What happened at the blockchain conference in Kyiv?

On September 19, the Blockchain & Bitcoin Conference Kyiv took place in Kyiv. The pressing problems of the crypto business were discussed on several thematic platforms. The speakers covered the hottest issues of regulation of the digital market, tokenization, and expressed opinions on the prospects of cryptocurrencies and blockchain.

Our colleagues attended the conference and noted that the level of speakers this time was very high. 

These were experts from Ukraine and abroad, founders of successful startups, financial analysts, representatives of regulators.

In our review we will note several speakers whose speeches were non-banal and filled with meaning.

Alexey Mushak, People's Deputy of Ukraine

He was the first to register a bill on cryptocurrencies in the Verkhovna Rada. I used to do mining myself. His bill has already been put on the agenda and considered in committees.

Our bill is primarily about citizens. There are many smart people in our country, but they are leaving the country. Our task is to make sure they stay. First, it is necessary to guarantee the security of participants in the crypto industry, both physical and financial. The second is to build a bridge between the crypto industry and the financial sector, because this is interaction with banks.
In the bill, we tried to clearly distinguish where the state can interfere in business and where it cannot. When crypto goes into fiat, the state controls it. The state should not interfere in all other actions. The second is taxation. Now for individuals there is a rate of 19.5%, although, of course, no one pays them. We want to make a preferential rate of 5% until 2024. Pay this money and no one will accuse you of anything.
The position on mining is the same - 5% of profits are taxed. Everything is very simple - you count income, expenses, and the difference is taxed.

Alexey noted that almost all countries have different approaches to this problem. Until the world has formed a clear, unified position, Ukraine must determine its own temporary rules. Because sooner or later rules will appear and they will be imposed on all countries, whether we want it or not.

Definitely, the panel discussion “Implementation of Blockchain in Ukraine” between Georgian and Ukrainian blockchain practitioners.

Georgiy Gigishvili, CMO Bitfury Group

According to a recent survey, 43% of citizens from around the world do not trust government agencies. According to Georgy, the situation can be saved by using a distributed registry.. The use of blockchain can help in areas where there is at least a minimal possibility of data manipulation. 

But the main obstacle to implementation is the fashion for blockchain. People are tired of hearing that some blockchain will come and solve all our problems. Supposedly you can screw it anywhere and it will do everything itself. You need to be more careful when using it. 

Konstantin Yarmolenko, Advisor to the Chairman of the State. Agency for Electronic Governance of Ukraine. Member of the Board of Directors of the Bitcoin Foundation Ukraine

There is such a thing as the shadow economy. If we introduce electronic services and blockchain, then people, accordingly, do not pay bribes. In total, every year Ukrainians spend about $1 billion on bribes and kickbacks. After the implementation of blockchain, this money will remain in the pockets of Ukrainians. Blockchain will ensure the immutability of information. That is, the official will no longer be able to manipulate the data, and the hacker will not be able to hack and violate it.

Viktor Veshnev, General Director of the State Enterprise "SETAM" OpenMarket

The introduction of blockchain will change the situation in terms of citizens' trust in the state. This is the main goal of Ukraine since independence. But there is a hindrance to this process - legislation that was written when electronic technologies and services were not yet in sight. And today the rate of change in laws is very low. They do not keep up with technological progress.

Vakhtang Bokhashvili, Head of Administrative Proceedings in the Legal Department of the National Public Registry Agency of Georgia

Before the implementation of blockchain, Georgia faced two main problems - distrust and misunderstanding of why it is needed, as well as legal problems. All procedures were described in old laws, so they needed to be changed urgently.

Georgia has a leading position in the transparency of public administration. The country is also in the top five of the Doing Business ranking. It was not easy to come to this - careful work was carried out with the government, with business representatives, and the private sector. We had to explain a lot to overcome the fear of introducing new technologies.

NAPR was created in 2004, when we had massive corruption.. There was a lot of paper documentation, a lot of old recorders who worked according to old customs. But since that time we have carried out various reforms: administrative, technological, legal. And the situation has changed.
We live in the fourth era of the information revolution and are faced with a new reality, when the physical world is very connected with the digital one. First of all, this is decentralization in four directions: communication, smart contracts, industry and finance.

Georgia is the first post-Soviet country to begin implementing blockchain in government services. Bitfury is in many ways the driving force behind this process. 

The first phase began in 2016 by entering extracts from the real estate register into the blockchain network. How does this work? After registration, the register creates an extract stating that the person is the owner of the property. There are separate servers where all this information is stored. After registration, the statement is shown online on the NAPR website. Currently, more than 1.5 million real estate statements have been entered into the system. Each statement has its own unique code. If the code on the website and on the blockchain are identical, then the extract is valid. 

