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About NuCypher (NU)

A layer-2 solution implemented on top of Ethereum, the NuCypher protocol offers one-stop privacy and security-key-management services for independent blockchains/decentralized applications (“dApps”). An ETH-run ERC-20, NU is NuCypher’s native rewards token.

Solving for the limitations of centralized data security providers, NuCypher leverages a cryptographic concept known as Proxy Re-Encryption (PRE), allowing for a decentralized approach to discreetly sharing private data on public chains (Messari).

At its core, NuCypher seeks to enable developers to share sensitive data among network users. Viewed as more scalable than traditional public-key cryptography, NuCypher’s PRE scheme delegates decryption access controls with a level of security and efficiency that legacy networks supposedly can’t rival. These access controls hold the key to NuCypher’s cryptographic puzzle. Data owners can set them for any given piece of data such that only intended parties can decrypt the information by leveraging Umbral, the network’s re-encryption scheme. Within Umbral there is an all-powerful node mammal-being called Ursula, which is, as one NuCypher blogger-engineer put it, “the character in our narrative that performs this PRE operation,” running the show and doing things traditional centralized plain-vanilla public key cryptography encryption services can’t. At any moment in time, Ursula stands ready to perform re-encryption in exchange for a monetary reward, even in the event key authority figures are offline; critical to the process are the network’s re-encryption keys, which facilitate the transfer of cyphertext (i.e., encoded data) from one public key to another.

For dApps and public blockchain protocols, NuCypher would seem to be uniquely positioned as a means of enabling projects to manage and share sensitive data while simultaneously leveraging the benefits of a fully decentralized and permissionless ecosystem.

Cracking the private sector doesn’t seem out of NuCypher’s reach. Healthcare networks and financial service providers (among others) need a secure means of sharing sensitive data amongst intended recipients.

Brainchild of computer scientists MacLane Wilkison and Michael Egorov, NuCypher in 2015 began carving a niche in helping large banks manage data. The project had enough promise and success to justify a spot in the Y Combinators accelerator class the following summer, leading to a seed round of funding that saw NuCypher raise $750,000.

Seeing promise in decentralized, permission-less protocols, NuCypher shifted towards serving blockchains and dApps, and in 2017 marked their entry into the crypto space with a privately held $4.4 million ICO. Coins were available to the public within a year. The network went live in October 2020 and NU (closing that year under $0.20) started to rally (to more than $1) around one year later in October 2021.

Within the NuCypher ecosystem, the NU token serves as the grease that keeps the gears grinding. It’s a reward token used to incentivize nodes (Ursulas) to perform re-encryption and access control services on the network.

In October of 2021, NuCypher found momentum in the wake of the news it was merging with fellow privacy-based protocol Keep. The move saw NU’s transaction volume spike 20,000% within a 24-hour period, representing roughly $2 billion worth of value swapping hands. 

Wilkison has said that innovation can be expected from the network’s DAO. It’s a development that could see the protocol become more enmeshed within the DeFi space through projects like trustless transaction validation and lending pools (CoinList).

The current price of NU

As of early February 2022, NU was changing hands for roughly $0.55. A move downward to start the year comes on the heels of massively bullish autumn for the privacy-based coin. NU reached an all-time high of $2.61 in mid-October.

NU’s downward trajectory follows the path of other major digital assets which have shed value for much of January and the first part of February 2022, amidst inflationary concerns and a risk-averse marketplace.

How the price of NU is determined

NU price is in part determined by the coin’s deflationary nature, unlike centralized currencies which tend to be inflationary as they are printed capriciously and by decree (“fiat”). Nucypher is capped in terms of the number of tokens supplied by the network. As of February 2022, a total of 703 million out of a possible 3.89 billion NU were in circulation, representing 18% of future cumulative supply.

According to CoinMarketCap, NU’s remaining token supply will be released periodically on a monthly schedule. New coins are also provided to node operators as a means of payment for re-encryption services.

What the bulls are saying

*“Using NuCypher, users can share private data between one another on a public blockchain, eliminating a need for a private network,” Investor Place said.

 *"The approval of the Keanu [merger] …is an exciting moment for both the NuCypher and Keep communities and a big milestone for the entire crypto space: the first-ever merge of two decentralized networks,” Coin Desk said.

 *NuCypher is well-positioned to service the market,” said David Hamilton, Securities.io, predicting continued demand for high-end decentralized encryption protocols.

What the bears are saying

*Based on data from early January of 2022, the general NuCypher price outlook was hardly bright, with 21 out of 28 technical indicators looking bearish, according to Cryptopolitan.

 *When NuCypher celebrated the network's first full year of life, rallying at the time, Business Insider asserted that there was no clear indication as to what developments could have possibly driven such a sharp surge in demand.

 *It can be expensive to send and receive NU as it runs on ETH, and cheaper alternatives are hard to come by, according to a community Reddit thread.

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This article is for informational purposes only and takes no account of particular personal or market circumstances, and should not be relied upon as investment, tax, or legal advice. For investment, tax, or legal advice and before taking any action you should consult your own advisors. Note that digital assets such as cryptocurrencies present unique risks for investors. Please see our disclaimer regarding risks specific to holding digital assets before investing.

May not be available in all jurisdictions.

This content is correct as of February 2022.

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