Project Review — NUCYHER (NU)
Overview
NuCypher Protocol provides a cryptographic infrastructure for privacy-preserving applications. It provides encryption and cryptographic access controls, performed by a decentralized network, leveraging proxy re-encryption. It enables private data sharing between arbitrary numbers of participants in public consensus networks, using proxy re-encryption to delegate decryption rights in a way that cannot be achieved by traditional symmetric or public-key encryption schemes. Native tokens are used to incentivize network participants to perform key management and access delegation/revocation operations.
Pros:
· Strong team and project have some of the best features with the latest innovation
· Staking program is engaging and Tokenomics is attractive for Stakers and Nodes
· Community is active and supportive
· Backing from Y Combinator, PolyChain Capital and XRP Capital
Cons:
· Product is too complex for users better marketing and AMA session required
· Need strong partnership with traditional players
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Market Analysis
In 2017, Key Management Services market was estimated to be around USD 300 million and was expected to grow at a CAGR of 28.4% for the next 5–6 years. However, considering the development of the blockchain industry, the rise of decentralized networks and keeping perspective of an increase in dApps the future looks more promised than the mentioned numbers.
Company
NuCypher started in 2015 under the legal name of ZeroDB.Inc in San Francisco, CA. NuCypher's primary aim is to provide data security and encryption platform for distributed networks.
Problem Statement
It goes unsaid that blockchain and cryptocurrency have changed the entire paradigm of information technology and the future perspective looks even brighter. Blockchain technology has provided, transparency, efficiency, security and, most important, decentralization. However, as this technology has evolved in the last decade so has the technology to hack the blockchain. Last year alone nearly 500,000 pieces of customer data has been stolen. Data security and privacy as such are still a major concern.
· The limitations of public consensus networks in performing cryptographic operations that involve the manipulation of secret data are well-established
· Consensus networks employ a volunteer network of nodes, which is subject to constant churn and not as reliable as central infrastructure when it comes to availability and enforcing access management rules.
NuCypher mission is to provide data security and privacy to dApps using its cutting-edge PRE technology and decentralized KMS. It helps the application securely store, transfer and use data using its encryption platform as a service. It uses a decentralized network to remove the reliance on central service providers, proxy re- 5 encryption for cryptographic access control, and a token incentive mechanism to ensure reliability, availability, and correctness.
Product Offering
NuCypher offers three features for data encryption to dApps developers.
· Secret Management
· Dynamic Access Control
· Secure Computation
Secret Management: NuCypher provides infrastructure management services that allow users to manage infrastructure secrets across dynamic environments. Users can store encrypted secrets on any storage backend and can also use the access provision feature which conditionally grants and/ or revokes access.
Dynamic Access Control: NuCypher provides the feature for dynamic access grants to user’s data across the consensus network. The dynamic access control can be used based on a specific condition such as time-based, behavior-based, etc. It can also revoke access based on demand or automatically under customizable, pre-specified conditions. Most importantly, for retail users, it can perform share encrypted data with multiple recipients, even from low-powered devices.
Secure Computation: NuCypher allows developers to perform operations on encrypted data while preserving the confidentiality of the inputs and results. The secure cloud computing service allows developers to perform operations on encrypted data in untrusted environments without revealing any information to the cloud provider. At the same time, its proprietary analysis algorithm offers fully end-to-end encrypted processing services without exposing analytics models. Secure computation also provides safe collaboration on sensitive data across organizations without exposing each individual organization’s private data.
NuCypher core technology consists of three pillars
Umbral PRE: Umbral is NuCypher’s threshold Proxy Re-Encryption (PRE) scheme. PRE is a type of encryption technology that has benefits of both: Symmetric encryption and Public Key encryption. It allows a proxy entity to transform or re-encrypt data from one public key to another, without having access to the underlying plaintext or private keys.
