Universa Blockchain AMA with Borodich write-up
The article originally published on blockchainstories.com: https://www.blockchainstories.com/2018/10/17/universa-blockchain-ama-with-borodich-write-up/
The Universa community has been waiting a long time for this moment: the AMA with the CEO of Universa Blockchain, Alexander Borodich. In this article you can learn all the answers from the original video published on Facebook. Be prepared, there’s a lot of text. But it’s definitely worth it! Stay up to date with the help of our Dutch community at Telegram and Facebook.
Dutch: Er was veel vraag naar een uitgeschreven versie van de video van Borodich. Bij wijze van experiment doen we dit in het Engels. Mocht je vragen hebben over Universa, kom eens langs bij ons op Telegram of op Facebook.
Please tell us about your first customers. Who are they, and what are the expected deadlines for the projects to go live? What cases are the most demanding ones?
“You have to understand that our customers are the government of Malaysia, Kazakhstan, Russia and commercial companies, which we would be talking about later. Deal making process with these clients can take a long time — it can be anywhere from six to twelve months. Now we will be talking about the projects that are currently in the works, for which some results can be observed. When we announce that we have signed a contract with say, the Ministry of Trade of Malaysia, the important thing for us is that we have started working. We understand that completing this project would take months, if not years. But it’s not a problem if works are being done, and the project is moving forward, and at some point, we will see the project completed. We use three simple indicators to assess our programs: we have the number of customers, which turns into the number of signed contracts, which turns into Universa earnings in one region or another. I guess you will agree that these metrics are quite reasonable to work with.
Four key areas
There are four key areas that Universa is pursuing today. The first one is Smart Government. Here we are working with Russia, Kazakhstan, Malaysia, Bahrein, Lichtenstein and Tunisia. This Smart Government work results in specific contracts to implement specific public administration services. The second direction is Smart Cities. This is a big segment, because if we can implement a standard platform here, similar to Dashboard, AppStore, to automate municipal services via blockchain and let it control all the space, lighting, traffic lights, parking lots, charging stations and public transportation via blockchain in a single city, then our target audience will basically include all cities in the world.
“WE ARE RUNNING PILOT PROJECTS WITH SEVERAL CITIES”
Right now, we are running pilot projects with several cities, where we try to implement the minimum feature set for now — control lighting infrastructure, connecting various smart sensors for utility services measurement purposes. The third direction is Smart Factories. Imagine the situation: your production machines appear in the cloud, and you can send a job to any machine, like instruct a turning bench to make a certain part. This part will be produced and delivered to you by a logistic company. You probably don’t know and don’t care where that turning bench is located physically. The possibility of hooking up and using underutilized capacity in factories is another big segment in which we are working with a number of industrial enterprises, mainly in Russia, Kazakhstan and Mongolia for now. Finally, the fourth direction is Smart Money. This is something you have heard a lot about in our press releases. This includes working with the Ministry of Trade of Malaysia to issue social money which cannot be spent for alcohol and cigarettes. This also includes budget digitalization works and funds usage monitoring.
“WHEN A PRODUCT GOES LIVE FOR ONE PLACE WE CAN USE IT IN ALL COUNTRIES AROUND THE WORLD”
Smart Government, Smart Cities, Smart Factories and Smart Money are the four areas in which we basically operate. Within these four segments, we have more than a hundred leads, which ideally should be converted to pilots, and pilots should be converted to contracts. Respectively, our basic accounting in the Universa company is based on the prospective sales we can get with more than a hundred of prospective customers that are being converted now to ongoing pilot projects, which should transform into specific sales and contracts at the end of the reporting period. But is important to understand that we are working with large corporations and even with governments, where deal making lasts many months, or even up to several years in some cases. We are not afraid of this; we do understand that the moment these contracts go into devising we can report about them and we can upscale what we’ve done for one state to all 188 countries of the world or apply what we’ve done in one city to all cities in the future world.