The second stage, which NAPR is currently working on, is the preparatory stage for smart contracts - trust contracts. This is a non-classical form of contracts. There are three participants: the registration service itself, the blockchain intermediary firm, and the bank. When a purchase and sale transaction is carried out, a problematic question arises - when to pay the money? Neither side considers itself completely protected. The trust contract system will help increase trust between the parties to the transaction. How will it work? A special account will be created at the bank into which the buyer deposits money. If registration is completed, the money will be transferred. If there is a refusal, the money will be returned to the buyer. As you know, the smart contract system guarantees that intermediaries - notaries and justice houses - will no longer be needed to complete a transaction. The system will automatically check data that is important for contracts. When all information has been verified, registration will end and the money will be transferred. 

Georgia uses the Bitcoin blockchain and will not create its own blockchain and separate cryptocurrency.. 

Igor Porokh, trader and analyst at iTuber

Let's talk about one player who in 2013 made everyone pay attention to the digital market, cryptography and Bitcoin in general. The player who raised everyone to $1200, and then took everyone to $170. Two years later, the same player drove everyone to the $20 thousand level. This player is the market. No matter how much you want to play against him, nothing will happen. I came up with a formula that the one who understands the market better than others makes the most money. Everyone knows that only 5-10% make money in financial markets. Because these people understand the very meaning of the functioning of the market. 
If someone wants to make money quickly, it won’t be possible in the next six months. There will be no hype for '17. At least based on the current situation. There is nothing visible on the horizon. 

Igor spoke about typical traps that inexperienced traders fall into

• Greed. If you make money, sell

• Rally. You'll never make it to the rally. If I don’t understand something, I don’t sell it

• Leaving train. When they try to jump quickly. It’s better to let go of the train if you don’t understand why a certain coin has grown

• FOMO - lost profit syndrome

• PUMP. A sharp jump in coins, unjustified, and an equally sharp fall. Those who create pumps and those around them earn money. The rest lose their money

Stanislav Podyachev, managing partner of Blockchain Lab

 Talked at the Blockchain and Bitcoin conference Kiev about the third generation cryptocurrency. According to Stanislav, the coin of the first generation is Bitcoin, which solves the problem of how to transfer value without intermediaries, followed by ether, which offers the ability to enter contracts into blockchain services, and the coin of the third generation should be considered the EOS cryptocurrency, which provides an unlimited number of transactions per second with virtually no commissions. 

What makes EOS different from Bitcoin and Ethereum? 

EOS has three branches of government, the legislative (token holders) which can make and change the constitution, the executive (block producers) where you can vote for the block producer, process transactions and earn money, and the arbitrators (ECAF).. For example, if your funds are stolen, you go to ECAF, and it freezes the funds in the account where they were transferred. However, as of 09/02/18, ECAF processed only 8 cases. A system where it is not the code that decides, but a group of people, is doomed to criticism, and that’s normal. The most interesting of the disputes are requests from interested parties about the correctness of data in the EOS blockchain. You need some kind of document confirming the transaction. But the company does not resolve disputes; lawyers are involved here, who further examine the case and earn money from it.

There is also such a thing as a Ricardian contract. A smart contract is complex for the average person, the Ricardian contract is understandable to both man and machine, it is a template from which you can create an individual contract.

Tone Vays, content creator, trader, Blockchain/Bitcoin consultant (worked on Wall Street for 10 years)

Drew a clear parallel between the dot-com bubble and the current situation in the crypto market.

What happened before and what are we repeating?

             The ICO bubble is very similar to the dot-com bubble. When this bubble burst, it took 15 years to recover.

One of the first IPOs to hit the market it was the IPO of Yahoo in 96, which earned 50% on the first day. It was 33 dollars per share, now it is 1.38 including splits. Amazon in 97 earned 31% (23.50 - 1.50). Then in 98 the crisis began and The globe.com company earned 600% in a day. The company promised that each person would have their own Internet. It was supposed to come out to 9 dollars, but it came out to 63 and by the end of the day it was even 97 dollars. Everyone who started this company immediately became millionaires, owning 100 million each. Even the website designer earned 10 million. Two years later, this company was shut down with noisy legal proceedings. After this there was the company VA Linux, which produced Linux computers, on the first day it raised 700% on shares, then it planned 30, but received $300, and three years later its shares cost $7. There was also a company called Cyber ​​rebate, I myself used its services. They offered to buy a display player for $20 for $200, and then get all $200 back by the end of the month. And everyone thought that this strategy would work well, that it was a cool idea... The company ended up owing 10 people 100 thousand, and some paid back 9 cents on the dollar.

What happened before is still happening now. Companies add the word “blockchain” or similar fancy words to their name without any reason, and their shares skyrocket in price, even if they are not connected to any blockchain in any way. Or else companies make a loud announcement that they are going to launch an ICO, and their shares jump sharply. Therefore, you should be extremely careful in choosing an investment object and be guided only by cold reason when you are offered fast, high and guaranteed profits.