nodes required for a particular service load is only speculation at this stage. It is not clear when the ratio between service nodes and end-user clients will reach a tipping point. If there are too many users and not enough servers, a network that should be fast by design can slow down as the overloaded nodes struggle with maintaining user bandwidth.
Although companies offering blockchain VPN have most likely already calculated the tipping points and required service nodes, this doesn’t necessarily mean that they are able to apply them in real-world testing. This has made it difficult to determine the performance of blockchain VPN networks.
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How about security?
It is also unclear how secure each node in the network will be. Although the encryption protocol can be generally assured to be secure it doesn’t take into account specific logging policies or procedures, nor do they account for systems that might already be compromised. It doesn’t matter how specific and secure the policies of the service provider are, it will always be more difficult to maintain security on a central node than one that is directly under their control.
With enough node providers, blockchain services can completely eliminate any chance of reassembling a request, even if encryption has been broken. However, this is only possible if the network reaches critical mass. These P2P VPN networks operate in the same way as traditional VPN service providers, but have less control over individual nodes distributed around the world.
Blockchain is just one piece of the puzzle
Blockchain is somewhat of a buzzword at the moment, and the internet community will jump on nearly any labeled “blockchain.” The blockchain aspect is largely used to attract provider node users to the program. These services use the Ethereum blockchain, which is a currency that was created around the idea of decentralized application (Dapps) executions. This currency is used to pay service providers for code execution. In this instance, it’s network routing and encryption.
This method of using the Ethereum Platform is not yet tested. Although there are many Ethereum developers working in a variety of industries, most of these applications are still in their early stages. P2P networks can be used to provide a VPN service. A blockchain VPN will not work correctly when scaled up.
An Ethereum-based VPN encourages larger service providers to adopt it and share their bandwidth in order to earn currency. While this increases the likelihood of functional, established nodes joining the network to provide services for end-user clients and security, it is dependent on each node’s ability to see the value in the chain. If there aren’t enough strong node providers, the network defaults to a standard VPN network with less emphasis on central infrastructure for smooth operation.
Ethereum can be used to attract service providers and is a smart way to do so. Blockchain doesn’t offer any significant advantages over traditional P2P networks, other than a greater chance of network scaling.
Platform adoption is key to real-world scaling commercially
The biggest obstacle to blockchain VPNs is the adoption of the platform by service providers. To scale the network, service providers who are good must be part of it. This will depend heavily on service providers seeing the benefits of being part of an Ethereum network. It is uncertain at this point if that will happen.
Blockchain VPNs, as stated, are not adopted by global providers. In some cases, they can be used to provide normal VPN services with less infrastructure than a VPN provider that is dedicated to centralized servers. This can prove to be a problem, especially during platform rollout phases, as adoption depends entirely on client-server usage. Providers are unlikely to join the network if there aren’t enough users. Clients won’t be able to join the network if there aren’t enough providers.
This is a problem for blockchain VPNs as it means that their success will depend on reaching a critical breakpoint where everything works. This circular dependency can be dangerous if you launch a platform without a user base. Some of this can be circumvented by ICOs, which guarantee a certain number to the network but still fall short of actual operational capacity.
Blockchain VPN: Success, or Failure?
Blockchain VPN’s biggest takeaway is that it could function if …”,, but there are many “ifs” that follow that statement. Even though Ethereum is relatively young, compared to its short life span, Ethereum-based VPN services have many unknowns and are subject to a lot of risk. It is still uncertain whether this will prove to be a success or failure.