Ukraine’s blockchain community is active these days: the country hosts several major conferences on the subject; several high-flying blockchain projects kick off; a full-fledged university course on dApp development is now underway. Adding to that, local authorities are mostly positive about cryptotechnologies.
Auction 3.0 has become the key local project to pave the way for other initiatives: it is the world’s first decentralized auction system for privatization of public property. First presented in early 2016 at BIP001 conference in Lviv by the Innovation and Development Foundation (IDF) representatives Lasha Antadze and David Kiziria, the project’s architecture allows for significant mitigation of corruption risks by attaining transparency of bidding, removal of red-tape mediation, and attracting as much bidders as possible.
Since then, the initiative has garnered wide support. February this year, Distributed Lab developers have implemented and tested the platform’s technical solution, whereas in early summer, EMK (headed by Coinessa and BTCZoo founder Vlad Kogan) has launched the auction’s first access point.
Major local banks like PrivatBank and OschadBank have joined the project. Microsoft has provided its computational resources within Azure. In early spring 2016, Ukrainian politicians, partner companies and IDF have signed a memorandum paving the way to statewide implementation of the system.
Contrary to the multitude of similar projects, Auction 3.0 went further than just memorandums. The decentralized auction system has already undergone several tests in different Ukrainian cities, with some of them already preparing to hold blockchain-based auctions. The country’s finance minister Alexander Danilyuk has recently announced that the system will be employed at the Deposit Guarantee Fund. This September, the country’s Cadaster Agency has run an experimental auction to lease 19 land plots outside Odessa with the aggregate area of 708 ha and overall cost of 1.3 million hryvnias (around 82.63 BTC).
ForkLog talked to Lasha Antadze, the project’s main ideologist and inspirer, about the present and the future of the blockchain auction.
FL: It’s been eight months since we have heard about the blockchain auction for the first time. Has anything changed in its concept since then?
Lasha Antadze: I may say the original concept and architecture haven’t changed at all. Back when we started, we had a clear vision of what processes we should decentralize, and how to mitigate risks of manipulation and corruption. If you reread the first draft of the auction’s concept, you’ll see there are few dissimilarities from the currently working system. As for the red tape, we have supplied both the technical solution and the full package of provisions and legal amendments. We explain they’re inseparable and have to be passed together.
FL: Recently the opinion that changes in post-Soviet nations are impossible has become widespread. But with Auction 3.0 we can see clear success. What’s your success formula?
L.A.: I think post-Soviet nations, and especially Ukraine, are the best place for such revolutionary reforms. Georgia has become one of examples of such transformation. But it was unlucky; there was no blockchain back then; and the country will have to accommodate once again. We have to realize that it’s us that the reforms depend on, they depend on every individual doing their best to change things for the better every day.
Auction 3.0’s success comes from the people who believed in the project in the first place, and who still spread the word. Notably, the auction’s project is still 100% voluntary, and it works only due to daily contribution of energy and motivation. There are 17 developers, five lawyers, one multi-purpose employee, three activist groups, two heads of municipal property entities, representatives of the Geocadaster, two banks, bloggers, and so on.
FL: We heard you were going to attend the cryptoanarchist congress in Prague. Your project has already become a breakthrough not just for Ukraine, but for the very libertarian idea. What you will be speaking about? What experience are you going to share with your foreign colleagues?
L.A.: Yes, the auction’s approach is a libertarian paradise as it hands governmental authority to the private sector. Budgetary assets are not spent to maintain information infrastructure. The nation state’s govtech monopoly shatters. In Prague, I’m going to be absolutely sincere. I’m happy I can show my hand.
The auction’s project, I believe, will soon be transposed in other countries. It’s a universal tool effective on a global economic scale. By the way, the Macedonian ministry for information community and administration has invited me to give a speech in late October. I’ll tell them about the project, and will attempt to outline a roadmap for Macedonia’s inclusion in the world of blockchain.
FL: The auction’s capabilities have been proven locally in several Ukrainian cities and towns. Is this approach effective? What perspectives it may entail? In your opinion, do the people beyond the industry understand blockchain’s advantages?
L.A.: Going out to people is a must if we want them to understand and join us. Each time there’s a problem with local officials, we contact local activists. They know their trade and restore the reforms vector in no time. The word “blockchain” doesn’t actually matter here. It’s just an effective tool for removal of trading from closed rooms, increasing municipal revenues, and granting everyone a possibility to use the land. It may restore their hope that at least something is getting better in their country, in their region, or in their city. I don’t have to explain a lot. On the contrary, I have to listen.
FL: We know about the initiative on integrate blockchain in the property rights ledger. What’s the project’s concept and its current status? How a blockchain ledger may be superior to a regular centralized ledger in the eyes of average people?
L.A.: The project is but a concept now. It may be considered a reaction to several govtech blockchain initiatives leading us from government monopoly to private monopolies under the mask of Satoshi. Blockchain solution without competition model and free market is much worse than a government administrator.
FL: Recently Ukraine’s land cadaster service has tested the auction. What’s your estimation of possible effect from total implementation of Auction 3.0 in land plot auctions? What it may take?
L.A.: This auction is the biggest issue. First of all, the credit goes to the Geocadaster team and the deputy minister for agricultural policy, Maxim Martynyuk. We’ve been working and re-designing the system for the auction for several months. It was successfully held September 2. There’s total technical and administrative readiness to introduce amendments to the Land Code, so now it’s up to the central authorities. The auction here is a part of a big reform that may catapult Ukraine’s economy.
FL: By the way, do you intend to integrate blockchain in the land plot cadaster as well? When will it happen and what may Ukrainian citizens gain from it? What obstacles do you see here?
L.A.: In my opinion, the auction’s and the community’s greatest merit is in making the word “blockchain” megapopular in government over the course of a year. Back when we started, I wouldn’t have believed that in eight months’ time a government official would be asking me about consensus mechanisms and problems of legal recognition of public blockchain. The process is irreversible, and in some time, the cadaster, the ledgers, the procurements – all of it will be based on blockchain.
FL: What are the IDF’s plans for cooperating with Ukrainian authorities in reforming government services with decentralized tech? What’s your vision of Ukraine’s future public services?
L.A.: We are actively working on spreading distributed solutions in the government sector. Our main objective is to build a fully decentralized ecosystem, including finance, and to offer a new model on the global scale. Blockchain may provide fundamental stability to all these areas. It makes us confident that the world around and the business climate won’t change as some officials come and go. It draws nearer the moment we forget there are any.