NuCypher is a solution that will be of particular interest to those building decentralized application that deals with private or sensitive data as it will enable a privacy layer for public blockchain and decentralized applications through a technology called proxy re-encryption. NuCypher is an infrastructure stack for decentralized applications and enables developers to store, share, and manage private data on public blockchains.
The company completed a $4.3 million presale from select cryptofunds and venture firms in the token space. The round was led by Polychain Capital with participation from Michael Novogratz’s Galaxy Digital Assets Fund, FBG Capital, Compound VC, Satoshi Fund, Semantic Ventures, Kenetic Capital, Coinfund, Nima Capital, Amino Capital, Blockchain Korea Partners, 1KX, and Mission & Market. A public token sale/ICO is scheduled for early 2018.
The process of proxy re-encryption is a type of public-key encryption that allows a proxy entity to transform ciphertexts from one public key to another, without learning anything about the underlying message. It’s a method for person A to share encrypted data with person B, without sharing a private key or having to decrypt the data first.
By using proxy re-encryption, NuCypher will create flexible cryptographic access control infrastructure for blockchain and decentralized applications. Proxy re-encryption is described as a more scalable form of public-key encryption, which would suit distributed, data sharing scenarios in which encrypted data must be shared and consumed by many recipients. It could solves the performance and latency drawbacks of existing approaches. It is also likely to have benefits for big data, cloud, and Internet of Things.
One company using the solution is MediBloc, which is creating a patient-controlled medical records system and using NuCypher to encrypt medical records and share them with valid recipients like doctors, hospital, and medical providers. Datum is using NuCypher to create a user data exchange/marketplace, where regular people can auction their personal data off to advertisers. Another company using NuCypher is Wolk, which is using it to create an end-to-end encrypted database on top of Swarm.
Miners in the NuCypher network must stake the NuCypher token as collateral. This provides an economic incentive to ensure correctness of computation – if a node misbehaves or goes offline, it can be challenged and forfeit it stake. On the other hand, if a node behaves correctly it can earn fees and block rewards in proportion to its stake.
Developers using NuCypher as part of their dApp’s tech stack don’t need to interact with token directly. Instead, it is possible to use its software library and communicate with the NuCypher network via an API. Applications or users will need to pay fees to consume the network’s re-encryption services, which can be paid using NuCypher’s native token.