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Decentralized VPNs vs. Tor: What’s the Difference?


Digital illustration of a globe surrounded by nodes with labels reading "Tor."
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dVPNs and Tor both rely on nodes to reroute traffic around the world. However, dVPNs incentivize you by letting you get paid for allowing your device to be used as a node, and there are other ways dVPNs could potentially set themselves apart in the future.

Decentralized VPNs (or dVPNs) are an interesting new technology that borrows heavily from VPNs, unsurprisingly, but also from Tor. There are some clear distinctions setting dVPNs apart from VPNs, but how do dVPNs compare to Tor?

How Tor Works

In many ways, dVPNs have more in common with Tor than with regular VPNs—the name notwithstanding. All three types of technology share the fact that they serve as ways to anonymize your browsing. When using any of these programs, you’ll appear to be browsing from a different location than where you actually are and nobody should be able to track you.

Tor does this by rerouting your traffic through so-called nodes. Nodes act like servers, but are usually devices owned and operated by individuals. Your smartphone could be a node, as could your laptop, your gaming rig, whatever you’d like; you could set up a server to act like a node, it’s just not required.

When you connect to a node, you assume the IP address it’s using and thus appear like you’re in the location that node is in. This is great for when you want to access a specific country’s version of a website, or even just to spoof your location to mislead possible surveillance.

However, there’s a catch: when using nodes, the person that runs the node can see what you’re doing, at least on paper. Also, anybody that’s tracking you, like what happens in countries that censor the internet (China and Russia spring to mind), could conceivably see what you’re doing, as well. The connection between you and the node isn’t encrypted, like the way VPNs work.

Node Upon Node

This lack of encryption could be an issue, but Tor deals with it in an interesting way: instead of using a single node, you use more and “hop” between them. It works like this: you “enter” the network using an entry node, then hop to two more nodes before accessing the site you want to visit. The reason for this three-node setup is simple: no one node has all the information.

Your entry node might know who you are, but can’t see where you’re going besides the intermediate node, while the last node—called an exit node, unsurprisingly—can only see the intermediate one, too. The node in the middle can see the exit and entry nodes, but nothing beyond them, either.

On paper, this daisy chain should keep you safe: somebody tracks the exit node, only finds the intermediate node, which in turn only has the data pertaining to the entry node. When using Tor, you’re basically layering the connection—it’s why it’s called the onion router—so you can’t be tracked.

Tor Issues

However, that’s also a significant downside to using Tor: security feels a bit iffy. As there’s no encryption to speak of, it’s theoretically possible to track somebody using Tor, a scary thought for anybody who wants to avoid attention by law enforcement, for moral or immoral reasons.

Another issue is that all this hopping around slows down your speed extremely badly. If your base speed is bad—like it is in the United States and developing countries—then using Tor sentences you to some of the slowest internet you’ve ever experienced.

Finally, there’s also the issue of who runs the nodes: Tor is maintained almost exclusively by volunteers, who are kind enough to sacrifice some bandwidth to help strangers access the internet anonymously. As a result, the Tor network can be a bit small at times, especially if you’re trying to hop around less developed parts of the world.

How dVPNs Could Fix Tor’s Issues

Enter decentralized VPNs. Also known as dVPNs or even DPNs, this technology uses the node-based system of Tor, but boasts that it can improve upon it by using some of the tools employed by VPNs, as well as some very much unique to them. One iandroid.eu article even calls dVPNs the “evolution of Tor.”

One big difference is that dVPN nodes aren’t run by volunteers. Instead, users pay each other to use one another’s nodes, using cryptocurrency minted by the operator of the network. As a result, dVPNs aren’t really services, they’re more like network operators connecting people who want to rent out nodes to people that want to use them—not that these two groups are mutually exclusive. It’s a pretty nifty fix to one of Tor’s real issues.

However, the improvements dVPNs aren’t as clear cut in other areas. One big issue is security: as we discuss in our article on whether or not dVPNs are safer than regular VPNs, it’s hard to pin down exactly what dVPNs do better than Tor.

In an email, Derek Silva, the global community manager for dVPN Orchid, explains that “Orchid and Tor nodes handle logs similarly, in that they don’t log any traffic data and can only see connection data for the next device in the circuit.” When talking to another source, who preferred to be anonymous, they confirmed that this was the case for their network, too.

This means that dVPNs seem to suffer from some of the same caveats surrounding security that Tor does. This includes the fact that having to use multiple nodes means you’ll get a slowdown. In some of the whitepapers we read, there are claims that dVPNs could use regular VPN protocols to connect to nodes, thus negating the need to use more than one, but as far as we can tell, that’s not been implemented yet.

As a result, right now dVPNs are really just a different kind of Tor, where you pay for nodes and hopefully can get paid for putting your devices up for use, too. Other than that, it’s hard to see what the significant differences are right now. Since they’re relatively new to the scene, though, dVPNs will likely evolve as the technology matures.

RELATED: How (and Why) to Get Started With Decentralized VPNs