Understanding Mysterium:
The Decentralized VPN Provider
What are VPN’s?
Virtual Private Networks, or VPN’s are a way to mask a user’s internet activity by making it appear to come from another location. VPN’s work by bridging a user(x) to a host(y) through a secure, encrypted pathway which outputs all activity from user(x) to host(y).
A VPN’s purpose is providing a secure and reliable private connection between computer networks over an existing public network. These fundamental use cases areemployed by a wide array of people, companies, and machines and is an immensely valuable industry (currently valuated at ~45B, and expected to reach 106B by the end of 2022 via MarketResearchFuture).
Ordinary people use VPN’s to avoid adversarial surveillance and restrictive, location-based access controls (known as site-to-site vpn’s). Corporations soften use it to allow remote workers and machines to connect directly to corporate servers, allowing them to access protected data in a secure way (known as remote user-access vpn’s).
On the internet, data is broken into ‘packets’ and then transmitted across computers on the network. With VPN ‘tunneling’ these packets are first placed within another packet before they are transmitted — thus creating layers of encryption (called encapsulation), where end nodes unwrap added layers before outputting the original packet.
Disadvantage Associated with Current VPN Business Models
Many VPN services exist on the internet today, however a large volume of them are unreliable due to the fact that there is no real litmus test for ensuring their quality of service across the internet.
The Centralized VPN business model creates a ‘weak link’ where one entity controls your data. This singular entity is subject to regulatory compliance — and thus is likely to create data logs (with many going as far as preforming traffic analysis). Thus, while a layer of security may be added through encapsulation–this layer may be easily peeled away central regulatory authorities.
In addition, this model also accrues value to a unnecessary middlemen, which have gained an advantage in providing VPN services due to raised marketplace barriers to entry.
Thus, from an economic standpoint, the model is inherently inefficient — and looks more like oligopolistic competion, rather than perfect competition (thus limiting the overall market surplus potential).
Finally, the code associated with these providers is closed, obfuscated, and inaccessible to users. This makes auditing and comparing VPN providers extremely difficult.
However, like many others on the internet, this centralized model may soon be disintermediated — bringing us to the:
Mysterium Network: An Open-Source software powering a decentralized network of VPN nodes
The Mysterium foundation has launched its plan to build the Mysterium Network, which commodifies the current VPN provider landscape in much the same way as networks like Storj, Sia, and Filecoin are attempting to do with data storage.
At its essence, the Mysterium Network is essentially a protocol which enables a permissionless marketplace for VPN user(x) to meet and create smart-contracts with VPN host(y) providers, which are looking to sell their unused network traffic.
Mysterium uses the Ethereum Blockchain as the backbone for smart contracts between participants in the network. Ethereum is used as a means to identify, connect, and form transactions between the market participants.
Identity
The MYST token is used as a forfeiture of value to ensure identity reputation while dis-incentivizing identity fragmentation its associated attacks, like Sybil.
Connection
According to the whitepaper, Mysterium will support multiple types of messaging channels. Each channel type may employ a different carrier protocol and communication scheme (i.e. — direct node-to-node, relay over centralized service, relay over p2p overlay). A dialogue between nodes can be started over any type of messaging channel available to both nodes participating in a dialogue. To keep dialouge open, some messages have to be exchanged regularly.
Payment
Mysterium will implement a state-channel payment method on the ethereum blockchain where exchange will be facilitated by unlocked MYST tokens.
Advantages of a Decentralized VPN Service
As we can infer by studying the centralized model for VPN providers, a decentralized model would reduce many of the risks associated with uncertainty around central providers. As we can see in the chart below, the Mysterium Network also has some advantages over relay-access networks, like The Onion Router (TOR).
