The archive · Developer & Business Tools · Product decision · 2017
Orchid bets Ethereum-paid relays can outdo Tor; 2017 HN launch drew 378 points
Decentralized VPN protocol by Cydia's Jay Freeman, GNU Bash's Brian Fox and Ethereum's Gustav Simonsson: users pay bandwidth sellers in tokens; seed near $5M.
Orchid
What the business is
Orchid is building an open-source, fully decentralized overlay network: users tunnel through other people's relays and exit nodes and pay them in Orchid tokens over Ethereum, a market pitched as a surveillance-free layer on top of the existing internet and a cheaper, more private alternative to centralized VPNs.
Starting capital：Nearly $5M in seed, reported by commenters in the 2017-10-28 HN launch thread; structured as one of the first SAFT sales to Silicon Valley VCs for rights to future Orchid tokens.
How it started
Orchid came together around unusual open-source and crypto credibility: Jay Freeman (creator of Cydia), Brian J. Fox (first employee of the Free Software Foundation and author of GNU Bash), Gustav Simonsson (an Ethereum core developer), Dr. Steven Waterhouse (RPX co-founder who led cryptocurrency projects at Fortress and Pantera Capital) and Stephen Bell (who spent 10 years backing Chinese seed-stage startups at Trilogy VC China); David Salamon was lead author of the whitepaper. Their pitch, quoted from the site FAQ inside the launch thread, was an open-source overlay on the existing internet where bandwidth consumers pay contributors in Orchid tokens and neither traffic nor payments can be watched by a central authority. By October 2017 the startup had seed money that commenters in the thread put near $5M, raised through one of the first SAFT sales to Silicon Valley VCs, and a roughly 50-page draft whitepaper out for peer review.
What happened
The whitepaper debut on Hacker News on 2017-10-28 (378 points, 188 comments) became a day-long AMA. Team members defended a deliberately anti-ICO stance: no token sale until a fully working network existed, all code to be released under AGPL3 with the patent licensed Mozilla-style, and no business model by design, since investors had bought rights to future utility tokens whose value would depend on network use. Commenters split: skeptics called a funded, pre-code protocol vaporware or a cash grab, while supporters argued the token incentive answered Tor's chronic shortage of donated relays. The team conceded open design problems, including payment anonymity, bootstrap and traffic correlation, and promised code and a public repo soon.
No ending yet — it is still running.
Background
Orchid is a startup built around open-source and crypto veterans: Cydia creator Jay Freeman, GNU Bash author and FSF first employee Brian J. Fox, Ethereum core developer Gustav Simonsson, RPX co-founder and former Fortress/Pantera crypto lead Steven Waterhouse, and China seed-stage investor Stephen Bell, with David Salamon leading the whitepaper. Its pitch was a surveillance-free layer on top of the existing internet: an open-source overlay in which people tunnel through other users' relays and pay them in Orchid tokens.
The founding bet was structural. Instead of Tor's donated relays or a VPN company that logs metadata, Orchid proposed a fully decentralized Ethereum market where source nodes pay relay and exit nodes per packet, using probabilistic lottery payments to keep blockchain transaction costs near zero. Node operators could whitelist what they carried, and the team said it would hold no token sale until a working network existed; investors bought rights to future utility tokens through one of the first SAFTs sold to Silicon Valley VCs.
The draft whitepaper hit the Hacker News front page on 2017-10-28 with 378 points and 188 comments, and the thread became an all-day AMA. The founders answered that the network would have no Tor-style central directories, that all code would be AGPL3, and that the company had no business model by design; skeptics answered that a funded protocol with no public code was vaporware. As of that date Orchid was still building: lead implementer Jay Freeman said he could not yet start a relay node, with code, the token sale and the network itself all still to come.
What has to be true
- Tor relies on donated relays, so supply is scarce and ordinary users are shamed for heavy browsing; Orchid made node operation paid work instead of charity.
- Centralized VPNs are a large paid market, but their operators can log traffic and be compelled to hand it over; a decentralized market has no middleman to subpoena.
- Probabilistic lottery tickets shrink blockchain transaction overhead, making per-packet payments over Ethereum theoretically economic.
- AGPL3 code plus a Mozilla-style patent license was the founders' answer to the fear that VC money would let the network be forked into something closed.
What can be applied
Privacy networks starve on supply: Orchid's bet was that paying relay operators in tokens, and letting them filter what they carry, recruits the bandwidth Tor's volunteers never could.
Aftermath
As of the 2017-10-28 thread, Orchid was pre-product by its own account: the whitepaper was a draft, no repository or code was public, and lead implementer Jay Freeman said he could not yet start a relay node on the network. The stated sequence was to finish the software, release it under AGPL3 and only then sell Orchid tokens to bandwidth customers rather than ICO investors. The public discussion left the open design questions, payment anonymity, bootstrap in censored networks, traffic-correlation resistance and whether a VC- and SAFT-funded protocol could stay decentralized, unanswered.
Sources
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