Today, I have interviewed the NuCypher team on their ICO and future projects. NuCypher is developing a data privacy layer for public blockchains and decentralized applications. NuCypher is listed to organize a token sale in Q2–2018.
1) Could you please explain in a nutshell what is the Nucypher KMS? What problem is it solving? What are the main use cases?
NuCypher is a data privacy layer for public blockchains and decentralized applications. If a user has private data they want to put on a public blockchain, today there are no scalable tools to achieve this. NuCypher enables DApp developers to store, share, and manage private data on public blockchains.
NuCypher’s Key Management System uses a form Public Key Encryption called Proxy Re-Encryption to provide decentralized key management and cryptographic access control services.
Use cases include:
A. Sharing encrypted files (“Decentralized Dropbox”)
B. End-to-end encrypted group chat (“Encrypted Slack”)
D. Decentralised Database
E. Patient-controlled electronic health records (EHR) — Medibloc
F. Decentralized digital rights management (DDRM)
G. Blind identity management
H. Secret credentials management for scripts and backend applications
I. Shared credentials and enterprise password management
J. Mandatory access logging
K. Mobile device management (MDM) and revocation
2) What are the main pillars of Nucypher and what value are you adding to your industry value chain? What differentiate you from your competitors?
One of NuCypher main values over the competition is scalability. Other technologies like MPC (multi-party computation) or FHE (fully homomorphic encryption) would be applicable however there are drawbacks to these applications. MPC and FHE for data sharing is a magnitude slower than proxy re-encryption for this task. There are centralized key management systems such as AWS CloudHSM, Azure key vault, Hashicorp vault. As for decentralized there is not anyone with a similar approach
3) Isn’t your solution too centralized? Which are the main obstacles to the adoption of your solution by enterprises?
Our product can be used for permissioned or permissionless use cases. Our decentralised approach will be distributed during a token launch where our community will be running nodes globally. It is important for the health of the network that these nodes are widely distributed.
4) Why did you decide to launch an ICO and why do you need a public Token Sale?
Distributing nodes is important to the integrity of the network. A crowd distribution would be able to accomplish this. We are looking for a diverse audience of node operators as possible.
5) How does your token function within the platform and why is it needed? How did you decide the total supply and distribution among stakeholders?
Token economies are not yet released which include points like token supply. Putting that aside for a second, a token incentive mechanism is needed to incentivize network participants to perform proxy re-encryption key management and access control operations while ensuring correctness of computation. This is achieved via the NuCypher KMS Token. In order to perform re-encryption services, nodes are required to provide a security deposit or collateral using NuCypher tokens. If the node behaves it should be rewarded and can keep its stake.
6) Where do you see the value of your token in the medium to long term and the ultimate benefit for the token holders?
Future valuation of any token is not something we can speculate on for obvious reason. Value is usually pegged to utility and we believe that we are building a useful network. We hope the community will find value in running nodes and participating in operating the network which would require NU tokens.
7) Thinking about the future, what are your plans after ending the ICO? Are you afraid that the volatility of the cryptocurrency market might affect the economy of your project in any way?
Our intention is a parallel approach to support community with information, assist those interested individuals who operate nodes, and support projects that intend to use NuCypher KMS for their privacy layer. The last point is very important because NuCypher will only exist if projects find it useful and want to integrate it into their stack. So all of the mentioned items need to be supported concurrently.
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Disclaimer: This interview and the information contained herein is not intended to be a source of investment, financial, technical, tax, or legal advice. This interview cannot substitute for professional advice and independent factual verification.