What is NuCypher (NU)?
NuCypher (NU) is a cryptographic services provider, decentralized Key Management System (KMS), and cryptocurrency. The platform is designed to enable developers to securely store private data of public blockchains. It accomplishes this task via the introduction of an interoperable security layer that allows users to keep data private and share information securely.
From its launch in 2015, NuCypher focused on industries that maintain large amounts of sensitive data like finance and healthcare. This approach helped the platform carve out a valuable niche market. Notably, the project was a member of Y Combinator’s Summer class of 2016. However, it wasn’t until 2017, that the network turned its eyes on providing its services to decentralized networks.
History of NuCypher (NU)
NuCypher (NU) entered the market in 2015 as an affordable way to securely send data to and from the cloud. The platform was co-founded by MacLane Wilkison and Michael Egorov. Prior to starting NuCypher, Wilkison served as an investment banking analyst for Morgan Stanley. Egorov served as a senior software engineer prior to starting the project. Together, their experience helped to shape NuCypher into a valuable service provider.
Notably, NuCypher received a boost in notoriety early on after the network secured $750,000 in seed funding to expand its features. It wasn’t until 2017, that NuCypher shifted its focus to providing services to the blockchain market. This was a break-out year for the crypto market with the launch of new platforms occurring monthly. This growth caught the attention of NuCypher. This shift in focus was accompanied by the development of a new decentralized token-based model. Interestingly, the developers chose not to host a public token sale. Instead, they opted for a SAFT. The firm raised $4.4 million in December 2017 via a SAFT to further the project. In October 2019, the public testnet went live.
What Problems Does NuCypher (NU) Attempt to Fix?
NuCypher (NU) addresses multiple problems faced in the blockchain community. This structure helps to eliminate the damage down by data breaches. Data breaches are on the rise. A recent report highlighted this trend. The study found that there were 3,950 confirmed data breaches in 2020.
These breaches ranged from Microsoft being hacked leaving a database holding over 280 million customer records open to the public, all the way to the California Department of Motor Vehicles (DMV) falling victim to a ransomware attack. In total, millions of people’s private information were lost.
Data Breaches on the Rise
Sadly, the data breach wars are just getting started, the same report found that on average, a business will fall victim to a ransomware attack every 11 seconds this year. By 2025, these losses are predicted to top $10.5 trillion in value. The report also noticed some trends. Such as the fact that hackers have expanded their focus to include vulnerabilities inherent in touch ID sensors, facial recognition systems, and passcodes. NuCypher seeks to eliminate privacy leaks due to public inputs or outputs.
Developer Privacy Concerns
One issue that has plagued Dapp developers for years is how to securely store private data on the blockchain without sacrificing responsiveness. NuCypher (NU) addresses the limitations of using consensus networks to securely store and manipulate private, encrypted data leveraging Proxy Re-encryption (PRE). The protocol integrates an advanced cryptographic Infrastructure that was built from the ground up to service Privacy-Preserving Applications to increase security during these processes. The system enables developers to implement a dynamic access control mechanism to conditionally grant and revoke access to sensitive data based on user criteria.
Benefits of NuCypher (NU)
There are a lot of benefits users gain when they participate in the NuCypher (NU) ecosystem. NuCypher allows users to move information and computation to the cloud securely. Network nodes, which handle the encryption and decryption of this data never possess the encryption keys, so the data remains only visible to the approved parties. This system is called Proxy Re-Encryption (PRE). Its primary purpose is to protect users from data breaches.
For developers, there is an excellent selection of features that can help expand their Dapp functionality and security. Developers can store, share, and manage private data more efficiently. They can grant permission to sensitive information and manage private data. Specifically, the protocol simplifies the implementation and management of IAM tokens, database and SSH credentials, and the signing of encryption keys across dynamic environments.
Ethereum-based
NuCypher (NU) lives on the Ethereum blockchain. Ethereum is currently the most popular Dapp and DeFi blockchain in the world. The network is very secure and provides users with high interoperability within the market. NuCypher users can also store and trade their tokens within the vast Ethereum ecosystem. This interoperability helps streamline use and onboarding.
How Does NuCypher (NU) Work?
NuCypher offers two main services to its clients – Secrets Management and Dynamic Access Control. The Secrets Management protocol is the system that handles the storing of sensitive data like passwords and private keys. The Dynamic Access Control system is what grants and revokes access to sensitive data after meeting the required criteria.
NuCypher (NU) Consensus
NuCypher (NU) relies on Ethereum’s blockchain to remain valid. Ethereum is a Proof-of-Work (PoW) network. Like Bitcoin, network nodes, called miners, compete to add the next block of transactions to the chain. The node that successfully adds the next block receives a reward for its efforts. PoW networks are the most secure style of blockchain. However, they lack scalability.
Ehterum is in the middle of a major upgrade that would convert the network’s consensus mechanism over to a Proof-of-Stake (PoS) system. This upgrade will improve the network’s responsiveness, transaction throughput, and introduce more earning opportunities for users and Dapps such as NuCypher. Additionally, PoS networks require much less energy to secure. They provide a more sustainable alternative. Consequently, there has been an explosion in the number of PoS blockchains in the market.
NuCypher (NU) Community Governance
NuCypher (NU) relies on community governance to guide its development. Users who stake NU gain voting powers in the system. Anyone who stakes NU can put forth network proposals to better the community. These proposals are then put before the rest of the community. If a proposal is voted in, the network will begin implementation and release the funds from the community address.
Final Word
The concept behind NuCypher (NU) is solid. The demand for both access to affordable cloud services and data protection mechanisms is at all-time highs. The expansion of the decentralized economy and the rise in data breaches has driven demand for NuCypher’s services further in the market. You can expect to see continued demand for high-end decentralized encryption protocols moving forwards. As such, NuCypher is well-positioned to service the market.
