What is cryptocurrency Orchid (OXT) and how does it work?

What Is Orchid (OXT)?

Orchid is a cryptocurrency-powered VPN which provides a decentralized market for anonymous communication and network routing. Its users can buy bandwidth from a global pool of service providers, and they avoid leaving a data trail as the operation of the Orchid VPN is distributed across a network of users on the Ethereum blockchain. Orchid is the first incentivized peer-to-peer privacy network as it uses its native cryptocurrency OXT to provide the necessary incentives against malicious behaviour.

Users simply download the app to run the Orchid client, which is similar to a typical VPN. One account can be shared across an unlimited number of devices and people. Unlike many VPNs, however, Orchid users can change providers whenever they like by getting randomly reassigned with the click of a button. Orchid users also only pay for the VPN while they are actually using it – there are no charges once it is turned off.

How Does Orchid Work?

The Orchid software uses a custom VPN protocol which runs on top of the common web standard WebRTC. Similar to other systems, like OpenVPN or WireGuard, the Orchid protocol is designed for high performance networking and enables users to pay in crypto for the remote network resources that they request access to.

Bandwidth sellers register their nodes in a provider directory on the Ethereum blockchain which stores metadata such as geolocation and any additional services that are offered. Their registration information is also maintained in a stake registry, which allows the Orchid app to automatically discover random servers in the decentralized network.

Probabilistic Nanopayments

Bandwidth can be paid for with OXT. The bandwidth marketplace is powered by Orchid’s novel Ethereum Layer 2 scaling architecture which uses probabilistic nanopayments. Probabilistic payments mean that instead of sending a $1 transaction, the buyer could send a “ticket” representing a 1% chance of winning $100. With nanopayments though, these tickets represent tiny fractions of a cent.

A sender can deposit OXT into an Ethereum smart contract to open a nanopayment account and then issue nanopayments to service providers backed by the deposit. When the sender issues a nanopayment ticket that “wins”, the provider can redeem it for payment on-chain. Over time, it is expected that the value transmitted on-chain will match the value represented by the probabilistic nanopayments.

Who Are the Founders of Orchid? (History of Orchid)

Orchid was founded in 2017 by Dr Steven Waterhouse, Jay Freeman, Brian J Fox, and Gustav Simonsson. Waterhouse graduated from the University of Cambridge with a PhD in Computer Science and Engineering and has previously been a partner at the digital currency investment fund Pantera Capital and a board member at Bitcoin exchange Bitstamp.

Freeman is a software engineer who developed the Cydia software distribution platform which has been used on millions of jailbroken iOS devices. Fox is a computer programmer who authored the GNU Bash shell and command language and built the first interactive online banking software in the US for Wells Fargo. Finally, Simonsson is an engineer and developer who helped launch Ethereum.

The Orchid team has since grown to over two dozen people based in San Francisco and Berlin, and the Orchid network was launched in December 2019.

What Makes Orchid Unique?

Orchid describes itself as the first incentivized peer-to-peer privacy network and leverages blockchain technology to provide a decentralized VPN solution that avoids the risks and weak points associated with relying on centralized servers.

Unlike commercial VPN services, Orchid users can quickly and cheaply switch between providers when one is blocked or slow. Orchid also sets itself apart from current peer-to-peer systems like Tor by improving performance and quality through crypto economic incentives, while ensuring that the bandwidth supply can scale elastically with growth in demand. Furthermore, the use of the innovative probabilistic nanopayment system means Orchid can scale payment throughput and lower the transaction fees on small payments.

What Gives Orchid Value?

OXT powers and secures the Orchid VPN. Services on the Orchid network are priced in OXT so users must hold the token in order to access those services. As well as users of the services, OXT is also required by bandwidth sellers, who must lock up some of the token into a stake deposit. The more they lock up, the more users and revenue they will attract.

OXT has a finite supply, all of which was created at launch. No new tokens will ever be created, making OXT a scarce asset and meaning that it may be a good store of value in the long term.

The VPN market is worth $35 billion and is booming globally as users try to reclaim their privacy and freedom online. Future growth in VPN demand has the potential to increase the value of solutions like Orchid and its native OXT cryptocurrency.

How Many Orchid (OXT) Coins Are in Circulation?

1 billion OXT were created at launch, representing the maximum number of tokens that will ever exist. Orchid currently has a circulating supply of OXT with a market cap of EUR.

Although the supply will never increase, contractual penalty mechanisms that burn OXT mean that the supply could decrease in the future, making the token slightly deflationary.

Other Technical Data

In December 2019, Orchid Labs, Inc. held 400,579,272 OXT in its treasury, with a policy that no more than 10 million tokens would be released from the treasury each month.

Orchid was designed to tackle several core challenges, including traffic analysis, sybil attacks, and the random selection problem. The OXT smart contract has been audited by two external third parties, namely Consensys and Certora.

