Some of the most notable names in venture capital are backing the idea cryptocurrencies could one day power a truly private internet.
Announced today, Andreessen Horowitz, Blockchain Capital, Compound VC, Crunchfund and Danhua, along with Draper Fisher Jurvetson, MetaStable, Polychain Capital, Sequoia and Struck Capital are revealing a $4.7 million investment in a new startup called Orchid Labs Inc.
Equally impressive, apart from the investors, is the team behind the project, which boasts an array of both blockchain technology veterans and established entrepreneurs.
Co-founders include Steve Waterhouse, a long-time investor with blockchain-focused venture firm Pantera Capital, former Ethereum Foundation developer Gustav Simonsson, Stephen Bell, the founder of Trilogy VC China, and longtime Free Software staffer Brian Fox.
However, it’s the vision that perhaps most distinguishes the Orchid project, with Waterhouse going so far as to frame it as both a rejection of what he called Silicon Valley’s “sharing is caring” culture, and a way to restore internet freedoms that he views as being subverted by such business models.
Waterhouse told The Global Blockchain:
“This is about anti-surveillance and anti-censorship, the ability to not be tracked. We see this not just in China or the Middle East, but in this country, in states that are considered to be free. If you go back in history, there was a lot more concern about privacy on the internet before Facebook.”
For Waterhouse, though, the idea began with a rather personal wake-up call.
Following his departure from Pantera, he said he was seeking ideas in AI and enterprise software, exploring various ideas and inspirations; then, he was hacked and his information exposed.
“That really woke me up,” Waterhouse said. “I was more concerned about surveillance, the idea that we don’t have technologies to let people communicate without censorship.”
Investors such as Ryan Zurer, venture partner at Polychain Capital, struck a similar tone, suggesting an expansive use case that is global in scope.
“Users could be someone in Catalonia who can’t access their government websites or someone in the US who wants to make secure transactions without oversight,” he said.
Still, Waterhouse sees Orchid’s token working within these margins, going so far as to suggest large internet applications such as Facebook could eventually become users of the tech to anonymize their own traffic.
A new VPN
While a white paper for the project isn’t yet available, those close to the project described the code as a more mature offering in what has been a market defined by quick launches.
Still, the offering is not without similarities to the average ICO. For one, the orchid token (CHI) will be issued on the ethereum blockchain, and like projects such as Blockstack, it will be seeking to change internet behaviors.
However, unlike other decentralized internet attempts, Waterhouse said Orchid would offer software for the exit and routing nodes that form the network itself, marking a differentiator, in that the underlying infrastructure wouldn’t be altered.
In practice, users wouls use the internet as they do today, but would exchange tokens with these nodes as a means of protecting their information from internet service providers (ISPs) and carriers, or providing it to an intermediary like a virtual private network (VPN).
The idea is users would purchase tokens from an exchange or earn them by dedicating available bandwidth toward running a node on the network, at which point they would be sent to a wallet application. When users wanted to hide or shield their activity, they could then spend tokens as part of their activities.
“You’re paying to access the relay nodes and [to] encrypt and anonymize the traffic, and all the way along the chain, the nodes are being paid,” he continued.
This doesn’t mean that ISPs and carriers wouldn’t see the traffic, according to Waterhouse, but that it would utilize techniques to make orchid protocol traffic indistinguishable from typical internet traffic.
Here, he said the startup will draw on advisors including Gavin Wood, founder and CTO at Parity Technologies, Stanford’s Dan Boneh, and Alex Lloyd, managing director of Accelerator Ventures.
Ultimately, though, he predicts the technology will be strong enough to prevent governments from compromising the network, hinting at fears that states have infiltrated the Tor network.
“China would be forced to shut down outside internet, or allow our system to work,” he said. “They’re not going to be able to tell the difference.”
But ultimately, Waterhouse said, the orchid protocol will derive value from being flexible within the boundaries of the current internet.
For example, as opposed to restructuring it, as proposed by other decentralized technology enthusiasts, he described the protocol as a layer that would “sit on top of the internet.” This wouldn’t stop users from accepting cookies or engaging in voluntary behaviors that might indicate their information.
Looking ahead, however, it will be some time before users get to test out the software, now in alpha.
As Orchid raised the funds via a SAFT (Simple Agreement for Future Tokens), a legal tool created as a means of funding the future creation of tokens, the team is just now gearing up for a potential market sale. But, a beta launch is not expected until early 2018.
More set in stone are Orchid’s long-term revenue plans, which according to Waterhouse, won’t include seeking to extract payment from the protocol.
Ultimately, Waterhouse believes that Orchid will be best incentivized by ensuring the protocol’s long-term utility by holding a stake in its token supply, which would in turn also ease the end-user experience.
“That’s the model for the investors and the company, we hold tokens.”
Glass globe image via Shutterstock
‘The Global Blockchain’ is a leader in blockchain news. ‘The Global Blockchain’ is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies.
Have breaking news or a story tip to send to our journalists?
Contact us at:
Source: The Global Blockchain
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.