Alexander, can you tell us about the project’s marketing strategy?
“This is probably the hardest question for us, as you curse us all the time for running separate marketing campaigns for our clients, for large corporations, government and banks, and a separate marketing campaign for you, the consumers, who are probably more interested in the token economy than the offline contracts blockchain technology development is based on. Perhaps at some point we will be able to bring these two processes together, so they are conducted side by side in harmony; for now, we have either one or the other lagging. Last year we focused on the token economy; this year we focus more on a set of business cases, pilot projects and implementations of the blockchain technology. Therefore, most of our work is now related to attending industry and technology exhibitions and working with specific clients at these events.
“WE CURRENTLY AIM OUR MARKETING AT COMPANIES TO GET THEM ON BOARD”
Remember Innoprom, where our team of twelve spent three days talking to more than a hundred potential users of the blockchain technology. This included factories and technology enterprises. If we want to sign contracts with all these companies, we must contact them all, to talk to them and to bring our pilot projects forward. This is what most of our marketing activities are aimed at. And a separate part of our marketing effort is the so-called future marketing, something that can give us some future copy-protected competitive advantage. That involves working with governments and smart cities. There aren’t too many technologies in the world that can digitalize the government as a customer, digitalize the city and build a platform that controls all the digital services in the city. Respectively, our marketing efforts are aimed at bringing as many governments as possible to use the service, to try this technology to build even more smart cities.”
Can you list three main challenges, technical or operational, that you had to overcome over the past three months?
Well, the first important thing to mention is probably the fact that we don’t always fall into the schedules we announced and don’t keep our timing straight. Sometimes we expect certain tasks to be accomplished within a month, and then it turns out that it needs three times the effort and three times the time, so we drop two, three or even four weeks behind the product development schedule. Is this a challenge? Of course, it is. Can we try to do better? Well, we will try. But it is important to understand that developing software the likes of which one has written before is a challenge and is hard to estimate. Of course, we do get what we expected internally, give or take, but we don’t always fall within the plans we declared. This is probably the first challenge.
The second challenge is team growth. The thing is, if we want to develop our project, we need people that are closely familiar with the blockchain technology. Do you know a lot of people like that? I don’t. You see, there aren’t too many people anywhere in the world who understand the blockchain technology well and are capable of implementing, using, applying, marketing and developing it. And this is a challenge, too. So, how do you address it? The solution is obvious — you need to teach people about what blockchain is, what smart contracts are and how these smart contracts can be used to automate their enterprises. In fact, at some point we will have to launch our digital University — which you may have seen in our plans — and deliver training on blockchain technology, certify engineers and teach these engineers to write smart contracts in Universa. This is the second challenge.
And finally, the third challenge is regulatory environment. If some of its aspects, blockchain, as any new phenomenon, goes strongly against the existing regulations in many countries which were developed some 70–80 years ago. Here is a very simple example. Let’s take some of our competitors, say, Ethereum. You can record your personal data in the Ethereum blockchain, this way you violate personal data regulations. Now try deleting your personal data from Ethereum. You will be surprised to learn that information on the blockchain cannot be deleted. But you have to delete it, as the law says someone, somewhere in the world, has to delete it at your request. But this is impossible. What should you do in this case? I don’t know.
You have in the past stated that you want to reach the 5th place in the crypto market. Can you tell us how Universa stands out from its competitors specializing in the use of smart contracts? Do you still think that the goal is achievable today with all the other competitors on the market?
Reaching the 5th place in capitalization, according to coinmarketcap, as far as I understand your question. Yes, I think that goal is feasible, and here is why. Just take a look at Ripple’s explosive capitalization growth. Ripple is a very primitive payment unit. Its only consumers are banks that use Ripple for interbank payments. Nevertheless, this was enough to prompt Ripple into the top 5. Now for the position ourselves as a pipe, which can be used for Ripple, as well as any digital assets. Look at hypertokens for example, hyperBitcoin, hyperEthereum etc. If you are a big fan of crypto economy, digital gold and other stable digital currencies, we are planning to launch into production shortly, you will be able to use these. Universa is a bus, a pipe that can take any digital assets. All sorts of digital contracts, all sorts of municipal and national government automation will flow through a single pipe — this is something bigger and much more substantial than, say, Ripple. Do I believe we can reach the same capitalization as Ripple did? Of course, I do. Moreover, I am confident we can surpass them.