How To Use Orchid

Anyone can use Orchid with an account. They can get access to an account by someone else sharing one with them, by buying an account on iOS, or by creating an account with OXT. To create an account with OXT, the user first needs to create a new Ethereum wallet. They can then load the Orchid decentralized application (Dapp) in their wallet’s browser or preferred browser with a wallet plug-in enabled. The next step is to fund the wallet with OXT and some ETH for the network fees. Users will need to generate a signer address in the Dapp in order to create an account, and then they can download the Orchid app and connect their account to start using the VPN.

How To Choose an Orchid Wallet

As OXT is an ERC-20 token, it can be stored in any wallet that supports Ethereum and the type you choose will likely depend on what you want to use it for and how much you need to store.

Hardware wallets or cold wallets, like Ledger and Trezor, provide the most secure option with offline storage and backup. Hardware wallets can involve a bit more of a learning curve and are a more expensive option, however. As such, they may be better suited to storing larger amounts of OXT for more experienced users.

Software wallets provide another option and are free and easy to use. They are available to download as smartphone or desktop apps and can be custodial or non-custodial. With custodial wallets, the private keys are managed and backed up on your behalf by the service provider. Non-custodial wallets make use of secure elements on your device to store the private keys. While convenient, they are seen as less secure than hardware wallets and may be better suited to smaller amounts of OXT or more novice users.

Online wallets or web wallets are also free and easy to use while being accessible from multiple devices using a web browser. They are considered hot wallets and can be less secure than hardware or software alternatives, however. As you are likely trusting the platform to manage your OXT, you should select a reputable service with a track record in security and custody. As such, they are most suited for holding smaller amounts or for more experienced frequent traders.

Kriptomat offers a secure storage solution, allowing you to both store and trade your OXT without hassle. Storing your OXT with Kriptomat provides you with enterprise-grade security and user-friendly functionality.

Buying and selling OXT, or exchanging it for any other cryptocurrency, is done in mere moments when you choose our secure platform as your storage solution.

Orchid Staking

Users can become bandwidth providers by staking some OXT on nodes using the smart contract to create a stake deposit. Users are randomly connected with providers through Orchid’s staking directory based on the amount of tokens staked. Providers with larger stake deposits are thus connected to more users. Once a node is at max bandwidth capacity, any additional stake is effectively wasted.

Tokens can be used to provide bandwidth as soon as they have been locked into a stake deposit, and before a provider can withdraw their tokens, they must go through an “unlocking” process, which involves a three-month cooldown period.

The stake-weighting system employed by Orchid differs from traditional proof-of-stake models as users only earn revenue by providing bandwidth, and do not receive OXT simply for staking.

Growing an Orchid

Privacy and anonymity are becoming increasingly important to people in the digital age who want to browse the internet freely without being monitored or blocked. This was what the internet originally represented, and with the use of Web 3.0 technology, Orchid aims to deliver on that promise. As a VPN powered by the OXT cryptocurrency, Orchid manages to avoid the weaknesses of centralized services, while providing the economic incentives to improve the performance and quality of the current peer-to-peer systems.

Orchid provides a decentralized market for bandwidth providers and users and protects privacy through the use of advanced technology such as hops and probabilistic nanopayments. As tracking and censorship become ever more prevalent on the internet, Orchid and OXT could become increasingly valuable.

Orchid FAQ

What Are Orchid Hops?

A hop is a segment of a user’s web traffic routed through a VPN provider in the Orchid network. Users can configure multiple hops between different VPN providers. By shredding web traffic into multiple segments which no single party can see in full, users’ identities and browsing activities are hidden from third parties.

How Does the Orchid App Protect Privacy?

An Orchid single-hop circuit hides a user’s IP address and location from websites and prevents their internet service provider (ISP) from seeing what content they view and when. Users can browse the entire internet freely without being restricted by ISP-level firewalls. Users can also configure the advanced multi-hop feature to prevent the possibility of any single VPN provider being able to maintain logs on their activity.

In addition to hops, Orchid’s probabilistic nanopayments randomize the flow of payments to bandwidth providers, making it harder to link them with users’ real identities.

How To Buy Orchid

Buying OXT is as easy as visiting Kriptomat’s how to buy Orchid page and choosing your preferred method of payment.

How To Sell Orchid

If you already own Orchid and hold it in a Kriptomat exchange wallet, you can easily sell it by navigating the interface and choosing your desired payment option.

Orchid Price

Orchid price is influenced by a lot of the traditional factors such as project news and developments, market sentiment, the flow of cryptocurrency on exchanges, and the economy in general. It is also affected by the popularity of VPNs and the number of users on the Orchid network.

The current Orchid price is EUR.

The 24-hour trading volume of OXT is EUR. OXT is currently ranked of all cryptocurrencies by total market cap, with a market cap of EUR. It has a circulating supply of OXT.

Register now to begin your journey into the world of Orchid and cryptocurrencies with Kriptomat!

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