Working: Alice (the data owner) can delegate decryption rights to Bob (the recipient) for any ciphertext intended for her, through a re-encryption process performed by a set of trusted-minimized proxies. When a threshold of these proxies participate by performing re-encryption, Bob is able to combine these independent re-encryptions and decrypt the original message using his private key
NuFHE: NuCypher FHE is GPU-accelerated fully homomorphic encryption. It is a proof-of-concept FHE library based on TFHE with GPU acceleration using CUDA and OpenCL. It can use either Fast-Fourier Transforms (FFT) or purely integer Number Theoretic Transforms (NTT) to speed up encrypted computations.
Fully Homomorphic Encryption (FHE) is a form of encryption that allows arbitrary, secure computation on encrypted data (meaning encrypted data can be processed without needing to decrypt it first). Operations on the encrypted data are applied as if being performed on the plaintext data
NuFHE is currently the fastest available fully homomorphic encryption library in the world.
Penumbral NuBLS: NuBLS is a BLS signature library that implements threshold protocols like threshold signatures (TSS) and a Proxy Re-Signature (PRS) algorithm designed by NuCypher called Penumbral (paper in-progress)
Tokenomics & Staking Program
NuCypher (NU) Token is ERC-20 compatible “work token” and is the core of the decentralized threshold cryptography network of NuCypher. The purposes of NU token are:
· Splitting trust between re-encryption nodes (more tokens = more trust and more work)
· Mean of incentives and payments for node deployment policies
· Bonded as a security deposit to be at stake against malicious behavior of nodes
A total of 1 billion NU tokens were released during Genesis i.e. initial supply. The total supply of NU token has been capped at ~3.89 billion of which the differential ~2.89 billion is the inflation subsidy for Stakers.
The Genesis block unlock schedule will be different for different stakeholders
After the launch of Mainnet, NU Token Stakers will be able to earn fees paid by network users, an inflation subsidy that will be released in two phases. The two-phase subsidy model of NU tokens consists of
· First phase — ~366m tokens being released every year for the first five years from the start date of Mainnet launch
· Second phase — Tokens are minted based on exponential decay with a minimum half-life of 2 years. This phase will commence as soon as the circulation supply reaches 2,829,579,800 tokens.
The overall distribution of NU token as part of maximum supply will look like the below chart.
Use Cases
NuCypher network is decentralized service marketplace who provides the infrastructure for all sorts of application that has ‘data sharing’ as their core feature. NuCypher provides the below-mentioned functionality to applications
· Local encryption libraries and daemon
· Sharing short secrets
· Sharing files and hierarchal data
· Encrypting bulk data
· Sharing encrypted streams
· Time based and condition-based policies
· Key rotation
A detailed report regarding the above services can be found in the NuCypher technical whitepaper. Few use cases of the NuCypher network are
· Sharing of encrypted file — decentralized version of Dropbox — User can easily encrypt the file and store them on decentralized data storage network such as Filecoin, Sia and/or Storj. The file can be then accessed by one or more approved parties. These approvals can be programmed to be made time-based, situation-based and can be revoked similarly.
· End-to-end encryption group chats — NuCypher can provide end-to-end encryption to group chat applications. In this, users can be allowed/revoked access to the chats. This will remove the need for multiple encryptions for every user individually.
· Patient-controlled electronic health record (her) — An online health record system controlled by the patient where the patient can grant access to the hospital and/insurance company based on situation and/or timeline.
· Digitalized Digital Right Management (DDRM) — NuCypher cryptographic access control can be used to manage digital rights. Access controls can be embedded in the encryption such that it follows the data wherever it goes. This can be used from online arts, e-books, online content such as music, videos, etc. It can also be used to fight piracy of digital content
Above mentioned uses cases are few from many that are supported by NuCypher cutting edge end-to-end encryption technology.
Roadmap
Although NuCypher has never published any roadmap for its project, it has always updated its community about all the achieved milestones from time to time in community letters. The best part about the NuCypher Dev team is their dedication to building perfect privacy-preserving and censorship-resistant services. There have been lots of testing of all the product features, multiple security audits or its core offerings and trails of its Testnet before making it public. The broader overview of its developments are mentioned below:
Competitor Analysis
NuCypher is the pioneer in the field of decentralized key management systems. Its main competitors are traditional centralized players such as Azure Vault, AWS Key Management Service, HashiCrop, Egnyte, etc.