As UTN is B2B focused, do you urge to buy the coins on the free market or are you selling coins from Universa company?
You see, tokens can only be bought on the free market. That’s a rule. Moreover, all our business partners are forced to purchase transactions at the current market value of the token as of the transaction time.
Has Universa had any negotiations with the Central Bank of Russia? What are, in your subjective view, the prospects of blockchain implementation in Russia? And what is your impression from talking to various private companies (at exhibitions, forums) — are they really interested, and do they understand the importance of blockchain implementation?
Let’s divide this question into two. The first one is the interaction with the Central Banks. As you know from our reports, we are constantly interacting not just with the Central Bank of Russia, but also with other Central Banks, which are understandably interested in issuing their own digital currencies. Not cryptocurrencies, but centrally limited national currencies using the blockchain technology to automate payments and monitor all transactions. This is definitely the future for all of us. Fiat money is guaranteed to become a thing of the past. I cannot reveal any details at this stage; let’s just say central banks are highly interested, and these digital currencies will be launched soon in many countries. If we are lucky, some of these countries will be using Universa technology.
The second part of the question is related to trade fairs. As I mentioned earlier, the only reason why we attend them is to close sales. We use them to talk to potential clients. We don’t go there with the intention to set up a stand and have visitors walk by and say “huh, there’s this technology called Universa”. If we go attend a trade fair, this means there will be talks between Universa and a potential Universa client. What does it mean? This means that the client understands their business objectives and the savings they get by implementing blockchain. Saving more or earning more. You see, that’s the only thing a business needs. Cutting costs and increasing revenues. By implementing blockchain, or any automation whatsoever, you will cut down costs in most cases. Companies that see opportunities to improve their economic performance, they come and talk to us. With many of these we get to introduce design specifications, and from design specifications we proceed to implementing a pilot project. After the pilot project is completed, we assess the new economy. If economic advantages are obvious, we get to implementation. That’s what we attend trade fairs and events for, in general.
Do you think evolution of blockchain will speed up the process of removing material money from the world?
Absolutely. Digital money will replace fiat money, that’s inevitable. And that’s a matter of the not-so-distant future.
How soon will we see projects using UTN? What will these projects be?
First, they are already there. And quite soon, next week to be precise, you will see press releases describing these projects and how they use UTN. Right now, we have five or six companies actively writing smart contracts and using Universa MainNet as the main blockchain in their projects.
Are there any projects in the Netherands, US or Iran?
Out of this list, we are only talking to ING Bank in the Netherlands. Nothing in the USA and Iran, as far as I can tell. We are talking to some companies in the US, but this has not yet resulted in any pilot projects or contracts.
Is Universa also focusing on the western countries?
Yes, we do work worldwide. Universa has no country restrictions.
Do you think Bakkt, ETFs and regulations will be the turning point for the crypto world?
I don’t think so. I think we are living in an economy of digital money and in the economy of digital transformation, and Universa has a unique chance of becoming a new Internet, if you can say so, a new protocol carrying all digital assets. Look at this: Ripple is for Ripple, Bitcoin is for Bitcoin. Our job is to make Universa accommodating for any digital asset, to enable digital Euro, digital Amero, digital Guldin to flow through our infrastructure as easily as, say, payment between countries, contractors and other companies — using Universa smart contracts, thus moving to self-executing document flow.
Can you share your node deployment plans? How many are you expecting to launch, and how can we start working on these?
