A Deep Dive Into NuCypher

Markets • Aug 31, 2020

Starting tomorrow, CoinList users will be able to participate in the NuCypher WorkLock on CoinList. WorkLock is NuCypher’s novel network node setup mechanism in which participants stake ETH, run nodes, and earn NU (NuCypher’s native token). NuCypher’s founder and CEO, MacLane Wilkison sat down with CoinList’s Spenser Huang to talk about NuCypher’s approach to privacy and discuss the project in detail:

1. What is NuCypher and why are you building it? Why does a secondary privacy layer matter for public blockchains?

NuCypher is a decentralized threshold cryptography service implemented as a layer 2 network on top of Ethereum. It provides a set of nodes that are optimized to perform threshold cryptography operations in a performant, secure, and trust-minimized manner that is easy and convenient for developers to use.

This is interesting because threshold cryptography has tons of use cases both in and outside of blockchain, such as secret sharing, random number generation, signing/multi-sig, and distributed key generation, but it is difficult to deploy safely. Who holds the shares in a threshold cryptosystem? How do you guarantee they’ll behave correctly? How do you guarantee they’ll be available? The NuCypher Network is custom-built to address these exact questions. It provides a set of interfaces and runtimes for threshold cryptography operations along with economic incentives to ensure proper node behavior.

2. What is proxy re-encryption? Why is it a better technology for a blockchain key management system rather than other public key encryption technologies?

Proxy re-encryption is a type of public-key cryptography that allows an untrusted proxy to re-encrypt (i.e. transform ciphertext from being encrypted under one public key into being encrypted under another). The interesting aspect of this re-encryption is that it can be done atomically, without decrypting the ciphertext first or having access to decryption keys. This is extremely powerful in the context of decentralized systems where the nodes are pseudonymous or anonymous and shouldn’t be trusted with a decryption key or access to the message.

Proxy re-encryption enables private data sharing across public blockchains and decentralized networks.

3. What is the NuCypher team's background and what qualifies the team to solve this problem?

Our team is an eclectic mix of engineers, computer scientists, distributed systems engineers, and cryptographers. We often joke that the ideal NuCypherino either has a PhD or dropped out of college!

The team has built cryptographic libraries including pyUmbral (our threshold proxy re-encryption scheme), NuFHE (an experimental fully homomorphic encryption library), and ZeroDB (an end-to-end encrypted database).

4. What is the rationale behind the NuCypher WorkLock?

The WorkLock is a permissionless network node setup mechanism that allows anyone to stake ETH, run a node, and get NU.

We designed the WorkLock to mimic the permissionless aspects of proof-of-work mining: anyone should be able to participate and it shouldn’t be gated by connections or access to large amounts of capital or processing power. Instead, we wanted to prioritize active network participants: the stakers who will operate nodes for the network.

The WorkLock is designed to result in a robust group of decentralized network nodes supporting a strong distributed network.

5. NuCypher recently held the CASI staking program, what has been the general feedback and what are you looking to improve upon?

Our “Come and Stake It” incentivized testnet saw participation from over 1400 unique wallet addresses, with over 550 addresses fully qualifying for a genesis stake in the network.

At peak, over 1,000 nodes were running simultaneously. It was incredibly instructive to see the network operating at scale and we were able to optimize many network-related things like node discovery to support large numbers of nodes.

We also had a significant number of feature requests, bug reports, and other contributions, ultimately resulting in:

174 new issues filed
85 issues closed
131 proposed PRs
124 merged PRs
14 upgraded versions

6. What are some of the NuCypher use cases that you are most excited about?

Beyond the use cases that are ready for deployment on day one, I’m most interested in seeing what threshold cryptography primitives are deployed onto the network by the DAO. For example, I think threshold BLS signatures (or proxy re-signatures) are incredibly compelling because they would enable the network to participate in validating blocks on ETH2 and other BLS-based networks. This would hook the NuCypher network into the DeFI ecosystem and you could imagine people building novel things like trustless validators or staking pools.

7. What is the value accrual mechanism of NU and what are its use cases?

NU is a native cryptocurrency used as a stake in order to run a node on the network. This provides Sybil-resistance so that it’s difficult for malicious entities to spin up hundreds or thousands of nodes to take over the network. It also incentivizes correctness of computation and security of the system by ensuring that NU holders have skin in the game, which may be slashed for misbehavior.

Additionally, NU stakers, via the NuCypher DAO, can submit and/or validate proposals that impact the network such as pricing and contract upgrades.

8. Looking forward, what’s coming up next for the NuCypher network?

Mainnet! This will be the culmination of over three years of hard work by our team. An incentivized threshold cryptography network governed by the NuCypher DAO will be a significant achievement and we’re excited to see what direction the community takes it.

Register for the WorkLock here »

Legal Notice

This blog post is being distributed by Amalgamated Token Services Inc., dba “CoinList,” or one of its subsidiaries. This blog post and use of the CoinList website is subject to certain disclosures, restrictions and risks, available here.