NuCypher

​Nucypher​ is an online currency platform that offers decentralized proxy re-encryption as a service. The company was founded in 2015 by MacLane Wilkison and Michael Egorov, and is headquartered in San Francisco, California. It leverages the advantages of proxy re-encryption to deliver private data to public blockchains. It also enterprise solution that enables businesses to leverage the power of distributed computing.

NuCypher is a decentralized encryption, access control and key management system (KMS), encryption service for public blockchains. NuCypher offers end-to-end encrypted data sharing on public blockchains and decentralized storage solutions.

NuCypher allows users to share private data between a number of participants in public consensus networks, using proxy re-encryption (PRE) technology. This decryption technology makes NuCypher much more secure and protected than traditional blockchain projects based on public-key encryption, according to NuCypher.

NuCypher (NU) are the native tokens used on the larger NuCypher network. The tokens are used to incentivize network participants for performing key management services and accessing delegation/revocation operations on the network.

The NU tokens are also used for staking to run a NuCypher worker node. The NuCypher network is protected against malicious staking, and would automatically slash a suspected user’s rewards.

NU is also used on the network for participating in the NuCypher DAO. The NuCypher DAO is the protocol that controls network parameters and smart contract upgrades on the network. Users who stake NU can also participate in validating DAO proposals.

Who Are the Founders of NuCypher?

NuCypher was co-founded by Mikhail Egorov (the founder of Curve) and MacLane Wilkison. The white paper for NuCypher was first published in June 2017, but the testnet did not launch until November 2018.

Egorov formerly served as the CTO of NuCypher. He is a security researcher, physicist and scientist from the Moscow Institute of Physics and Technology.

Co-founder MacLane is a software engineer and the CEO of NuCypher. Prior to his involvement in blockchain, he worked as an investment banker at Morgan Stanley, where he provided financial services to enterprises in technology, media and telecommunications.

Both Egorov and MacLane participated in the U.S. startup accelerator Y Combinator in the summer of 2016. The following year, the whitepaper for the NuCypher project was published.

NuCypher launched its private testnet in 2018. The private treatment launch saw participation from major staking infrastructure providers including Bison Trails, Figment, InfStones and Staked.us.

The public testnet of NuCypher began in October 2019. However, the incentivized public testnet began in January 2020. The mainnet of NuCypher launched in October 2020 after distributing $45 million in NU tokens to nodes.

What Makes NuCypher Unique?

Unlike most blockchain projects that are designed to serve customers, better transactions, IoT operations, voting mechanism, and the like, NuCypher was created for other blockchains. NuCypher is a privacy layer for blockchains.

NuCypher provides a privacy infrastructure for the decentralized web with proxy re-encryption (PRE), threshold signatures (TSS), distributed key generation (DKG), and other threshold cryptography.

Using the NuCypher network, users can conditionally grant and revoke access to data with multiple users at a time. NuCypher's encryption service provides almost unparalleled security for sensitive data transfer. It combines this with the trustless and censorship-resistant nature of conventional public blockchains.

The cryptographic libraries of NuCypher include;

pyUmbral, the reference implementation of the Umbral threshold proxy re-encryption scheme;

NuBLS, a threshold BLS signature library, and

rust-umbral, a Rust implementation of Umbral with bindings to JavaScript and Python.

How Many NuCypher (NU) Tokens Are There in Circulation?

At NuCypher’s mainnet launch in October 2020, there was a total supply of 1 billion NU tokens. According to the release schedule, 3,335,938 and 4,460,000 NU tokens are released monthly to the SAFT Series 2 and Team/Equity investors every month.

The WorkLock, NuCypher’s novel network node setup mechanism, is expected to get 225,000,000 NU tokens in April 2021. Factoring in the monthly release of the NU tokens, 1,088,876,961 NU tokens have been issued with 392,750,000 currently in circulation.

The network has a max supply of ~3.89 billion NU tokens. The tokens are released monthly as rewards to stakers, according to the staking economics paper.

How Is the NuCypher Network Secured?

NuCypher is a layer 2 resource allocation protocol on Ethereum that uses a proof-of-stake (PoS) mechanism to coordinate worker nodes.

The network runs on a novel node distribution mechanism which NuCypher calls the WorkLock. To run a NuCypher node, a minimum of 2,000 node operators would need to stake 353,913.

The minimum lockup staking period is 30 days. However, NuCypher doesn’t guarantee that staking for longer than one year will provide greater benefits in terms of earning rewards. Unless the user opts out after a staking period, staking rewards are automatically restaked after each period.

ZeroDB is a company that participated in the YC S16 cohort of Y Combinator and raised an estimated $5,150,000.

NuCypher is a decentralized network in which data encryption keys will be encrypted, stored and transmitted.

Almost all popular sites on the Internet use SSL and TLS encryption certificates so that they are not broken with half a kick, as it was with sites in the nineties. Public blockchains do not have such protection, and NuCypher want to solve this problem with the help of encryption keys.

The mechanism for transmitting encrypted data in the NuCypher network can be compared with the transfer of bitcoin, only the wallet address itself will be encrypted. Here is a step-by-step example of transmitting encrypted data:

1. There is a data owner — Alice. Alice has two access keys: public and private. And she can also generate symmetric keys unique to her data, which encrypt and decrypt her data. The public key is needed to encrypt symmetric keys and request someone else's data. The private key is needed to decrypt symmetric keys and create re-encryption keys. Then a little clearer.
2. Alice encrypts her data with a symmetric key. The symmetric key is encrypted with a public key and attached to the data. The data is sent to the cloud.
3. There is a person who wants to get Alice's data — Bob. Bob also has two keys: public and private. To give access to the data, Alice creates a re-encryption key from her private and Bob's public key. The re-encryption key is divided into a random number of parts and sent to random miners.
4. Bob downloads encrypted data and Alice's encrypted symmetric key from the cloud. Next, he sends the downloaded symmetric key to the miners who received parts of the re-encryption key. They re-encrypt the symmetric key using re-encryption keys under Bob's private key.
5. Miners return a re-encrypted symmetric key to Bob. And he, using his private key, decrypts the symmetric one. And now, with this decrypted symmetric key, Bob decrypts Alice's data.

We took this example and simplified it from the review of NuCypher from the Coinremix website — there the concept of encryption and key transfer is illustrated in more detail and clearly. The whole process of key exchange is automated, but it depends on the implementation of the developers themselves in the applications.

NuCypher is developing Two cryptographic technologies:

1. PRE Umbral is a network of double proxy encryption, the mechanism of which is described above, in the example with Alice and Bob.
2. nuFHE is a library based on Completely Homomorphic Encryption with an acceleration of its performance by about 100 times. FHE is an encryption that allows complex calculations to be performed on encrypted data without decrypting it. And it's very slow. The NuCypher team, in addition to acceleration, is exploring the possibility of creating smart contracts based on FHE so that miners do not see the data that confirms.

We have not found any working projects on the Internet that would use PRE or FHE technologies. We found only scientific studies on them, of which a number of works from a member of the NuCypher team, David Nunez.

NuCypher does not make their own blockchain. Their network can be deployed on any blockchain. It is managed by smart contracts from Ethereum, and uses the Proof Of Stake mechanism to distribute rewards and prevent Sybil attacks. NuCypher (NU) tokens will motivate miners to re-encrypt keys, serve as a guarantee against errors and violations and a necessity for the start and operation of nodes.

The project team claims that at the beginning of the network's life, the requirements for miners' equipment will be minimal. A Raspberry Pi single-board computer, which costs about $35, may even be enough.