ForkLog attended Blockchain Bitcoin Conference held September 23 in Ukraine’s capital of Kyiv. This year, the conference has featured three sections: one for newbies, one for pros, and one for developers.
Even though the entrance fee was rather high, the number of attendees reached 500 people. The participants were actively discussing the industry’s latest news while the event’s sponsors were showcasing their products.
The Newbie section was a one-day intensive course focused on providing basic knowledge of bitcoin and blockchain. What is bitcoin? What is blockchain? How to store bitcoins? How to trade cryptocurrencies? What is Bitcoin 2.0? Those questions were answered by the section’s speakers including Maxim Krupyshev, Kir Kelevra and Bogdan Skryabin.
The Pro Section was a neutral ground between the Newbie and the Developer sections. There were three sessions for reports: Finance, Fintech, and Govtech.
In his keynote speech the section’s moderator Mike Chobanyan noted that some speeches from the last year’s conference turned out to be prophetic.
Bitcoin is going mainstream, and even businesses that do not actually require the technology are getting interested in the trend. Central banks of economically developed countries were the first to see the advantages of blockchain, supporting and actively developing the technology.
Ukraine is one of the industry’s leading nations. Notably, it’s not a mere provider of brainpower for other countries, but also a provider of world-class blockchain products.
The speech delivered by Marina Gurieva, Head of Innovations at the Higher School of Economy in Moscow, was about the current state of affairs in the industry, as well as its future. Successful crowdfunding of several projects, including The DAO, Waves, Lisk, Digix, AntShares, Iconomi and Decent (with the latter two still underway), has become a significant event for the entire industry.
Apart from the market cap influenced by bitcoin’s halvening and Ethereum Homestead release, the deceleration of venture investments in the industry is also an important sign. China is still dominating both mining and exchange sectors, but otherwise miners and exchanges are consolidating. Another important trend is cooperation between several major banks and IT companies in umbrella projects like R3 and Hyperledger.
Sergey Bondarenko, senior manager at Deloitte, spoke about the challenges blockchain technology poses to national banks. The old and unflexible two-level banking system model requires more and more expenses while dealing with delayed or possibly distorted information.
Blockchain, on the other hand, is the technology capable of overcoming these disadvantages and performing data collection and management in real time. Implementing blockchain makes banks transparent for regulators, while central bank decrees in form of smart contracts can be implemented by commercial banks immediately upon their issuance. According to Sergey Bondarenko, the consensus mechanism in such a system is called Proof-of-State.
Attic Lab co-founder Sergey Vasilchyuk extended the topic of national blockchains. In cooperation with Ukrainian banker Sergey Fedotov, he is developing a blockchain-based banking platform with open source code. He invited everyone to join the development of a national crypto-ledger for registration and exchange of any digital values with no intermediaries involved. According to Sergey Vasilchyuk, Attic Lab has made a lot in this realm, and the project’s code will soon be freely available.
The Finance section closed with the report by Andriy Dubetsky, co-founder of Bitcoin Foundation Ukraine. He spoke about bitcoin applications in capital markets. Trading, syndicated credits, bonds, and corporate governance could benefit a lot from implementing blockchain, he believes. According to Greenwich Associates, blockchain implementation in capital markets will attract around $1 billion of investment from financial and technical companies in the year 2016 alone.
The second session kicked off with the speech by Benjamin Bomhardt, co-founder and sales director at draglet.com. He spoke about basic phases of exchange trading evolution currently standing at decentralized exchange servicing incapable of high-speed trading so far.
Fabian Hediger, co-founder of Bitcoin Suisse AG, shared his experience of running a bitcoin business in Switzerland. He spoke about the Cryptovalley, the canton of Zug famous for being friendly towards cryptocurrency companies.
As of July 1, 2016, residents of Zug are able to pay for public services in bitcoin. Bitcoin Suisse AG’s main areas of activity are exchange of cryptocurrencies, BTMs, consulting, seminars and training sessions. The company operates as a self-regulated organization in full compliance with Swiss legislation. The transition to fully regulated activity took Bitcoin Suisse AG about a month and 44,000 Swiss Francs.
Karolina Marzantowicz, Executive Architect for Central Eastern Europe in IBM Sales Distribution Organization, spoke about Hyperledger, an umbrella project seeking to create a common open standard for economic interaction based on distributed ledger, smart contracts, consensus and private management of assets.
She stressed that the system would allow for different consensus algorithms for different counterparties. For instance, expensive PoW is more suitable for anonymous interaction, while lighter PBFT is more suitable for private blockchains where everyone knows each other . She also urged people to experiment with and develop the project’s open code.
Edgar Bers, partner relations manager at HashCoins, spoke about the importance of mining for blockchain systems. Mining can be both subject to investment and a necessary infrastructural element for a corporate blockchain system. He also highlighted mining with an option of switching between currencies provided all of them use the same algorithm.
Andrey Zamovsky, Ambisafe founder, took a close look at the evolution of financial markets after the emergence of blockchain technology. Classic IPO process compared to ICO is twenty times as expensive and prolonged, he noted.
However, the ICO concept still has to solve the same problems IPO process had faced earlier, e.g. investor protection. Currently, there is a multisig escrow mechanism that fits the purpose with investors transferring their money in tranches as the project covers intermediary tasks specified in its working plan.
Eugene Nevmerzhitsky, managing partner at Financial Studio, presented a cryptocurrency investment platform providing three formats of investment: monetary (including Bitcoin), material and intellectual. The company provides registration and consulting services, as well as provision of raised funds in national currencies. Eugene Nevmerzhitsky stressed though that cryptocurrencies can’t replace national currencies, that Ukraine’s legislation doesn’t include any provisions for Bitcoin and that it will most likely remain that way.
Founder of GEO, Maxim Demyanyuk, was the first to speak at the Govtech session. The main feature of GEO is that the protocol allows for deploying a decentralized credit network without blockchain. In this manner, no node of the network possesses information about all transactions within the network, but knows only those that it carries out. The protocol’s possible applications vary from financial transactions and loyalty programs to unwanted messages restriction and even AI systems in the future. GEO is an open source project, and the team invited everyone interested in alternative solutions for decentralization to participate in its finalization.
Lasha Antadze of the Innovations and Development Foundation spoke about the latest achievements of e-Auction. Two Ukrainian towns, Kherson and Bila Tserkva, are already using the platform for municipal property leasing.
Apart from that, the first public land auction initiated by Ukraine’s State Cadaster Service was recently held in Odessa. At its early stage the project’s team intends to use the e-Auction platform for land leasing and selling, after that it will be used to sell property of bankrupt banks, and finally, the municipal property.
Artyom Tolkachev, CEO of Deloitte CIS, spoke about legal aspects of smart contracts. He noted that in legal terms smart contracts were not contracts but a technology enabling some activities to be carried out automatically. Aside from obvious advantages, like reducing the transaction costs, smart contracts have certain disadvantages, said Tolkachev. Firstly, it’s lack of cohesion with the real world. For example there’s no technology enabling automatic supply of grain once it had been paid for. Secondly, smart contracts still involve human factor with The DAO being the most notable example. Tolkachev also said he supports the idea of granting the judges rights to nullify smart contracts.
Closing the PRO section was Alexey Konashevych of E-VOX, the project known for its e-Vox:NaRada blockchain service for e-voting. Konashevych spoke about possible use of blockchain perspectives in Ukraine’s political processes reminding that recently the E-VOX team was among the winners of EGAP Challenge competition of e-democracy projects.