What is the Orchid Protocol?

The Orchid protocol is a peer-to-peer privacy network built on the Ethereum blockchain. It was created to serve as a decentralized marketplace for internet bandwidth. When users purchase bandwidth from bandwidth providers within the Orchid protocol, they can use the protocol’s highly secure virtual private network (VPN).

As a prerequisite, bandwidth providers in the Orchid protocol are often required to stake a certain amount of the protocol’s token (OXT), a system known as stake-weighted random selection. The higher the amount of OXT tokens staked by a bandwidth provider, the easier it would be for such a provider to attract users seeking bandwidth services.

Besides providing highly secure VPN services through blockchain technology, the Orchid protocol also has a probabilistic nano-payment system that makes it easier for its users to purchase bandwidth from bandwidth providers.

Instead of paying for bandwidth in full, the probabilistic nano-payment system allows orchid users to pay in bits and for only what they use.

History of the Orchid Protocol

The Orchid protocol was born out of a simple vision: to enable secure access to the internet for everyone and everywhere. To make this vision a reality, Steven Waterhouse, Jay Freeman, Brian J Fox, and Gustav Simmonson created the Orchid protocol in 2017.

Notably, all of the protocol’s founders had impressive software engineering and finance backgrounds.

Steven Waterhouse holds a PhD in Computer Science and Engineering from the University of Cambridge and was once a partner at Pantera Capital and a board member at the Bitcoin exchange Bitstamp.

Jay Freeman is a Software Engineer who developed Cydia, a software used on millions of jailbroken iOS devices.

Brian Fox is a Computer Programmer who first wrote the GNU Bash shell and command language. In the mid-1990s, he was also responsible for creating the first interactive online banking system for a U.S. bank, Wells Fargo.

Gustav Simmonson is a Software Engineer who was among the developers who contributed to the launch of Ethereum in 2015.

How Does Orchid Protocol Work? Orchid Accounts, Probabilistic Rollups, Orchid Dapps, Orchid Client and Probabalistic Nanopayments

Orchid Accounts

A core component of the Orchid protocol is the Orchid account. Users usually create an Orchid account to carry out transactions within the Orchid network and store and manage funds within the network.

There are two sets of keys which are often used to manage an Orchid account:

• Funder wallet key
• Orchid L2 Keys or Orchid identity key pair

Funder Wallet Key

The funder wallet key is the wallet address of the layer one (L1) wallet that is attached to the Orchid dapp. The Orchid dapp serves as an intermediary between the Layer One wallet and the Orchid account.

A layer one wallet is often used to fund an Orchid account. This is because Orchid users cannot fund their accounts directly.

Orchid L2 Keys (Orchid Identity Keypair)

The Orchid L2 keys allow users to manage the funds in the Orchid accounts directly. It comprises two keys:

• The public key: This is the key that is usually shared when an Orchid account is to be funded.
• The private key: This is the key used to authorize and sign transactions in an orchid account. It should be kept secret.

Although Orchid accounts can run on several supported blockchains, these blockchains cannot automatically scan and identify Orchid accounts. Therefore, users need to specify their Orchid account before carrying out any cryptocurrency transaction.

To specify an Orchid account, a user will need to indicate the L1 address (funder wallet address), L2 address (the public key of the orchid account), and specify the L1 blockchain.

Probabilistic Rollup

The probabilistic rollup is a layer-two scaling solution that makes Orchid unique and sets it apart from traditional VPNs. It allows Orchid users to make nano payments for bandwidth services.

Orchid nano-payments work on a simple principle: Instead of giving a provider $1 one hundred times, giving them 100 scratch-off tickets with a 1% chance of winning $100 is better. Even though the provider receives $100 on average, you only pay for one transaction instead of one hundred.

Orchid Dapp

Another core component of the Orchid protocol is the Orchid dapp. The Orchid dapp is a hosted front-end component that helps users to create and manage their Orchid accounts. It also helps connect the L1 blockchain wallet to the L2 Orchid account.

Orchid Client

The Orchid client is an open-source virtual private network (VPN) that supports decentralized Orchid accounts, Wireguard, and OpenVPN connections. It is the infrastructure that allows Orchid users to connect to the different bandwidth providers within the Orchid ecosystem.

Setting up an Orchide client account is relatively easy. To fund the account, click the “Get Started for $1” button on the Orchid app. Orchid accounts are funded with xDAI. Once the xDAI purchase has been completed, users can connect to Orchid’s decentralized VPN. The provider allocated to each user depends on the amount of OXT the provider staked.

