DeNet, a startup co-founded by a 19-year-old programmer and senior industry professionals, aims nothing short of disrupting the way web hosting works today.
“We are bringing it back to the original idea of decentralization,” says Denis Shelestov, the company’s young CTO.
DeNet believes the way the Internet operates these days is a vast digression from its original concept; and that decentralization should start with one of the most centralized areas, web hosting.
Operating from Moscow, Kazan, Minsk and Hong Kong, the company plans to provide and lease IT capacities for hosting, storing and processing of data all over the world, enabling every Internet user to rent private and secure web-hosting.
“The biggest difference between centralized and decentralized networks is in the way they store and process information. In a decentralized system, data fragments are encrypted and distributed along the nodes (devices from around the world which will be lend out by other users) – therefore there is no central center for information processing like in centralized networks, meaning that there it is not possible to gain access to the personal information of others”, says Rafik Singatullin, DeNet co-founder and CEO.
As a large proportion of computing power and bandwidth remains unused, DeNet’s rationale is that it could be rented out in exchange for a fee; and the company sees its mission as helping users to do that with minimal difficulties.
“The idea of peer-2-peer communication is far from new, but with new tools like cryptocurrencies and blockchain it got a new life,” says Pavel Litvyakov, DeNet Co-founder/CBDO.
“Brainstorming on where we can implement p2p, we decided to build a network of devices, assemble this power using advanced algorithms, and use it as decentralized services. Thus, people will have the opportunity to earn money for renting out computing power and bandwidth, while users will be given a choice,” explains Rafik Singatullin.
The targeted market is considerable. A Market Research Future study cited by DeNet has estimated the volume of the global web hosting market at some $154 billion by 2022 with a 16% annual growth rate.
According to Litvyakov, possible applications for the DeNet platform stretch beyond web hosting: users may also execute any other tasks that need huge computing power, such as machine learning or training of neural networks.
From school to CTO
It was not Litvyakov, however, who came up with the idea for DeNet, but Shelestov.
“I created my first web site at the age of seven, mastered coding in PHP, Python and C++ at 14 and raised investment for a personal project,” says the CTO.
He added that, from the age of 10, he had been observing repeated hackings and intrusions in data bases, and analyzing vulnerabilities in hosting, web sites and assemblers.
According to him, centralization of the web has led to a situation when online information is no longer private.
“I would like for every individual to restore their right to Internet privacy which has been the 21st century,” he says.
Singatullin first met the teenager last year at an IT event for high school students in Shelestov’s native city of Kazan, Russia, where he was giving lessons.
The entrepreneur was impressed; and when later Shelestov told him about the decentralized hosting concept, he seized the idea.
Litvyakov and Singatullin, who had both long track records in non-tech businesses, jumped into the project head-on, quitting their previous jobs and putting aside their family lives in order to launch DeNet.
The benefits of blockchain technology
To execute the decentralized hosting idea, DeNet chose to use the blockchain technology and to issue tokens.
“We use blockchain in two aspects,” explains Singatullin. “First of all, we need complete transparency as there is no central node that would control the entire platform. We know that there are other ways to do it, but with blockchain, it works in a perfect way.”
The DeNet tokens will be used as a universal currency for all network users, regardless of their location, for various types of micropayments while using the platform.
On the road to token sale
The initial investment in the project was a mere $10,000, which the founders took out of their own pockets. That amount allowed the startup to set up offices and hire personnel in May 2017.
Another investment round with an undisclosed amount enabled the startup to accelerate R&D and support its first branding and marketing campaigns.
Andrei Kulik, a Google manager, and Andrei Bogomolov, a resident of Minsk Technopark and representative for MIT Lab Italy, were the first advisors joining the project. Several other advisors and mentors followed, bringing additional technical expertise to the project.
DeNet launched its minimum viable product (MVP), a network for decentralized web hosting and file storage, in late October 2017, after months of work.
“I must admit it was the best and hardest summer in my life so far,” Litvyakov says. “Every single day I learned more than in entire previous months, and my contact list increased to include more than 100 new people monthly. I had a feeling that the day is much more than just 24 hours.”
Currently, the alpha version of the system is already operable, showing how decentralized hosting works – yet on an infrastructure made up by servers owned by the company.
The next portion of funding is coming from a private pre-sale of DeNet tokens, taking place in January and February 2018, which will be followed by a public sale.
But “unlike 99% of all startups launching a token sale or an ICOs, which have no product to show their investors, we already have an alpha version,” Singatullin says confidently.
The soft cap target (minimum funding) is set at $6 million – not far from the average amount raised through token sales in the region and globally.
- This is a sponsored article, which means it was written by the EWDN team in an independent spirit but financially supported by the company. Read this and many more other stories in EWDN’s research study on “Startup Innvation and Investment in Emerging Europe” (download link).
