Binance Labs is the research arm of the largest crypto exchange in the world, Binance. The research department focuses on finding new ways to improve crypto-related services for the masses. In an effort to do so, they have also participated in the development of HOPR, an alternative to TOR.
TOR has been the go-to tool for most people when it comes to data protection and privacy when dealing online. HOPR is designed to provide the same level of privacy, if not more, but with a much bigger focus on cryptocurrency trading.
The announcement from Binance Labs came on Thursday when they invested $1 million as seed money in the ongoing round. At the moment, HOPR has also received funding from other major names like Spark Digital Capital, Focus Labs, Synaitken, and Caballeros Capital. However, this is not the first support that HOPR has seen from people at Binance. There is a developer support platform at Binance as well which is called BinanceX. They also granted HOPR developers a fellowship award which was also a huge boost for the HOPR team.
The idea that HOPR carries is to create a mixnet solution that will take privacy to the next level. The concept of mixnet solutions is not old and has been in development through several projects over the years. However, no one had really done it right, until now it seems. The HOPR solution aims to incentivize their network using a token which can be used in different ways.
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The Strategy Officer at Binance, Gin Chao said, “The team from BinanceX met HOPR over a year ago at Paris Blockchain Week, and we have got to know the team.”
He also said that the value of data privacy has been equally proven in both the traditional trading markets and crypto as well. In addressing those privacy concerns, Binance feels that HOPR has all the right credentials to be a platform worth supporting. HOPR also has a token sale coming up and they will also be registering in Switzerland as a decentralized autonomous organization (DAO), providing them proper legal status.
Chao also said, “I think it’s the right type of problem to be solving at this time and HOPR’s solution is a great fit in terms of the ethos of blockchain and having an eventual decentralized organization with a token to address the problem.”
According to Sebastian Bürgel, HOPR is not a tool that is only usable for making blockchain transactions. It is in fact a general usage network, very much like TOR that will also have its own version of the onion router / virtual private network (VPN). Bürgel is the co-founder of HOPR.
Bürgel said that a typical network requires two parties communicating to do so via Internet Service Providers (ISPs) or telcos who are privy to any data that flows through their network. This can create a big security loophole for people trying to maintain privacy.
In the case of HOPR, the data does not transmit directly from the sender to the receiver. Instead, the data “hops” around the HOPR network from one relay to another, creating an indirect route. Along that route, other data is mixed constantly with the original information. This makes it very difficult for any third party to snoop in and try to intercept the information.
The idea behind HOPR is to create an incentive-based network where people can join and provide their systems as relays for hopping the data. In exchange for that service, they would then get paid as well. No one really knows how much you can expect to get paid for providing this service. Being a decentralized network means there is virtually no control over these aspects and there are several other factors affecting it as well which are not controllable.
The mode of payment will be HOPR tokens. Bürgel said, “Anybody can participate and be paid for the service of relaying traffic and thereby creating privacy for you.” As a comparison, he also said, “You are paid in HOPR tokens similar to how miners get paid ETH on Ethereum.”
To give a reference for the payment that one can expect, Bürgel compared it to how people pay for monthly subscriptions of VPN. He said, “We imagine this is going to be a kind of marketplace. I think it should be something that is comparable to a VPN subscription, which is an order of like $10 a month, so for some reasonable usage it should be in that range.”
However, the comparisons end there between HOPR and VPNs according to Bürgel. He said that VPNs are notorious for having leaked private user data on so many occasions. Many VPNs have also been known to sell their user data to gain monetary benefits.
As for HOPR, Bürgel said that “HOPR packets all look the same. There’s a lot of cryptography under the hood, but basically, HOPR packets are indistinguishable from one another and we are also mixing packets, so that brings significantly more privacy than Tor could offer.”