Decentralized VPNs: Surfing a New Wave of Privacy

Key Insights

• Commercial VPNs are heavily centralized and pose a risk to user privacy. Decentralized VPNs could position themselves to gain market share in a rapidly growing multibillion dollar market.
• Due to the physical requirements, hardware dVPNs can struggle from a scalability perspective. However, software dVPNs allow anyone with an internet connection and a computer to serve as a node.
• Hardware dVPN operators generally contribute bandwidth to a shared network while software dVPN operators individually sell their bandwidth on a peer-to-peer marketplace.
• Following the footsteps of successful Web3 infrastructure projects like Helium and Filecoin, dVPNs aim to incentivize operators using token rewards to build out a distributed network.

From 2016 to 2020, the VPN market grew from $16 billion to $30 billion, with heavy user interest at both a business and personal level due to possible cyberthreats. As a result, the VPN market is expected to surpass $92 billion by 2027.