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Blockchain in Horizon

After the Bitcoin appearance in 2009, governments and research institutes around the world gradually turned their attention to technology and, since 2013, began to fund research and development projects to further advance and evaluate its potential in regional economies.

Among the major financial players using the subsidy instrument, the European Union comes out on top. The EU is known for its various targeted structural funds (http://ec.europa.eu/regional_policy/en/funding).

However, in the field of promoting science and innovation on the continent, Horizon 2020 gained popularity as the largest research and innovation program in the EU, with a total budget of 80 billion Euros (https://ec.europa.eu/programmes/horizon2020). Some part of the Horizon 2020 budget in 2017 has already been allocated for research and development of the leading technology Blockchain.

I can state that such a cumbersome bureaucratic machine of the EU budget policy rather quickly in 2017 made the appropriate adjustments in terms of the development of grant programs for the development of blockchain technology. The speed of such a reaction to changes in funding priorities (after all, the main budget of the Horizon 2020 program was adopted in 2013, when the EU did not know about the blockchain at the state level) that even a snob like the EU sees potential in the technology itself and builds direct prospects for its implementation both in the field of public administration and monitoring, and in business, and in the social aspects of the inhabitants of the EU.

The overall goal of Horizon 2020 is to ensure that Europe produces world-class science, removes obstacles to innovation, and facilitates a collaborative process in the public and private sectors for innovation. By combining research and innovation, Horizon 2020 helps foster economic development and create jobs with an emphasis on excellence in science, industry leadership and the solution of social problems.

As for the blockchain itself, the EU has already invested almost 6 million euros in 2017 in startups, which connect their business with blockchain technology. According to publicly available information, there are six such startups. They are developing and exploring the use of the blockchain for subsidized investments attracted through the Horizon 2020 innovation program. And now a few words about what has already been done in 2017.

Horizon 2020 is the largest project in the history of financing and supporting innovative research in the EU in the period from 2014 to 2020. The Small and Medium Enterprises Group (SME), a member of the European Commission, announced the details of the activities of three companies at the beginning of September:

· The Billon Group

· Authenteq

· Signaturit

These are all startups whose research priority has been declared as security and identity of payments. According to data provided by the European Union, under the Horizon 2020 program, six business projects received a total of 5,471,131 euros. The above companies are more than 1 million euros each.

In 2017, the following blockchain projects were also financed:

· D-CENT, decentralized citizen engagement technologies, design of social digital currency;

· DECODE — a plan of the virtual machine Smart Contracts for the implementation of a decentralized ecosystem of citizen data;

· PIE NEWS, a social digital innovation to address poverty, lack of income and unemployment.

In August 2017, EU representatives announced plans to create a “Blockchains for Social Good” contest, which would work together with Horizon 2020. “Blockchains for Social Good” is a project dedicated to using blockchain technologies to solve acute social and environmental issues. The researchers also dealt with the financing of business projects related to cryptocurrency.

In early 2017, the EU set about preparing the ground for Blockchain Observatory, a platform for promoting and further researching technology. The main requirement is transparency. EU citizens must understand all administrative and production processes. The priority will be considered the use of the blockchain.

In February 2018, Valdis Dombrovskis (Vice-President of the European Commission and European Commissioner for the Euro and Social Dialogue in the Commission of Jean-Claude Juncker) (http://europa.eu/rapid/press-release_IP-18-521_en.htm) said that the Commission wants to create a Financially Transparent Gateway to allow commercial and national databases to collate information. Legal entities and individuals from both the European Union and other countries can participate in the competition. Registration of participants will take place until the middle of 2019, and the winner will be determined in 2020. Examples of funded blockchain projects in 2017:

Polish blockchain start up “Billon” received a grant of 2 million Euros in the framework of the Horizon 2020 program to study the use of the alternative payment market. The company stated that it received a grant on the basis that its distributed accounting technology (DLT) could use an alternative payment market.

The project specifics are the first cloud and mobile peer-to-peer solution for everyday currencies using DLT, where the project product offers partnerships with banks for PLN and GBP.

Billon is now beyond the scope of solutions so that consumers pay for services with digital currencies and participants can spend their digital and fiat money online. The funding provided will be used to expand the blockchain technology beyond urgent corporate payments, support the launch of e-commerce and content solutions and provide additional investments in sales, marketing, compliance and operation.

Today’s payment solutions include clumsy prepaid vouchers and premium SMS, and Billon can turn it into a digital form of payment on a mobile phone and with a full audit. Based on the company’s successful testing, the management said that it plans to launch commercial e-commerce and content monetization services in the autumn 2018 in Poland, and in the UK in 2019. Then the company will start looking for possible entries to emerging global markets.

