Bot, blockchain and smart-contracts: interview with fintech-hackathon winner BANKEX

Over the course of 24 hours during the hackathon, the BANKEX team has gone through every stage of product development: from receiving the direction and objectives, formulating an idea all the way to the creation of a functional prototype. The project went through five stages of evaluation: evaluation of the code, presentation, pitch, bot performance and, finally, evaluation of a blockchain-solution deployed on Microsoft Azure. As told by Dmitry Dolgov, the captain of the winning team and CTO of BANKEX.

About the InspiRussia hackathon

The first Russian blockchain hachathon InsiRussia took place from August 17th to August 18th 2016. It was organized by the Life.Sreda fund. The organizers of the hackathon defined a focus for it — the search for answers to all the most current issues of fintech: chatbots for financial services, blockchain, internet-lending, payment with no bank dealers. InspiRussia’s partners were Microsoft, ISimpleLab and Qiwi.

Around 300 people with 50 applications took part in the hackathon. 29 ready projects reached the finals. InspiRussia became the largest hackathon in Russia by sheer quantity of participants.

The winning project was ByByBank_bot by the BANKEX team.

— What kind of idea did you come to the hackathon with?

— We came to the hackathon, representing the needs of banks. As a first step, a tech-support bot can be created to satisfy banks’ demands. We have been on this market for a long time, and it’s clear at which stage of the interaction a bot needs to be introduced, in order to optimize a bank’s processes. Microsoft in particular is attractive and provides several useful platforms to this end: Bot Framework and Microsoft Azure for the Ethereum blockchain.

But we also knew it would be more interesting to do something with blockchain. Prior to the 24 hours of development we had, I got to hear the words from Constantine Goldstein from Microsoft, which inspired me: “I can see a very interesting scenario: I address a financial bot, which in the meantime launches a smart-contract. It would be interesting to see which one of you ends up realizing this.” So that’s the idea we decided to work with at the hackathon.

— What can ByByBank-bot do?

— Using the bot a user can publish their offer, placing it based on defined parameters — headline, description, location, image and price. After that, the trade offer is added into the bot’s database, published and it becomes viewable for potential buyers. The bot’s database is based on blockchain and so it documents all events.

The offer is formed as an attractive card, an image. Buyers browse these cards with offers using the buyer bot, with a game-like mechanic — clicking left/right or buying. After a buyer finds an offer that interests them, they may click “Buy”, and this event too is documented on the blockchain, initiating the start of a deal.

It’s not really our concern how the trade of a good or service is performed between the seller and buyer. What we do, is we wait for a confirmation from the buyer, signaling us that he is satisfied with the received offer and is ready to conduct payment. The buyer clicks the confirmation button in the very same bot. After the buyer confirms closing of the deal, a new event is documented on the blockchain: this allows us to initiate the process of money transfer to the seller. So we have a sale-purchase deal as a result.

— How applicable is the solution in the real world at this time?

— Naturally it’s a somewhat “raw” solution: we spent only 24 hours to build it from the ground up, but it is already usable. All the mechanics work, so that leaves solving the participant KYC issue and to implement processing, meaning transfer of funds from seller to buyer.

Today everyone talks about “uberization of the service market”, which means removing unnecessary middlemen between buyers and sellers. We believe that we can give any person the opportunity for self-realization. Just as you can find someone to talk to on any topic in a number of messengers, you would be able to find a person who would purchase your product, information or service — thus allowing you to self-realize in the world.

How can this case be adapted to existing business demands?

— Carrying out p2p-deals is already viable and functional for a number of smaller service markets, such as taxi (Uber), mobile programming (Apple), renting living space (Airbnb). The matter of digitizing p2p-deals in other fields is just a matter of time.

How is blockchain integrated into the function of this product and what role does it play?

— What we made is essentially the first prototype for practical implementation of blockchain records to conduct deals between seller and buyer, where the offer and demand validation factor is a record on the blockchain alone. Nothing else (save, perhaps, a Telegram ID) is known by the buyer about the seller or vice versa. In terms of scaling and adoption of the system one thing needs to be considered: large systems can only be built with minimum verification info required for its elements. A deal schematic as simple as ours, based on bots and blockchain, allows you to do just that.

Does use of Ethereum and Azure cause any conflicts?

— On the contrary, these technologies complement one another. In fact, the existing ties between them are precisely the factor that allowed us to build our prototype on such short notice. It allows creation of products on something you could call “blockchain 3.0”, meaning a system integrating blockchain records, smart-contracts and records from off-chain database systems.