Probabalistic Nanopayments

Probabalistic nanopayments enable users to save costs on transactions. To achieve this, the protocol sends lottery tickets for providers to substitute for funds. Rather than paying for every service, users can combine payments into one cumulative payment. Thus, users can save transaction fees that would have been incurred for each payment for bandwidth, storage, or API calls.

Features of Orchid Protocol: Onion Route, Managing VPN Servers, Traffic Analyzer and Data Storage

Onion Route

Orchid protocol is the only multi-hop VPN (virtual private network) that allows users to create an onion route through multiple independent VPN servers.

The onion route feature provides an extra layer of encryption, a much higher degree of security, and privacy to users’ data, thus setting Orchid apart from traditional VPNs, which often use a single hop or server.

Managing VPN Servers

Apart from utilizing more than one server or hop, Orchid also has a feature allowing users to choose and add whatever hop or server they want.

To view and change their hops, users can select the “Circuit Builder” in the menu or click the “0 Hop Circuit” button on the main page.

Source: docs.orchid.com

Traffic Analyzer

Orchid also has a built-in “traffic monitor,” which can analyze and troubleshoot traffic within the Orchid network. To use this traffic analyzer feature, users can tap on the traffic light icon on the home screen or select “Traffic Analysis” from the menu.

Data Storage

The Orchid protocol has a secure and decentralized storage initiative. It implements advanced erasure coding, rigorous audit mechanisms, bonded commitment, and a stake-weighted random selection, making Orchid’s data storage system superior to traditional bandwidth providers.

What is the OXT Token?

The OXT token is the native token of the Orchid protocol. It is the token used to carry out transactions within the Orchid network.

Bandwidth providers within the Orchid network often use it for staking purposes (to attract users), while users use it to pay for bandwidth.

Out of the 1 billion OXT tokens created at the time of its launch in December 2019, about 979,778,108 are currently in circulation.

Uses of the OXT Token

• OXT is a utility token within the Orchid ecosystem. A utility token grants users access to certain services within a blockchain network. Orchid users use the OXT token to pay for bandwidth, thus granting them access to Orchid VPN service.
• The OXT token can also be used as a governance token. It gives its holders the right to participate in the decision-making process and development of the network.
• The OXT token is used to pay service fees for all cryptocurrency transactions within the Orchid network.

Is the OXT Token a Good Investment?

With data breaches becoming a recurrent and global problem, more internet users will be compelled to explore other secure ways of protecting their data. Since Orchid is the pioneer protocol utilizing blockchain technology to secure users’ data, more users will be drawn to it.

As the Orchid community grows, more OXT tokens will be purchased. The OXT token has a fixed supply, which is good for long-term growth.

Risk Analysis

Advantages

A significant advantage of the Orchid protocol is the highly secure virtual private network (VPN) it provides to its users.

Unlike traditional VPNs, which use single-hop or server technology, Orchid utilizes multi-hop or different independent VPN servers, which provide extra layers of encryption and a higher degree of security to users’ data.

Another advantage of the Orchid protocol is the probabilistic nano-payment system that allows users to pay for bandwidth in bits.

Unlike traditional VPNs, which are often very expensive, Orchid protocol eliminates that financial strain, allowing users to pay for bandwidth in bits.

Disadvantages

A major disadvantage of the Orchid protocol is its limited adoption. Compared to the 1.6 billion people who are used to surfing the internet with traditional VPNs, the Orchid protocol has a much smaller number of users. Hence, its users may not have much community support.

Another disadvantage of the Orchid protocol is its complexity for non-technical users. Since traditional VPNs do not demand any technical skill from their users, non-technical users who are unfamiliar with blockchain technology or tokenomics might have a drawback when using Orchid.

Compared to some blockchain protocols that incentivize users, rewarding their users for carrying out some tasks within the blockchain network, Orchid does not have any of such provisions. The only way to earn within the Orchid network is by selling bandwidth to users.

Competitive Product Analysis

Hopr, Mysterium, and Boring protocols are some of Orchid’s biggest competitors offering decentralized VPN services.

However, Orchid has a competitive edge over its competitors because it was the first to leverage blockchain technology to provide a decentralized VPN solution.

By leveraging its novel probabilistic nanopayment system, Orchid has a much more competitive edge and advantage over its competitors, making it easier for them to attract users.

How Can You Own the OXT Token?

To own an Orchid token and become a part of the growing Orchid network ecosystem, you can follow the simple step-by-step process.

Set up a Wallet

To own an Orchid token, you need to purchase it from a cryptocurrency exchange. To do this, you need to create a Gate.io account, complete the KYC process, and add funds to the account to purchase the token.

Use the Orchid Token

Once you have your token, you can explore the features and functionalities offered by the Orchid network before using it.

Take action on the Orchid Protocol

Users can sign up and purchase or trade the Orchid tokens here.