Signaturit is an electronic signature service that guarantees 100% legal force in commercial digital transactions. This is supposed to minimize the risk of cybercrime and increase productivity. For delivery, Signaturit adds biometric and blocking encryption to ensure cybersecurity in email transactions. He argues that smart contracts will improve productivity. Signaturit received € 1.22 million in the SME Instrument 2 phase.

Authenteq has developed an online authentication service (Authenteq ID) that is automated and protected from unauthorized access for smartphones. It uses multifactorial biometric authentication. The project aims to meet the needs of online / mobile markets. These include KYC (Know Your Customer), as well as other services that require or can use ID verification, for example, bets, games, and even dating sites. To do this, the identifier Authenteq, which received 50 000 euros in the form of financing within the framework of the stage SME Instrument 1 phase combines:

· an application for smartphones, where the end user creates his certified ID by scanning a passport and engaging in self-service

· backend-proprietary services that perform face recognition

· image analysis of security elements ID

· third-party security checks

· blockchain for verification purposes (presumably impossible to redesign and crack).

Also, the project team said that in 2018, according to the results of the SME1 research grant, it will apply for the SME2 phase.

An example of a project funded by the EU that goes to ICO

This project uses several project products and their technologies that have been tested and funded by the EU and its Horizon 2020 program. Using these technologies, Yetta Blockchain offers significant improvements over Bitcoin and Ethereum with its Tier-3 network node architecture and Blockchain consensus algorithm under called Proof of Trust (PoT).

Other improvements include several types of wallets, three levels of irreversibility, encryption with multiple signatures (CypherSig) and a hundred-fold jump in scalability and transaction speed.

Yetta plans to release Yetta Blockchain and the Yetta virtual machine based on the OC DECODE. The goal of the ICO project, Yetta, is to raise funds for the transfer of existing EU-funded technologies from the laboratory to the real world and to support the development, development and implementation of intelligent contractual innovations.

Now I think it is worthwhile to briefly talk about the blockchain contests for 2018 and 2019. The following information will be based on data from the press conference (https://webcast.ec.europa.eu/19-12-2017-horizon-2020-blockchain-and-distributed-ledger-technologies-topics ).

In addition to the hype around the cryptoindustry, this technology is still at the stage of maturation, and in order to facilitate the perception there is a need for innovation, research, development, piloting and proof of the concepts for existence. It is for this reason that the various themes of the Horizon 2020 work program for 2018–2020 relate to the Blockchain and consider DLT.

Coordination activities in Fintech will also be supported in 2018 by this program. Since 2017, the EU under the Horizon 2020 program has already allocated 83 million euros for grants. And the plans for the budget years from 2018 to 2020 for the blockchain projects under the Horizon 2020 EU can allocate up to 340 million euros.

List of grant competitions where the blockchain is already supported by the EU budget:

At the moment the action is closed, but it will be open again for 2019. Grant format — RIA (Research and Innovation action). The size of grants from 3 to 5 million euros. The proposals should consider one of the following two areas using the blockchain:

1) Advanced technologies combining Security, IoT, Cloud and Big data for a hyper-connected society

2) Interoperable technologies of IoT devices/platforms in the context of Smart Cities

At the moment, the action is open until March 28, 2019. Grant format — IA (Innovation action) and CSA (Coordination and support action). Grants of up to 3 million euros. The proposals should consider one of the following two areas using the blockchain:

1) Innovation Action: Digital Learning Incubator (format IA)

2) Coordination and support action in the area of Digital Learning (format CSA)

At the moment, the action is closed, but it will be open again for 2019, you should follow the announcements. Grant format — CSA (Coordination and support action). The size of grants up to 50 thousand euros. The Action will be a piloting scheme for the uptake of DLTs by SMEs. It will aim at testing in real conditions the opportunities, challenges, risks and necessary conditions associated with DLTs in different context and sectors. Thereby it will stimulate:

· the uptake of DLTs by SMEs and inspire others to follow, and equally

· it will sensitize intermediaries to develop their expertise in this respect and

· it will help draw lessons for policy makers and regulators.

At the moment, the action is open until November 14, 2018. In 2019 and 2020 will also be held. Grant format — PCP (Pre-Commercial Procurement).

The main objective and priorities of this grant are mainly focused on providing support to health care providers to ensure the development, testing and implementation of digital services and communication concepts that can facilitate the transition to integrated health care models in health and social services and intersectoral settings for specific countries, including decentralized procurement and inter-agency cooperation.

Earlier we talked a little about it in this article, now more details. The action is open until September 3, 2019. The format is IPr (Inducement Prize). The action should find people who have new solutions to public and social issues. Thus, the blockchain technology should provide increased transparency and decentralization. The action page states that the winning project must have a real social impact, be decentralized, at the same time completely transparent, as well as useful and scalable.

