Chinese-led blockchain startup wants to fix privacy issues, only not in China

4 min read
(Image credit: TOP Network)

Messaging apps have made the communication between people effortless. Yet, as users, we have come to learn to take claims like “full privacy guaranteed” and “protected with encryption” with a grain of salt. Now, some companies are turning to blockchain to better protect user data and to keep information such as users’ private conversations, well, private.

Chinese serial entrepreneur Steve Wei and his team have built a distributed network, TelOS Protocol or TOP Network, for communication services such as messaging, calling, streaming, virtual private network (VPN), content delivery network (CDN), and IoT data sharing.

The Silicon Valley-based startup’s mission is to create a permissionless network that prioritizes privacy and security of online communication and shield users’ data from the reach of powerful third parties or hackers.

TOP Network’s research and development team are located in China, but it is not planning to market its product here because the regulatory barriers—such as acquiring the licenses necessary to operate a business—are simply too high.

For Wei, the wiser choice for the company at the moment is to avoid regulatory limitations and setbacks. “Our policy is that if we’re not welcomed or if we can’t conduct our business legitimately, then we have no intention to enter.”

Blockchain and VPN

In 2017, Wei founded SkyVPN, which is a service that lets users access the web privately by routing the connection through a remote server. The concept of decentralization had started to take hold in the communication business around that time, Wei said. He observed that with a centralized VPN, for example, the operator can peek into user data, app use, and browser history. “Immediately I realized VPN should be decentralized and should leverage blockchain technology,” he said.

That revelation eventually led to TOP Network. Prior to that, Wei and his team built two other communication apps—an online phone call app Dingtone and an end-to-end encrypted messaging app CoverMe—which, along with SkyVPN, will be the first three apps to migrate onto TOP Network.

The three applications will channel around 60 million users upon the network’s launch, which is scheduled for late June, the company said. Other businesses will be able to launch their apps on TOP Network as well. The company launched its testnet back in October. 

Different from the traditional client-server model, TOP Network is built upon peer-to-peer communication and storage protocols that allow every participant in the network with idle bandwidth and storage capacity to become a server. The participants receive tokens based on the contribution they make. In late March, TOP Network became the first project to list on Huobi Prime—a new platform by cryptocurrency exchange Huobi that allows participants access to selective token listings.

With decentralized VPN services, the traffic goes through a decentralized network of servers that a centralized operator literally has no control or access to the data. “This removes a major privacy risk factor,” Wei said.

While the ostensible purpose of VPN is to shield user activities from prying eyes, some services collect valuable information along the way for their own benefit, others operate in countries that legally require them to log and retain certain user data.

There are companies with far more nefarious intentions than Facebook that leverage user data for business purposes, Wei said, referring to the “Facebook Research” project that has been found to use VPN app to collect and monitor user data such as web activities and app use. 

Another way decentralization enhances VPN services is to increase its “anti-block capability,” Wei explained that organizations or countries can simply blacklist the IP addresses on the VPN to shut the service down.

Centralized VPN services are more prone to be blocked, according to Wei, and data stored in a central database can be more vulnerable to hacking.

The number of servers multiplies for VPNs that run on decentralized networks. The more servers there are, the more difficult it is to block the IP addresses on the VPN. For SkyVPN, running on a decentralized network can multiply the number of servers to millions.

SkyVPN currently has 18 million users worldwide, the company said. 

By increasing the number of nodes, the level of decentralization also increases. When the network is decentralized enough, a good level of safety is guaranteed, said Wei.

Decentralizing VPN service also means decentralizing the traffic, Wei said, which makes it more difficult for a firewall to recognize the traffic pattern and spot a VPN server.

Greater control

Ziv Keinan, an Israeli commercial-tech attorney specialized in areas including blockchain, cybersecurity, and privacy said blockchain is starting a revolution because for the first time people can take ownership and control their data. His clients include companies based in China.

Some internet services may seem free-of-charge, but users are paying with their valuable information and data, which these corporations relentlessly collect. That is something that people are beginning to realize, according to Keinan. The sheer amount of data that is collected on each of us is unthinkable. “If anyone decides to sell my data, I’d like to be able to acknowledge and confirm it,” added Keinan.

Another characteristic of distributed ledger technology is its openness, Wei said, adding that algorithms and source codes are transparent and open-sourced—people can challenge them, find loopholes, and make them more secure. When the infrastructure is not decentralized enough, it could be vulnerable to not just cyberattacks but also powerful corporations and organizations gaining control of the software and operation, Wei said.

Correction: This article previously incorrectly stated that Huobi Prime is a platform that allows participants access to ICOs of selective projects. Huobi Prime is a selective token listing channel, not an ICO platform.