Crypto

Meet the Man Who Fixes Fraud Using Crypto

Tuesday, December 20, 2022 11:44 a.m.

Dan Sutherland has worked in technology for 25 years. His in-depth knowledge of how things are done is accompanied by rigorous questioning of why things are done the way they are, often with surprising results.

An early foray into unconventional thinking came when his managed hosting company ran services for eBay. In the days before cloud computing, he realized that for them the data center was horribly inefficient, so he persuaded them to move to a utility model, a precursor to cloud computing, which was faster, cheaper and greener.

“It worked so well that in 2005 we made the decision to transition from a managed hosting company to a first-ever cloud company.”

He ran this business for another 11 years, before selling it to Six Degrees in 2016. Dan admits he loves working with cutting-edge technologies, where he can take on big challenges.

Introduction to the world of cryptography

Crypto came into his life through a photographer friend in Vancouver who accepted payment for some corporate photography in Bitcoin. Initially, Sutherland was skeptical, but in 2015 he just couldn’t ignore it. Convinced that blockchain would change a lot of things, he invested and waited for the right opportunity.

“We were thinking about identity. Because in real life, I know who I am and others know who I am. Humans have a desire to trust each other and we rely on instinct and observation to build that trust. The question is therefore not to recreate identity, it is to reimagine trust.

Sutherland gave the example of the good old days, when the customer could shop at a local greengrocer for cash, only paying for the produce at the end of the week.

“It works – there is trust. We wanted to understand how we could take this human concept of trust and replicate it for the online world.

At the same time, Sutherland was exasperated by hundreds of iterations of his online identity, all kept in different formats and with slightly different or unmatched detail.

“I was now thinking of replacing all the versions of me buried in databases on the Internet with a single electronic self that was proven to be true and belonged to the person it related to.”

Outdated databases and smartphones present an opportunity

Sutherland argues that the technology has missed a trick. “Although processing speed has increased exponentially, today’s databases are still just index cards. Back then, you had to gather data to be able to query it. It was the best option. Now that is inaccurate and risky”

Again, he began asking questions about this approach: “Why does data need to be centralized where it is most at risk? Databases are honeypots for hackers. And after all, we now have super-fast Internet connectivity, so data can live anywhere and always be quickly accessible. »

Coupled with the smartphone functioning as a supercomputer in everyone’s pocket, Sutherland made the leap by moving user data to phones and using the network to access it. “Blockchain, with its complex underlying cryptography, made perfect sense to provide the solution.” Sutherland had found his opportunity.

Then came the pandemic and Sutherland and his team had to adapt to a very different reality.

“Not knowing how long things were going to last, we took our foot off the development pedal and instead pivoted to a research and development team.”

Taking time allowed the team to see things differently. They realized that Web3, with its decentralized structure, was the perfect model for the network, and they modeled parts of the data distribution on Theta, a distributed video platform used for the PlayStation Network.

“We started to imagine a decentralized Web3 network that would be owned by the user and controlled by a DAO. This would allow for much greater flexibility than that offered by a traditional company. communicate freely without the threat of a bad actor entering and taking over the network.

Return ownership and identity

Another beauty of the network is that it is non-custodial – all data is kept on the individual’s own smartphone.

“Self will never own or store user data. It’s about enabling people to securely share their own data, in any way they see fit.

“Personal data and identity are not commodities in my view. Selling identity is a bit like selling air. It infuriates me when I am told that my identity has expired and that I must renew it. I’m like – I didn’t expire, what are they talking about?

Again, Sutherland takes the road less travelled. When individuals speak with institutions, they are often questioned by the institutions to confirm their identity. Individuals cannot demand the same assurance in return from institutions.

“Why not, why isn’t the process symmetrical?” supports Sutherland. “What if we could provide a symmetrical service and both parties could confirm the identity of both parties? This alone removes entire swathes of fraud”

Closed access granted anonymously

Sutherland has big ambitions for the Self project. For individuals, Self is focusing its free app on helping people protect themselves against fraud, making communication safer and giving people control over their data. In the case of children using the application, delegated permission from parents or school allowing them to experience the wonderful world of the Internet without the threats present online. This thinking extends to facilitating groups creating closed online communities.

“You can use your Self membership to create, for example, a Telegram group where you know the other members are human. But the project is open source so users and developers can extend trust to everything their community needs, from better parent-school communications to a way to prove and share your educational and work history.

A big part of Self is the level of anonymity that is possible. “If I buy a pair of sneakers, I don’t necessarily want to give any personal data to a shoe company, not even my address. It’s just not necessary. Personal data should be shared on a need to know basis only, in order for a retailer to ship shoes to my Self account, the courier might ask me to confirm a physical delivery address, but the courier does not need to know my name or even the contents of the parcel. This way I can easily change the delivery address in case I am out of town and want my package delivered to me there? »

Currently, the consumer app is available on iOS and Android stores in beta. For enterprise, they released both developer tools and portals and their first commercial products are with launch customers.

Rethinking communications as an anti-fraud concept

Fraud, the key element Self combats, is often seen as an accepted cost of doing business. Organizations, even large ones like banks, find it cheaper to bear the cost than to fight it. Sutherland asked Self to change those calculations. Now, instead of adding a premium to cover the cost of fraud, it’s cheaper to simply prevent it. Considering that in terms of GDP, fraud is the third largest economy on Earth after China and the United States, then it makes sense to rethink how to attack it.

“Don’t just add a premium, process it at source.”

It will take money, and a lot of money, to do this, so Sutherland and his team are planning an IDO in the first quarter of next year. To learn more, visit joinself.com or download the beta app.

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