The Commission expects the use of distributed registry technology (DLT). The priority will be considered the use of the blockchain. The Commission wants to create a Financially Transparent Gateway to allow commercial and national databases to collate information. Legal entities and individuals from both the European Union and other countries can participate in the action. Registration of participants will take place until the middle of 2019, and the winner will be determined in 2020.

At the moment, the action is closed, but it will be open again for 2019, you should follow the announcements. Grant format — CSA (Coordination and support action). The goal of the action is to strengthen the role of “Fintech” as it is on the merging of various digital technologies, financial areas and business, with many startups and scalable offers on the DLT. The challenge is to increase the role of Europe in Fintech so that European startups can scale better across Europe and globally. In this context, projects are particularly relevant, where the promotion of interaction between innovators, supervisors and regulatory authorities is a priority.

At the moment, the action is closed, but it will be open again for 2019/2020, it is worth following the announcements. Grant format — RIA (Research and Innovation action), IA (Innovation action), CSA (Coordination and support action). The size of grants is from 1 million euros to 5 million euros. The proposals should consider one of the following areas using the blockchain:

1) Content verification

2) Secure Data Ecosystem

3) Support of new Social Media initiatives on blockchain

4) Support of Social Media ecosystem community building

At the moment, the action is closed, but it will be open again for 2019/2020, it is worth following the announcements. Grant format — CSA (Coordination and support action). Grant up to 1.5 million euros. The main goal of the grant is to develop a broad consensus on a person-centered IoT evolution strategy that improves usability, in particular by enhancing security, privacy and user confidence by developing the concept of a technology cluster using IoT benefits.

At the moment, the action is open until November 14, 2018. In 2019 and 2020 will also be held. Grant format — IA (Innovation action). The grant budget is up to 30 million euros. The goal of the competition is to use IoT reference architecture models that allow combining services for home and office comfort and energy management based on platforms that integrate relevant digital technologies such as IoT, AI, cloud and large data services and, where applicable, in combination with blockchain technology.

At the moment, the action is open until March 28, 2019. Grant format — RIA (Research and Innovation action). The grant budget is from 300 thousand euros up to 3 million euros. The main objective of the grant is to attract the best modern Internet innovators to address technological opportunities arising from cross-references and achievements in various fields of research, from network infrastructures to platforms, from applications to social innovations. In addition to research, the scope includes validation and testing of market-based products with minimal viable products and services, new economic, mobile, and social models and in the early stages include users and market participants.

At the moment, the action is active until September 12, 2019. Grant format — RIA (Research and Innovation action). The budget of grant projects — from 3 million euros to 7 million euros. The goals of the action are to find the most unique logistics proposals and concepts based on taking advantage of new technologies and their combination, like the blockchain, Industry 4.0, 5G, 3D printing, unmanned aerial vehicles (UAV’s), vehicle automation or new business models such as “crowdshipping” and circular models of the economy that will affect the global freight transport, its optimization and the ecological footprint, which needs to be better understood.

All of this should be aimed at finding and presenting the best and most effective model of a decision support system aimed at helping public authorities and private companies to identify the most likely scenarios and promote a higher level of cooperation between various stakeholders in the field of global logistics and transport.

At the moment, the action is active until March 14, 2019. Grant format — RIA (Research and Innovation action). The project budget ranges from 3 million to 4 million euros. The action goal — the use of disruptive technologies (such as block-chain, big data analytics, Internet of Things, virtual reality, augmented reality, artificial intelligence, algorithmic techniques, simulations and gamification) in public administrations, public goods, public governance, public engagement, public-private partnerships, public third sector partnerships and policy impact assessment is growing and can be very beneficial.

As a result, deploying these disruptive technologies in public administration requires a thorough assessment of their potential impact, benefits and risks for the delivery of public goods. Proposals should pilot the technology and should engage multidisciplinary partners, stakeholders and users to examine how emerging technologies can impact the public sector and explore in a wide-ranging fashion the issues surrounding the use of these technologies in the public sector. Proposals should also lead to the development of business plans that would ensure the long-term sustainability of the services offered based on the used technology.

It is not enough to consider in details all the features of various grants within the Horizon 2020 regarding the blockchain promotion in one article.

However, my goal is, in addition to ICO, as a source of funding for your start-ups, to show other instruments for financing venture technology projects on the example of EU granting for blockchain ideas.

In the next article I will consider the following features of Horizon 2020 as formats and types of grants, participation criteria and selection methods, as well as features of blockchain project participation in a SME instrument (EIC-SMEInst-2018–2020) for small and medium businesses.

Sergiy Golubyev (Сергей Голубев)

EU structural funds, ICO projects, NGO & investment projects, project management, comprehensive support for business

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Sergey Golubev (Сергей Голубев)

Crynet.io (project manager), vtorov.tech (expert), ICO/STO/IEO, venture & marketing projects, NGO & investment projects