BLUE Staged to Tackle Blockchain Fraud With Secured Payments
Bitcoin’s upcoming 10th anniversary will mark a major milestone in the peer to peer electronic payments movement. The term “bitcoin” has arguably added itself to the colloquial vernacular while it penetrates mainstream consciousness as a household topic. Most crypto users envision the future of global payments integrating with some iteration of blockchain technology, but attribute its nascency to lacking scaling solutions. Several platforms are attempting to address these concerns with a variety of proposals including proof of stake, state channels, and off chain transactions, but the end solution will likely be an amalgamation which attempts to merge all the approaches into a smooth operation. Beyond scaling issues however, nobody is paying attention to the most severely overlooked limitation plaguing the space: fraud. Phishing attacks, scam tokens, and private key thefts continue to impair even experienced blockchain users. With billions of dollars flowing into cryptocurrency annually, thieves have major incentives to further obscure their deceptions, yet nobody is addressing this major limitation to widescale blockchain adoption.
BLUE is the first company in the space attempting to secure blockchain payments for fraud detection and scam prevention. The project seems promising with an experienced team and a comprehensive approach to ensuring safety for blockchain users. They claim to have developed their payment expertise while working with companies like Visa, Square, and Apple and now promise to transfer those insights to the blockchain industry. Their innovative approach to scam prevention includes an SDK for any blockchain platform to integrate for the safety of their users, meaning BLUE is platform agnostic. While competitor projects focus on smart contract auditing for token creators, BLUE’s main focus is to provide security tools that will enable end users to have confidence in their online payments.
Without detailing their entire whitepaper it is difficult to profile the extent of the project’s ambition, however highlights of their services include:
Trustless 2FA: The BLUE team has a patent pending technology that will enable users to defend themselves against compromised private keys by developing a decentralized Two Factor Authorization method. Even though there is a huge need for enhanced security measured for wallet owners, no such product exists on the market today.
Phishing Prevention: Using indexing and detection tools, BLUE aims to warn wallet holders if the wallet address they are sending payments to has been flagged as fraudulent for any reason. This would help prevent sending payments to the wrong ICO address, for example.
Static Analysis: Similar to Quantstamp, BLUE plans to analyze smart contracts for vulnerabilities and solidity bugs. The white paper details plans to detect infinite minting, ponzi schemes, and token locking among other vulnerabilities.
As attractive as BLUE’s services might be, there are several unusual factors surrounding the company’s presence. Firstly, the company is resting at a low marketcap of $8M at #322 on coinmarketcap. This seems to be a direct result of the company’s choice to avoid raising any funds through an ICO, meaning they landed on the market with a zero dollar valuation and a few bounty airdrops. To bootstrap a company sans ICO is extremely unusual and a noble effort that seems to put the interest of token holders as a priority. Although the team references their work history extensively, they chose to operate under anonymous conditions. This element of the project might be solely responsible for company’s low marketcap, as most investors are understandably unwilling to risk their funds with anonymous team members. It seems a bit contradictory that an anti-fraud company would choose not to be fully transparent about their presence, so I decided to reach out to the founder directly for an interview. The founder, @unibanker on Telegram, agreed to join on a recorded line to help placate the community’s fears while expanding on the company’s long term vision. Have a listen, or read the transcript and please comment below with your views on BLUE’s future.
DECEMBER 2017 TRANSCRIPT
Interviewer: Everyone is pretty curious about your existence. It is good to hear your voice.
Uni Banker: Yeah, sure. Thanks for setting up this interview. I am happy to sort of get in front of some of these questions and give people the great experience of hearing my actual voice.
Interviewer: Who are you and what is your background? What experience do you have?
