NuCypher raises $4.3m in presale to bring private data to public blockchains

San Francisco, California-based NuCypher, a privacy layer for the public blockchain and decentralized applications, has announced the close of a $4.3 million presale from leading cryptofunds and venture firms in the token space, led by Polychain Capital, according to an email CoinReport received from NuCypher’s PR firm, Upbeat. NuCypher was in the Summer 2016 class of Y Combinator.

According to a media kit by the PR firm, participants in the presale included Satoshi Fund, Coinfund, Michael Novogratz’s Galaxy Digital Assets Fund, Blockchain Korea Partners, Mission & Market, Kenetic Capital, Amino Capital, 1KX, FBG Capital, Nima Capital, Compound VC and Semantic Ventures.

Technologies like IPFS, Swarm and Ethereum are, by definition, public, and anyone can examine them. If somebody is building a decentralized application (dApp) that has to do with sensitive or private data, it presents an issue.

Using a technology called proxy re-encryption, NuCypher, which is part of the core infrastructure stack for dApps, lets developers store, share and manage private data on public blockchains.

Proxy re-encryption is a form of public-key encryption that lets a proxy entity transform ciphertexts from one public key to another, without finding out anything about the message underneath. It’s a method for John to share encrypted data with Christina, without sharing his private key or needing to decrypt the data first.

NuCypher is using the proxy re-encryption technology to build a powerful and flexible cryptographic access control infrastructure for blockchain and decentralized apps. As proxy re-encryption is basically a further scalable type of public-key encryption, it is most suited for distributed, data sharing scenarios in which encrypted data has to be shared and consumed by several recipients. It solves the latency and performance issues besetting current methods.

The company says that the reason it is seeing so much adoption in both centralized and decentralized backgrounds is that there has been an explosion in distributed systems relatively recently, not just in blockchain, but also in Internet of Things, big data and cloud.

Image via the press release