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Decentralized VPNs: What they are and how they work

DVPNs are worth considering if you’re interested in more privacy and less censorship, but they’re also risky due to their decentralized structure and volunteer-based operation model. Learn how they work and how they differ from traditional VPNs to decide if dVPNs are for you.

Decentralized VPNs: What they are and how they work

What is a decentralized VPN?

Decentralized VPNs (decentralized virtual private networks, or dVPNs) are VPN services that don’t have a single entity for centralized control of their server network. Instead of having a VPN provider in charge of the network, volunteers operate individual nodes in the network.

A decentralized VPN encrypts and routes your online traffic through multiple nodes.

How does a decentralized VPN work?

A decentralized VPN relies on a decentralized structure rather than traditional centralized servers with a single VPN provider in charge. The decentralized VPN service is based on a peer-to-peer model, where volunteer users operate their nodes in the distributed network with the help of distributed ledger technologies (DLTs) like blockchain and smart contracts.

Centralized vs decentralized VPN

Any user can become a service provider and operate a node in the decentralized VPN network. A node in this context is a dedicated server machine, computer with dVPN software installed, or any device that helps route and secure internet traffic. Unused network traffic is also considered a node.

Operators of these independent nodes apply blockchain technology to manage the network securely and transparently. They also use smart contracts to automatically enforce network rules and transactions without the need for a central authority. Community members are compensated in cryptocurrency or special tokens for operating the nodes and selling their unused network traffic to others.

Advantages and disadvantages of using decentralized VPNs

Decentralized VPNs help you to bypass censorship and surveillance and do not keep centralized logs, which adds to your online privacy and security. So you might benefit from a decentralized private network if your country has rigid internet regulations.

However, some advantages of dVPNs can be easily turned on their heads. Since anyone can operate a node, the reliability, internet speed, and security of the dVPN nodes vary significantly. Using dVPNs is secure as long as node operators follow secure practices. Malicious actors might also set up nodes to spy on people.

DVPNs are also complex to set up and use, making them an option for tech-savvy users only. With a smaller user base and limited customer support, using dVPNs might be more complicated than you’d like.

Advantages of decentralized VPNsDisadvantages of decentralized VPNs
Enhanced privacy. They provide you with a private internet connection by encrypting your online traffic and mixing it with others, making it harder to trace. Also, they often do not store logs or user data.Slower speeds. Your connection speed might be slower due to routing through multiple nodes.
Security. Data encryption and distributed network architecture reduce the risk of centralized data breaches and attacks.Security risks. The decentralized nature and volunteer-based model means trusting unknown node operators.
Resistance to censorship. With no central server to target, it’s difficult for authorities to censor or block a dVPN. It reduces the risk of data logging and surveillance.Complexity. Non-technical users might find it too challenging to set up and use decentralized VPNs.
Resistance to shutdown. A decentralized VPN is difficult for authorities to shut down or regulate, making it suitable for regions with restricted internet access.Limited user base and customer support. A smaller user base means fewer available nodes and a slower performance. Your customer support will also be limited.
User incentives. Users are compensated for operating nodes, which motivates them to strengthen the network and increase its resilience.Regulatory ambiguity. The legal status of dVPNs can be unclear or vary by region, potentially putting users at risk of unknowingly violating local laws.

Differences between centralized and decentralized VPNs

The main difference between a centralized and decentralized VPN is that a decentralized VPN service operates a peer-to-peer network of independent nodes, managed by individual users. In contrast, a centralized VPN service runs a centralized VPN network with a single entity at the helm. These are known as traditional or regular VPN providers. Centralized VPNs route your traffic through a secure VPN tunnel, while decentralized VPNs route it through the nodes.

Reliable decentralized VPNs are resistant to censorship, offer privacy, and incentivize users with crypto payments. However, they offer slower speeds and are difficult to use compared to regular VPNs.

Decentralized VPNs are said to keep no centralized logs. However, some logging might be necessary to protect against IP blocklisting. Quality centralized VPNs maintain a no-logs policy, regularly backed up by independent audits, matching the privacy and security of reliable decentralized VPNs. So if you are deciding upon which service to use, make sure to read its terms of service before signing up.

Centralized VPNsDecentralized VPNs
Control and ownershipControlled by a central provider or company.Operate on a peer-to-peer network with no central control.
Privacy and anonymityRoute your traffic through a secure VPN tunnel. Quality VPNs maintain a no-logs policy.Provide enhanced privacy and anonymity due to node mixing. Do not keep centralized logs.
SecurityVulnerable to central points of attack or failure.Distributed architecture reduces security vulnerabilities. But the node itself can be set up by a malicious actor, increasing security risks.
Censorship resistanceVulnerable to government censorship and blocking.Difficult for authorities to censor due to the decentralized nature. However, authorities can set up nodes to track users.
Speed and performanceTypically offer faster connection speeds.May have slower speeds due to multi-hop routing.
User base and nodesLarger user base and numerous servers worldwide.Smaller user base and fewer nodes, potentially leading to slower performance.
Ease of useMostly user friendly with dedicated apps and client support.May be difficult to set up and use. Offer less user support.
CostQuality VPNs require a subscription fee.Users pay in cryptocurrencies or tokens, or contribute to the network by sharing their own bandwidth and resources. Some accept traditional payment methods.
AccountabilityThe company that owns the VPN service and adheres to local lows is held accountable.No single entity to hold accountable. Different nodes have varying legal compliance and accountability standards.
Use casesUsed for general online privacy and security.Well suited for users in regions with restricted internet access or censorship.


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