Uni Banker: I have a lot of programming experience. I started writing code when I was pretty young, on one of these old kind of ’80s Radio Shack computers. I have always been interested in computer technology and computer software and development since then. I have also created a series of different businesses. One of them was a mobile app company. I had another…back in the day, one of my first ones was we would buy up broken iPods and fix them. That was pre-iPhone, which kind of led me later to iPhone programming as well. It kind of flowed naturally. So, I’ve done a lot of programming work over the years. I’ve started a lot of different kinds of businesses. They’ve always tend to be sort of cutting-edge work for a few years, there is a big benefit for things like fixing iPods and refurbishing them. And then there is kind of a natural expiration for when that made sense. So, it is a lot of these different types of things. Lately, over the past couple of years, I’ve gotten more involved with some of these larger firms so I have a consulting company that I run that does software engineering. We’ve worked with Apple. They’ve been a client before. I did a stint at Visa as well. That wasn’t through my consulting company. I actually was full-time with Visa for a while there. So, I left there in April of this year, partially to pursue this. It was to kind of look into the future of payments technology because I felt like what we were doing there was looking at the past.
Interviewer: Who brought you in to Blockchain? How did you find out about it?
Uni Banker: I’ve been curious about it for…ever since I first heard about it, which was probably about six years ago or so. I haven’t been working on the code since then. Probably about a year and a half ago was when I really started digging into the technical. I found a copy of the original bitcoin source code, 010, way back in the day. Read that and understood it. And that kind of is where I got started. Now with Solidity, in Ethereum, it is so much clearer how to build something from scratch without reinventing the wheel. Without reinventing all the cryptography and getting miners behind you and all that stuff. So, we see this explosion of token creators, which is good but it is also bad. Right? As we know, there is a lot of bad tokens that come out. So the more I researched all the different tokens out there, ERC 20, it became clear that what was really needed was a system to evaluate the difference between them all. So that’s kind of how I arrived where I am now working on this project.
Interviewer: What is this project? What is BLUE? When was it born and how did you come up with it?
Uni Banker: So, the project itself, I would say we really solidified it in what would be like July of this year. We figured out exactly what we wanted to do. When I was at Visa, I kind of was interested at looking at payments on the blockchain but I couldn’t really sell it to people internally there. They sort of had a hard time understanding what the benefit of the blockchain was because we talk about decentralizing money, as much as possible so there is not a central power. It is kind of a hard sell to the person who is currently in power. They are not super interested in hearing about that. So that was sort of the beginnings of the project was just how can we take this sort of credit card company, easy payment system and bring it over to the blockchain. And it evolved from there to be something more like we are anti-fraud, anti-scam, on the blockchain. People are getting ripped off with these tokens all over bitcoin talk every day. There is 20 new tokens and 15 of the project creators from the last week’s tokens disappear. So, this is just kind of our way of entering the market. We’re going to say step one, we are going to focus on this niche community that is having all these problems with bad tokens because of the explosion, and the ease of creating them and eventually move into offering security on payments, just like credit card companies currently do.
Interviewer: Is it just you working on it or are the others?
Uni Banker: Yeah, so they are people that I’ve worked with on past projects. The only person I haven’t worked with before is the community manager and they are basically managing our telegram and helped us kind of get a foothold on what exactly we had to share. The forums online and things like that. The other folks, they are developers, business owners. They are a lot like me but with different specialties. We have one guy who is really more of a design focused engineer. And then someone else who is more of a back-end focused engineer. I like to think of myself as sort of a…I guess a front-end/convenience kind of person. I like to make things easier to use. That’s pretty much what our team is made up of. You can kind of see a brief description on the website of who they are or their title, anyway.
Interviewer: Is there any reason why you’ve chosen to stay anonymous?
Uni Banker: Yeah. I mean, there are a couple of reasons. The biggest one is just that if we are going to go and say we think that this token is a scam and that token is a scam, and we are advising you to avoid it, I just can’t imagine the creators of those tokens being super happy with us. Right? So if they know who we are personally, I fear that they will want to come after us. So, we need a little bit of dominance in this space before it is super comfortable for anybody to feel okay exposing their identity a little bit.
Interviewer: Are you implying that you do plan on exposing some of them?
