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bne June 2017 Companies & Markets I 19
bne:FinTech
Bitfury and Ukraine finalising e-government blockchain projects
Nicholas Watson in Prague
Ukraine’s Euromaidan revolution in 2014 was a cry from the people to have a “government of the people, by the people, for the people”, so it’s fitting that this Eastern European country is about to become the first in
the world to realise the full potential of blockchain technol- ogy to revolutionise the way that government works.
The Bitfury Group, a global company that is a leader in providing technological solutions based on blockchain, the underlying technology that powers cryptocurren- cies like bitcoin, tells bne IntelliNews that it’s working with Ukraine on finalising the timeline for rolling out the first full-scale “Blockchain eGovernance program” – a memorandum for which was signed by the two sides on April 13 – which will look to put a sweeping range of government data and services on blockchain systems.
“We believe we have identified suitable pilot projects that will demonstrate the transformative power and unmatched secu- rity of our blockchain solutions, and we are looking forward to our partnership with the government of Ukraine,” Valery Vavilov, CEO and co-founder of Bitfury, tells bne IntelliNews.
The fundamental principles behind blockchain technol- ogy explain its attraction to countries like Ukraine that are looking to make government and the services it provides more transparent and secure. A blockchain is essentially a “distributed ledger” showing all the members of a particu- lar network every transaction that was verified on it. The transactions are collected in blocks, which are then secured approximately every 10 minutes in a mathematical process called “mining”, and must be verified by other members in the network before they are confirmed. Given no central authority or potentially malicious third party can tamper with it, experts believe everything from land registries, to stock markets to financial services could use this technol- ogy to limit fraud and corruption, improve efficiency and maximize economic benefits to a broader section of society.
The Bitfury Group CEO Valery Vavilov (left), with head of the State Agency for eGovernance of Ukraine Oleksandr Ryzhenko (right).
Vavilov says Bitfury and the Ukrainian government are looking at a number of areas and government services in which block- chain solutions could “enhance security and improve the lives of the people of Ukraine”, such as digital platforms like state reg- isters, public services, social security, public health and energy. “Given our successful pilot program in the Republic of Georgia, where we successfully began the move to register land titles
on the blockchain, we are considering that as well,” he adds.
Bitfury began working on a project with Georgia’s National Agency of Public Registry in 2016 to design and pilot
a blockchain land titling project. Renowned Peruvian economist and president of the Institute of Liberty and Democracy (ILD) Hernando de Soto, who is advising on
“By embracing blockchain technology, the governments of Ukraine and Georgia are making clear that they are ahead of the curve”
the project, has said that proper land titling on blockchains could help save globalisation by allowing much of human- ity to participate effectively in their national economies.
Vavilov compares what these two former Soviet states are doing with blockchain to what many countries in emerg- ing countries did in telecommunications. “By being among the first governments to embrace and implement this technology, countries like Ukraine and Georgia are posi- tioning themselves to leapfrog other advanced nations, like many African nations did when they skipped broad- band and moved directly to mobile digital,” he says. “By
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