Strategic Partners
NuCypher has secured a number of strategic partners not just in the blockchain industry but also in the traditional industry. Key industries in which NuCypher has secured partnerships are
· Healthcare
· Key Management
· IoT
· Decentralized Storage
· User Data Monetization
· Location Data
Among these sectors, partnership in healthcare has been overwhelming with partners from centralized as well decentralized space showing interest in working with NuCypher.
Strategic Investors
NuCypher has backing from some of the most reputed investors from the crypto space.
Team & Advisors
As per their website, NuCypher Network has a team of 12 people and three advisors including its co-founder Michael Egorov.
· MacLane Wilkison, Co-founder and CEO — MacLane has worked as Investment banking Analyst at Morgan Stanley for two years before starting NuCypher.
· Michael Egorov, Co-founder and Advisor — Michael has worked as Senior Software Engineer for LinkedIn before joining NuCypher. Currently, he is CEO at Curve Finance.
· Bogdan Opanchuk, Engineer — Bogdan has done his Ph.D. in Quantum Mechanics and Computer Simulation from the Swinburne University of Technology and is working on Fully Hydromorphic Encryption (FHE) scheme of NuCypher Project.
· Damon Ciarelli, Engineer — Damon has been strong background in developing web applications. He has worked with Psyop and Reelio. He ha launched some cool websites in his own time while working with NuCypher
· David Nuñez, Cryptographer — David has done his Ph.D. in cryptography from NICS Lab, Universidad de Malaga and has worked as a researcher there for more than seven years before joining NuCypher Network
· John Pacific, Engineer — John has worked with XMission and Teem as a software engineer. He has also worked with Loki Network as director and Advisor before joining NuCypher as a cryptography engineer
· Justin Myles Homes, Cryptological Scientist
· Kieran Prasch, Engineer — Kieran has a strong history of working with multiple projects throughout his career. He has worked as a software engineer at Carbon, Sono Solutions and Almost Famous. He has also worked as a Lead Instructor at PDX Code Guild before joining NuCypher
· Ravital Solomon, Cryptographer — Ravital has done her master’s in Mathematics and Theoretical Computer Science from the University of Oxford. She worked as a Mathematics instructor for a couple of years before joining NuCypher.
· Arjun Hassard, Product — Arjun is co-founder of TalenRank and has worked as Head of Product for SyndicateRoom and Factmata before joining NuCypher
· Ryan Caruso, Community — Ryan co-founded Hello Cannabis before joining NuCypher
· Derek Pierre, Biz Development — Derek has worked as Software Developer for IBM Cloud Computing solution, Research In Motion and Dell before joining NuCypher
Besides Michael Egorov, Prof. Dave Evans and Professor Giuseppe Ateniese are the other two advisors on board with NuCypher.
Community Engagement and Social Media Presence
It would be exaggeration to say that the NuCypher team been on top when it comes to community engagement and social media. NuCypher has its own blog https://blog.nucypher.com/ where the team has been updating the community about all its developments. There are more than 50 articles all related to project updates and 14 newsletters regarding community updates. However, the last community update was more than a year ago.
Conclusion
NuCypher has a strong product offering and a positive future outlook. With the increase in blockchain adoption by traditional platforms, NuCypher is bound to gather momentum. Overall, NuCypher has a 4/5 buying rating in the short-term and well-as long term. In nutshell reasons behind our rating is :
· Innovative technology that takes data encryption to next level
· Unlocking opportunities from the traditional market at both enterprise and retail level
· Solid team and
· Staking program and two-phase subsidy model for node incentives take care of price discovery in the long term which minimized pump and dump scams
· Strong community interaction on all social platform which is the forerunner in blockchain and crypto community
Acknowledgment
1. NuCypher whitepaper published on https://github.com/nucypher/whitepaper/blob/master/whitepaper.pdf
2. Crunchbase https://www.crunchbase.com/organization/nucypher
3. https://www.nucypher.com/secrets-management
4. https://www.nucypher.com/secure-computation
5. https://www.nucypher.com/proxy-re-encryption
6. https://www.nucypher.com/fully-homomorphic-encryption
NuCypher website https://www.nucypher.com/