Uni Banker: Yeah, we haven’t picked a date and exactly who is going to have their identities revealed but it is certainly something that I think long term has to happen. I think in the early days, it is better to be anonymous and in the later days, you really have to be public about who you are. I am asking people to trust me and also not saying who I am so I get that concern. So, that will change.
Interviewer: In layman’s terms, what is BLUE? What are the products and services that you are providing?
Uni Banker: BLUE is an assortment of security tools that developers use. So, ultimately, our end customers are actually other software engineers. But their end customers are wallet users so that’s people that are trading crypto. Maybe people that are just getting into it. They are first buying and selling their tokens for the first time and they don’t know what they don’t know. We would like to have these tools basically…make them a little bit more idiot proof if that makes sense so that they can be protected from having their private key stolen or sending money to an address that is a known phishing address. So, we actually index a lot of these bad actors and we produce a risk assessment on a centralized server that’s based on a number of different factors including community feedback, static analysis of the source code of the contract. We also look for some other indicators such as whether or not their source code is actually made public — if they verified on like Etherscan for example. We kind of aggregate this into a big score and you can think of it in terms of like how Rotten Tomatoes does movie reviews. They’ve got their editorial score and then they’ve got their community score. So, we offer these things through a centralized server and what that basically means is that anybody that is a developer of a wallet who wants to add that kind of functionality to their wallet, just has to integrate with our SDK.
Interviewer: You are saying this can go on every platform? Bitcoin, Ethereum — just depends on which developer is integrate with SDK?
Uni Banker: Yeah, I mean, it’s going to be pretty much up to them. We’ll kind of hold people’s hands in the beginning and sort of either do it for them or help them for free, get it set up. But I imagine…people just aren’t going to want to use a wallet if it doesn’t support BLUE.
Interviewer: You envision BLUE being pretty ubiquitous. Every wallet user, correct?
Uni Banker: Yeah, there is no reason not to do it. For the developers, for the users — it just makes sense. You want to secure transactions when you are moving money around.
Interviewer: I am a big supporter and love this project. In the white paper, you mentioned some threat metrics like minting. Can you go into detail about what you are talking about?
Uni Banker: Minting is an example of something… Let me back up real quick. What I was describing a minute ago could be considered the threat metrics. So, whether or not they’ve published their source code, there’s a number associated with that. There is a formula to average them together to see if this one is maybe more of a big deal so it gets weighted. It is weighted a little bit more than the rest. Infinite Minting is just another example. It’s something that we can actually find in that static analysis step which just means that we basically automate the reading of the source code and interpreting what it is without actually having to execute it. So, infinite minting just means the creator of the token has some function or series of functions that allows them to just make more. And I don’t mean through mining, I mean just through fabrication. They just can make up new tokens at any moment. That’s a big risk to anybody that’s holding a token. Let’s say you have a 10 million token supply and someone comes in and spends a lot of money to get 10% of that, they’ve got 1 million tokens. The creator can then just make 100 million tokens and it’s just extreme centralized inflation all at once. So, we see that as the big risk.
Interviewer: It is like the US government with quantitative easing — how they print dollar bills?
Uni Banker: Right, right. From the governments position, they are trying to control the market a little bit to avoid crashes and big bubbles and things like that. From where I’m standing, it doesn’t seem to be working and instead it is just sort of being abused.
Interviewer: You mentioned static analysis earlier. Can you go into more detail for the non-techies? You explained that it is a system with inputs and outputs.
Uni Banker: Yeah, so it is a pretty technical question but the way I’d simplify it is just that if you’ve got… Say a bit of source code is kind of like a recipe. Like you are going to cook…you are going to make bread or something. You’ve got a list of ingredients and a list of steps. Static analysis would be the process of looking at confirming that none of those ingredients are poisonous to humans for example, just by having a list of poison items that you should not include in a recipe. So, I guess that’s the best metaphor that I could give you. Really what it comes down to is inspecting the source code for things that we know are problematic if they are there. We’re looking for red flags. We are going to analyze the code without running it and basically come up with a score for whether or not we think it is safe, whether or not it has these flaws. Can the owner mint infinitely? Can the owner just…?
