“We have a lot of large technology providers like Facebook, Amazon, Google that give us a hugely valuable service in exchange for giving up all of our information to that service provider,” said co-founder and CEO MacLane Wilkison. “They are able to monetize all our transaction information, our identity information, our browsing data, [and] our social media data in exchange for providing us this service. And as a society, we’ve paid the price for that in a lot of these large-scale data breaches.”
NuCypher is a proxy re-encryption network that helps protect a user’s identity. In a proxy network, a third party can make changes to a cypher-text created for one individual so that another person can then read and understand it.
Wilkison said that following the data breaches in recent years at Yahoo!, Equifax, JPMorgan Chase and LinkedIn and the controversy surrounding Cambridge Analytica for political purposes, people are more wary of trading privacy for convenience.
Blockchain technology may protect users’ privacy by allowing them to mask their identities during transactions. This is important as many different industries are considering using blockchain to improve their online service. That includes protecting consumers even as manufacturers and service providers work to build stronger levels of engagement with them.
Another factor for businesses considering blockchain: cutting out the middle men. CEO Josh Fraser said decentralized networks enable businesses to hold on to more of their revenue. That may give them more incentive to create new products and services. He said there is a powerful link between incentives and innovation.
Fraser pointed out that even Uber and Airbnb take sizable percentages from every transaction. “They provide a lot of services for that fee,” he said, “but what we’ve seen is that when we’re able to cut out that middleman, the fees go with it.”
Fraser said that decentralization may also create more open markets. For example, a number of countries have outlawed Uber and Airbnb. “In Argentina, it’s so extreme that with the credit card companies to prevent people from being able to purchase services [from Uber]. If we could create a peer to peer marketplace which is built on cryptocurrency, we don’t have to face that limitation,” Fraser said.