As you know, we cannot have more than 5000 nodes. But we only expect to have 100 to 150 this year and next year. Right now, we have about 600 applications for running nodes. Eventually, once all smart contracts supporting democracy within the Universa blockchain are completed, we will release them. We are a bit behind schedule here, we were planning to release them early in the summer, but at some point, I hope, we will release these smart contracts.
Does Universa have the capacity and readiness to survive severe ‘bear market’, if needed?
Certainly. I already said we are a company fulfilling commercial orders to implement blockchain technology — and using transactions on MainNet to make a living and pay for its labor costs. So, we can stay on the market as long as needed.
Can Universa become the so-called Fourth Industrial Revolution?
Universa can become one of the underlying protocols of the Fourth Industrial Revolution. This can be one of the main protocols enabling smart things, driverless cars, flying taxis and smart cities communicating with one another. All this endless variety of devices requires not just media for communication, but media where all these entities can sign smart contracts, and these smart contracts are what makes Universa superior to all other similar systems.
What are your future expectations regarding speed increase?
Even though we are one of the fastest public blockchains in the world to date, we are still planning to double or triple the speed over the next few years. That is, to 35k, then perhaps to 50k transactions per second. We will look at the network load to see if we need to increase it further. If the network requires a sharp increase in performance, we will probably review our approach to the network architecture and see what we can improve further. For now, I don’t see this as a top priority. We’ve got one hell of a performance already.
Should we be afraid of a quantum-based financial system?
No. I believe the first quantum computer that will be developed, if its programmers are smart enough, will first learn to compute the elliptical function, which will enable them to calculate the bitcoin to the end. Then the creator of this computer will get 5 million bitcoins. If you are thinking about creating a quantum computer, please start with calculating the elliptical equation of the Bitcoin function. You might be insanely rich. That is if you don’t collapse the Bitcoin entirely.
Could you tell us in more detail why you decided to tokenize Bitcoin and Ethereum on our blockchain platform?
Well, I think the answer is obvious. When you make a transaction in Bitcoin, it can take quite a while to get the confirmations. Sometimes, at peak loads, it can be minutes — or even hours. To exchange Bitcoin to Ethereum quickly, if needed, you can use Universa hypertokens. What does it mean? This means an exchange between any digital assets in crypto world, what you call Atomic Swap, and what we call Instant Swap, between any tokenized assets. This means that the Universa platform can be used to tokenize any digital or non-digital assets. To make the picture simpler, we chose the most popular cryptocurrencies (Bitcoin and Ethereum) for the pilot run. Now you can exchange Bitcoin to Ethereum and back instantly. And by sending Bitcoin hypertokens to a friend, he will get confirmations and receive the hypertokens instantly, in seconds — not minutes, let alone hours. And what’s more important the cost of this transaction will equal 1 cent. Even if you send 100 million dollars’ worth in hyperBitcoin to a friend, he will get 100 million dollars and still pay 1 cent for the transaction. Being cheaper and faster are the two key advantages of Universa blockchain.
Do you think blockchain effect will be comparable to the Internet revolution? How long will it take for blockchain to become a ubiquitous technology?
I think blockchain is indeed for a new generation of technology. It can be compared to the Internet revolution. Effectively, we see the entire existing financial and legal world entering the digital era. We are getting digital money, digital contracts and this is a radical departure from our traditional relations. We move from natural exchange to a world in which a refrigerator talks directly to a grocery store to have cucumbers delivered to your table. And they sign some smart contract concerning the cucumbers for your table. This is a whole new era, a brand new method of mutual settlement. Being the underlying infrastructure for this new digital economy is a big challenge and a big test we would like to address effectively. I do hope we will address it efficiently and quickly. I reckon this will take three to five years.
What is the most important thing you have learned working in the Universa project?
The biggest lesson, as usual, is about people — about human resources. You see, a company is not about the processes, it’s about the talent you can bring into the company to have it developed as fast and as efficiently as possible. If you want to develop quickly, you must hire the best talents.