Interviewer: There is another company out there that is also doing something similar. They are auditing smart contracts. Do you know about Quantstamp? How is BLUE different from Quantstamp or is it similar?
Uni Banker: I am not an expert on Quantstamp. I’ve read through some of their documentation a little bit. My interpretation is that they’ve focused on static analysis exclusively and they do this for the purpose of auditing smart contracts. So, I think the way that they work is if you have an ICO, someone is going to launch a new token, they’re going to raise a bunch of funds, they might go to Quantstamp and say, hi, I need you guys to audit my smart contract and tell everybody that it is safe. Then they pay a fee with the token. So that’s a far cry from actually integrating into payments. That’s quite different actually. They are providing a service to token creators whereas we are providing secure tools for wallet makers. There happens to be that overlap that they are doing static analysis and we are doing static analysis but that’s quite a different, I think, use case. And for us, it is only one piece of the puzzle.
Interviewer: BLUE is trying to tackle a lot more than smart contract auditing?
Uni Banker: Right. We are not really in the business of providing audits for anybody. We are in the business for providing security for crypto users.
Interviewer: If your private key is stolen from your wallet, people can just take all your money immediately. BLUE is trying to integrate technology that is going to prevent that from happening. Can you expand on that or is that still unwraps?
Uni Banker: I am sure what you are talking about is our two factor authentication system? Is that right?
Uni Banker: So, two factor authentication traditionally, you go to a website. You log in with your password and then maybe they send you a text or you use an app that you have on your phone to put in a second code. And then, only with that second code and you do sort of escalated privileges such as changing your password or redirecting the email. So, the reason that you don’t see that kind of thing in cryptos is because that is completely centralized. There has to be some authority that’s got the access over it. So the challenge in providing it in crypto and securing people’s private keys a little better, securing their funds a little better is to do that in a decentralized way without trying to say that we own your log in keys because you know, any centralized authority can be subpoenaed by the government. They can be hacked. They could be malicious. So, this is all about creating a trustless system. So we’ve got a solution for this that is decentralized. I can’t really talk a whole lot more about it beyond that as we are currently still in the process of getting the patent for it.
Interviewer: Sounds huge. You mentioned BLUE being a beachhead. What does that term mean?
Uni Banker: That’s a fancy word meaning that you start in a niche audience and you grow from there. So, if you go and you see that there is ten people in the world that need some service, you can go and be the best ever because there is only ten customers. And it might not even be profitable. It might be a loss leader for you. But if those ten people suddenly turn into millions of people, you can keep your basic ownership of that market after its grown and while it grows. So, that’s something that I think about a lot. I think first mover advantage is sometimes conflated with just having a beachhead for a good opportunity. But what it comes down to is we grow with crypto. And I believe that it will grow and I believe that it is actually still pretty small at the moment. We’re getting a little bit into the specifics of business strategy that is not totally public information but you are correct to say that we are focusing on this niche audience and we do expect it to grow and for that to benefit us.
Interviewer: You mentioned a lot of big things are coming for BLUE in the next six months. Can you give us a sneak peak into the things that are coming up?
Uni Banker: So, we are going to publish a little bit of an updated roadmap for exactly that purpose. I can tell you that we’re very shortly going to be coming out with a modified MetaMask extension that actually integrates our SDK. So, that will be a demo for wallet makers to see what it is that MetaMask…not MetaMask but what the SDK does. We’re calling that MetaMask BLUE because of course we are. So, that’s the biggest thing for us on the immediate horizon. Beyond that, I don’t want to go too far in advance talking about what we’re gonna build for strategic reasons but also because it will change. It will change based on the reception of the initial release.
Interviewer: On December 21, 2017, you posted it in a telegram and it is all over the website and Twitter — can you give us a sneak peak about what we will be seeing then?
Uni Banker: I really can’t talk about that but maybe just… Maybe just put it on your calendar and check back.
Interviewer: Do you envision the feature of BLUE securing payment for companies like Chase and Amazon and other big websites?
