NuCypher is a decentralized key management system (KMS) and blockchain-based proxy re-encryption service. Powered by the NuCypher token (NU), the NuCypher KMS enables developers to secure information on the blockchain via the NuCypher network. This provides users with fully homomorphic encryption, access control, and other sophisticated forms of data encryption. Also, by staking the NU token, nodes can earn NuCypher staking rewards for securing the network. NuCypher is responsible for a great deal of innovation in delegated access control and encryption management systems, with the NuCypher KMS and NuCypher Hadoop making great strides in data management and security.
In this article, we’re going to dive deep into the NuCypher technology and explore the various data encryption protocols available. Also, we’ll discuss some of the most popular elements of NuCypher’s current services and how developers can take advantage of these. Furthermore, we’ll look at the roles and responsibilities of the NuCypher token (NU), NuCypher staking facilities, and the NuCypher decentralized autonomous organization (DAO).
For our readers who are new to blockchain technology, be sure to check out our Blockchain & Bitcoin 101 course. Then, why not try our Ethereum 101 course afterward to learn about smart contracts and decentralized applications (dApps)? Also, our DeFi 101 course is perfect for learning how to install and navigate MetaMask with different decentralized finance applications! Regardless of your current knowledge or experience, Ivan on Tech Academy has the right course for you to get started in blockchain!
NuCypher Background
Co-founded by MacLane Wilkison and Mikhail Egorov (founder of Curve Finance), the NuCypher whitepaper was published in June 2017. Both have participated in the popular startup accelerator Y Combinator and have extensive technical backgrounds in physics, computer science, telecommunications, and finance.
The private testnet for NuCypher was launched in 2018. With structural support from Bison Trails, Figment, InfStones, and Staked.us, the NuCypher public testnet went live in October 2019. Following this, the mainnet of NuCypher was launched in October 2020 following the distribution of $45 million worth of NU tokens to participating nodes.
What is NuCypher?
Powered by the NuCypher token (NU), NuCypher is a blockchain-based cryptographic infrastructure used for privacy-preserving applications, dynamic control access, secrets management, and secure computation. Also, NuCypher enables users to manage a range of computational secrets, such as identity and access management (IAM) tokens, and database and secure shell (SSH) credentials to access servers remotely.
Additionally, NuCypher allows users to conditionally grant and revoke access to data to any number of recipients. Furthermore, users can process encrypted data that maintains the confidentiality of transaction inputs and computational results. Moreover, the NuCypher Network provides an intuitive and accessible platform that provides extensible runtimes and interfaces with dynamic control of secrets management.
NuCypher Technology
NuCypher has developed a diverse range of advanced privacy-preserving technologies that are well-suited to various use cases across different applications. Below, we have discussed some of the key features and use cases of the NuCypher token and technology.
NuCypher Hadoop
NuCypher Hadoop equips security executives with unique capabilities to share and secure data in a decentralized “data lake”. Hadoop stands for “High Performance Access Management and Data Protection”. Moreover, the NuCypher Hadoop encryption management and delegated access control system is a highly scalable, enterprise-ready encryption solution that was purpose-built to enable secure data sharing for governance and residency requirements on a global scale.
Umbral Proxy Re-Encryption (PRE)
Umbral, NuCypher's Proxy re-encryption (PRE), is a form of proxy re-encryption that provides cryptographic access controls for distributed protocols and applications. As a form of public-key encryption (PKE), proxy-re-encryption enables a proxy entity to alter or re-encrypt data between public keys. Plus, this is achieved without the need to access any underlying plaintext or private keys. Below is an example of how NuCypher’s Umbral (PRE) technology works.
A data owner can delegate decryption rights to a recipient, providing that the ciphertext is intended for the data owner. This is managed through a re-encryption process carried out by a group of trust-minimized proxies. Upon reaching a threshold of proxy re-encryption participation, the recipient can combine multiple independent re-encryptions to decrypt the original message from the data owner using the designated private key.
Fully Homomorphic Encryption (FHE)
NuCypher's fully homomorphic encryption (NuFHE) library provides secure, private computation using outsourced nodes for encrypted data. Moreover, NuFHE is a GPU-accelerated proof-of-concept FHE library. The Blueprint for NuFHE is based on the TFHE library, with added GPU acceleration thanks to CUDA and OpenCL. Furthermore, NuFHE can utilize both Fast-Fourier Transforms (FFT) and purely integer Number Theoretic Transforms (NTT) to expedite encrypted computations. According to NuCypher, NuFHE is the fastest fully homomorphic encryption library available at present.
Fully Homomorphic Encryption (FHE) is a type of encryption that enables arbitrary, secure computation on encrypted data. This means that any encrypted data can easily be processed without the need to be decrypted beforehand. Moreover, operations carried out on encrypted data are applied as though they were being performed on the relevant plaintext data.
Secrets Management
The NuCypher secrets management function manages structural secrets among dynamic environments. This function allows users to store encrypted secrets on any backend. This includes S3, InterPlanetary File System (IPFS), and Swarm. Also, NuCypher secrets management enables users to conditionally revoke and grant access to these secrets. For example, this can be applied to time-based and behavior-based secrets through access provisioning.
If you’re interested in learning about how cryptographic encryption works on a deeper level, be sure to see our Cryptography and Privacy Coins course! Ivan on Tech Academy provides simple video-guided tutorials about many privacy protocols including Monero, Mimblewimble, and Incognito! For our readers already familiar with blockchain programming, check out the Ethereum Smart Contract Security course at Ivan on Tech Academy! Learn how to keep your code safe and reduce your chance of any exploitation. Plus, you can learn how to do the same on the Bitcoin blockchain with our Bitcoin Attacks course too. Join Ivan on Tech Academy today with a 14-day money-back guarantee!
