Cryptocurrency can often be as risky as it is complicated, sometimes riskier.
Its definition alone can be difficult to understand: “a digital currency in which transactions are verified and records are maintained by a decentralized system using cryptography, rather than by a centralized authority.”
And recent headlines have drawn attention to elaborate scams that have cost investors billions of dollars.
Crypto scammers have stolen more than $1 billion since 2021, according to a report from the Federal Trade Commission.
Those risks are increasing.
“From January to November 2022, hackers stole $4.3 billion worth of cryptocurrency. This represents a 37% increase from 2021 over the same period,” according to a study conducted by privacyaffairs.com, which describes itself as an information provider and content creator dedicated to helping protect your private data and prevent a data or cybersecurity breach. stroke.
Scottsdale resident Brandon Pearson was not exempt from these scams.
“I lost $20,000 on one trade and then I lost another $20,000 on another trade,” Pearson recalled. “It’s just that these lessons, unfortunately, are much more expensive.”
After suffering the losses, Pearson thought there had to be a way to create software that could prevent these scams.
Pearson, a former student at the University of Northern Iowa, sought help from younger minds at Arizona State University who could guide him to software or help him develop one that would avoid these scams.
He consulted with members of the ASU Blockchain Club and met Matthew Jurenka, who recently graduated with his master’s degree in computer science.
“I just wanted to talk to someone capable or at least know how to let me know if this was doable,” Pearson recalled.
Jurenka told Pearson that it could be done, but that he needed to do some feasibility studies.
Pearson took a chance and paid Jurenka “a few hundred dollars” to do some feasibility studies on whether or not software with this capability could be created.
The results yielded something much bigger.
“The idea went from creating a complete crypto wallet with this extra layer of security to ‘let’s find a way to create the extra layer of security and take all the risk of taking the funds out of our hands,'” Pearson said. .
“What I wanted to do was be able to filter transactions and make sure people aren’t losing their money.”
The software analyzes proposed smart contracts on each cryptocurrency exchange to determine the reputation and security of the exchange’s website, and whether or not a proposal is suspicious.
“What our software does is it anticipates a transaction and acts as a buffer between your real wallet and the smart contract and the software defines what this smart contract is proposing and what it is going to do,” Pearson said.
The verbiage of these smart contracts is often not easily understood by the average cryptocurrency reader and consumer, according to Pearson.
“With smart contracts for a guy like me, or even a guy like Matt or Elon Musk for example, you can’t just read that when it’s presented to you, you just have to trust what this website says that the smart contract is going to to do, you have to trust that that is exactly what is going to happen. And that’s not always the case,” Pearson said.
The software not only reads the complex verbiage of these contracts, but Pearson said it could also have been used to detect million-dollar scams like the $120 million loss suffered by BadgerDAO in late 2021.
“BadgerDAO clicked on a link…and they were scammed out of $120 million,” Pearson said, adding:
“We spoke to someone who was involved with BadgerDAO and they told us that our software would have prevented it entirely.”
The software, known as Core Protect, can be downloaded in browsers such as Google Chrome, Firefox and Microsoft Edge and Pearson hopes his software will serve as a tool that brings fortune to its users and restores a sense of security to Cryptocurrency.
“I think our software will help Crypto round that curve and become more mainstream,” Pearson said.
“With software like ours that can filter transactions and make sure people don’t get scammed, it puts trust back into cryptocurrency and we think it will open the doors for the bigger banks to get into something like this because collateral exists. now.”