Uni Banker: Well, I think that Chase and Amazon represent the old world. I think that Amazon may be prepared to evolve. I am not convinced that other banks are. The way I see it, the blockchain replaces the bank and BLUE replaces credit card processors. So, I don’t imagine that banks are ever going to need to adopt this because the banks are just going to eventually go away and not be part of the conversation at all, which I think is what everybody wants. We want to get rid of the centralized middleman. As far as Amazon goes, they are a forward thinking company. I know that they recently registered a whole bunch of crypto domains. I don’t know if that says their intention or maybe it is just hedging their bets. I would hope that one day, if they were accepting crypto and they were to go and look out into the market and say who is securing this, the answer is BLUE and that would cause them to adopt it. But I can’t say what they are going to do. Who knows? I really hope that that does come to fruition.
Interviewer: What is your long term vision for BLUE? Where do you see it in five to ten years?
Uni Banker: Where do I see it in five to ten years? That is a big question. I mean, if I am being optimistic here, I’d say it would be the number one provider of secure tools for crypto. Not just for securing them but for making them more convenient. I see the whole ecosystem growing exponentially by then. And that’s why we are doing this now so that when the world is accepting it and it is not just early adopters anymore, we are in the number one position.
Interviewer: Do you envision BLUE working with other companies or partnerships in the future?
Uni Banker: Oh yeah, I think partnering up with all these wallet makers is a huge strategic initiative that we need to be starting right when we can as soon as we can. Maybe we should be starting it now as a matter of fact, even though the SDK isn’t quite here. We should probably start those conversations. eCommerce merchants, really everyone. Maybe been mom and pops that down the road are interested in their brick and mortar store having the option to accept some kind of crypto. They are going to want secure options. They are going to need convenience for their customers. So, for sure. I predict we will have a ton of partners. It is going to be a big part of building BLUE.
Interviewer: You have such a large undertaking but you did no ICO. You raised no funds. Why didn’t you do any ICO and how did you go about distributing the tokens initially?
Uni Banker: So, the issue with an ICO, the way I see it, it kind of opens these companies doing this, up to some liability. They go and raise…let’s say you go and raise $20 million in an ICO. That probably means they spent $3-$5 million just raising it. So there’s no option of a refund. If their customers come back asking for one or if whatever the government their investors are from are saying you must reverse this because it is a security or something like that. I really think it just opens up too many issues legally. So, what we did instead is we airdropped the token. And that’s sort of like giving someone tokens. Well, it is just representative of really nothing in particular. It is just some tokens. So we just sort of gave them out. We just airdropped them and let people trade them amongst themselves. We didn’t sell these to people. There was no public offering. It was just a freebie. And that was a way to get it circulating, to turn it into a usable token that people could trade with each other and then we could on top of this, build an actual environment, a software development kit and wallets that integrate with that token as sort of a first step moving forward with sort of a larger idea.
Interviewer: You experienced some expansive growth. That was only two months ago that you started that.
Uni Banker: Yeah, it was maybe a month and a half ago. I am not sure. It has not been very long though so it has certainly grown much faster than I thought. But that to me just demonstrates that the market is looking for this. So, I am pretty pleased with the growth.
Interviewer: You were at a zero dollar mark account and now you are at $7-$8 million?
Uni Banker: Right.
Interviewer: You think it will go to top ten currency possibly?
Uni Banker: (Laughs). I’ll leave that to the market to decide I don’t really want to speculate on price.
Interviewer: The audience might want to know how the BLUE token is used but according to our previous discussions, you are still determining that?
Uni Banker: So, we just have to be careful about how it gets used so that it doesn’t actually represent some kind of value in a company or a stakeholdership or anything like that. It’s got to be strictly used for maybe as a prepayment or something like that. But it is accurate to say that we are still ironing all the details out.
Interviewer: You have pretty strong legal team onboard?
Uni Banker: That’s right.
Interviewer: Thanks for your time.
Uni Banker: All right, thanks.
[End of interview.]