Dynamic Access Control
NuCypher also offers dynamic access control that enables users to easily grant and revoke access to data on public networks. Using conditional access, users can define the parameters and conditions under which sensitive data can be shared and accessed. Furthermore, access can be revoked at any time automatically by predetermined, customizable conditions. Plus, encrypted data can be shared performantly with multiple recipients without the need for high-powered devices.
The NuCypher Token (NU)
NuCypher’s mainnet launched in October 2020. At the time of writing, the NuCypher network has a circulating supply of around 543 million NU tokens out of a maximum of 3.8 billion tokens according to CoinGecko.
Tokens were distributed by NuCypher’s innovative network node setup mechanism, the WorkLock, which received 225 million NU tokens by April 2021. This was used to launch the NuCypher network and allowed participants to temporarily stake ETH and receive NU tokens for securing the NuCypher network. By doing this, NuCypher nodes can earn NuCypher staking rewards. NuCypher nodes receive NuCypher staking rewards each month. This is a great example of how to earn a passive income with crypto!
NuCypher Staking
The WorkLock is an Ethereum-based Proof-of-Stake (PoS) distribution mechanism that coordinates worker nodes within the NuCypher network. A minimum of 2,000 node operators is required to stake 353,913 NU tokens for a minimum of 30 days. The WorkLock automatically restakes NuCypher staking rewards every 30 days unless a node opts out. Moreover, the WorkLock does not guarantee larger returns on NU tokens staked for longer than a year.
Nodes earn NuCypher Staking rewards for securing the network. NuCypher staking rewards come from network fees paid in ETH by users of the network, and NU token inflation. The NU token is staked by nodes across the network and disincentivizes bad actors or malicious behavior.
NuCypher DAO
The NuCypher decentralized autonomous organization (DAO) offers a public forum with several categories. These include news and announcements from the NuCypher team, proposals for submissions for genuine viable protocol upgrades, research and discussion plus an ‘uncategorized’ section for everything else related to the NuCypher community.
The NuCypher decentralized autonomous organization (DAO) was created with the release of the mainnet launch. Some of the underlying protocols were immutably fixed in code, whereas certain parameters have remained malleable post-launch, governed by the NuCypher DAO. The NuCypher DAO forum is the place to express ideas for protocol upgrades and improvements. NuCypher is looking for inspirational development ideas around economic stability and health of the network, improving security and service quality.
Not only can you pitch your ideas to the NuCypher decentralized autonomous organization (DAO), but you can also collaborate and integrate with other community members. As a complete open-source forum, anyone can contribute. However, only promising and legitimate development solutions will see success within the community. Furthermore, quality ideas and proposals from developers could appear within the NuCypher smart contracts.
Contributors to the NuCypher network must adhere to a morally strict ‘proposal pipeline’ structure that facilitates the shared processes and collaboration with seamless coordination. The NuCypher team kindly requests any new development ideas are put forth within NuCypher’s guidelines. The process begins by pitching your initial proposal in the ‘Research and Discussion’ category.
Why use NuCypher?
Overall, the NuCypher protocol is aimed at improving the security of the blockchain experience on a crucial and fundamental level. Moreover, NuCypher offers blockchain developers a decentralized privacy infrastructure that facilitates fully homomorphic encryption (FHE) and proxy re-encryption (PRE). NuCypher plays a foundational role in the development of access and security in the blockchain industry, with its novel decentralized key management system (KMS) and encryption technologies.
In short, NuCypher hasn’t focused on reinventing the wheel. Rather, NuCypher has developed on the advantages of public blockchains, creating a trustless solution for security around the transfer of sensitive data and decentralized key management system (KMS). Furthermore, by accessing the NuCypher network, it is possible to manage private key access and controls with multiple users simultaneously.
NuCypher’s encryption services offer extremely rare and exciting fully homomorphic encryption (FHE) cryptographic libraries for users to take advantage of. This includes; “the reference implementation of the Umbral threshold proxy re-encryption (PRE) scheme”, pyUmbral and rust-umbral, “a Rust implementation of Umbral with bindings to JavaScript and Python’. Also, a “threshold BLS signature library”, NuBLS.
NuCypher Network & NU Token Summary
The NuCypher network offers users unparalleled opportunities for secure data encryption and transfer throughout the blockchain industry and beyond! Moreover, the NuCypher decentralized key management system (KMS) makes permissioned access across multiple parties a breeze. Moreover, NuCypher KMS uses novel privacy-preserving technologies that can reassure blockchain developers of secure sensitive data storage and transfer. This includes the management of encrypted secrets stored on any backend.
The NuCypher network is a breath of fresh air within the crypto industry, thanks to novel protocol dynamics, fully homomorphic encryption, developer focus, decentralized key management system (KMS), and little competition with other projects. As the world continues to move online, and the mass adoption of blockchain creeps closer, NuCypher looks set to play a pivotal role in the prominence of blockchain in data security systems. In summary, this makes NuCypher a project with solid ground for the 2021 bull market and beyond!
As one of the latest cutting-edge technologies, the security, immutability, and transparency of blockchain can be applied across a range of industries. This can vary from the sports, insurance, or real estate sectors, to the music, art, and fashion industries too. To learn how to integrate blockchain into current centralized IT infrastructures, see our Blockchain Business Masterclass course.
Also, our Blockchain for Enterprise course shows students how global corporations are currently implementing blockchain applications. To ensure your business remains legal and compliant with regulatory procedures when integrating crypto services, be sure to see the FinTech 101 course. We teach students all they need to know about FinTech regulations around the merging of finance and technology. Discover this and so much more, at Ivan on Tech Academy today! Also, don’t forget to follow us on Twitter @Academy_IOT! We’d love to hear your thoughts about NuCypher and the NU token!
