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Ukraine pulls way ahead in Cryptorevolution

March 31, 2017
3 min

Ben Karns, an analyst at Street Institute, spoke about his experience of the rapid technological progress in Ukraine.

The expert stated that Ukrainians desire to merge into the civilized world, causing the first technological advances in the country. The events of 2014, which led to the overthrow of the Kremlin placeman, Viktor Yanukovich, generated the momentum for the digital revolution and unprecedented introduction of electronic currencies such as Bitcoin.

Brief outline of cryptocurrency

The most popular cryptocurrency, Bitcoin, is based on the blockchain technology and represents a chain of blocks filled with certain information. The newly established block contains previously known data in the preceding blocks, as well as new information added to the end of message.

The blockchain data is freely available and allows you to track all transactions. Thus, a centralized block system contributes to the decentralization of digital currencies, making them absolutely transparent, safe, and anonymous means of payment.

Many Ukrainians use the cryptocurrency as a survival tool in the environment of high inflation and national currency depreciation, which lost 80% of its value owing to the revolutionary events.

In 2014, about 5000 ATMs of the BNK-24 network included a new opportunity to the list of their capabilities - the Bitcoin buying service. This procedure could be carried out as easily as any other financial operation.

The Ukrainian authorities have sought ways to make the process of selling state property transparent, using advanced technologies. The disintegration of the USSR in 1991 was considered as a kind of revolution without a revolution in Ukraine: all state structures remained on their positions, applying the pseudo-democratic campaigns and rhetoric.

Digital currencies and Ukrainian democracy

A historian, Serhy Yekelchyk, claims that the new elite is represented by the old Soviet cadres who came to power as a result of the disintegration of the empire, instead of the revolution, and therefore they did not consider it as necessary to build a society, based on the democratic values and pure market economy.

Former party leaders turned the process of selling state assets to the private sector into a profitable business. A small group of officials controlling the sale-off used the opportunity to obtain certain preferences and replenished the oligarchs’ pockets.

Among the top officials, there are the disgraced President, Viktor Yanukovich, and the former Prime Minister, Yulia Tymoshenko, who used to exploit such methods as evidenced by the trial documents.

On last July, at the Odessa conference devoted to the Bitcoin issues the Minister of Finance of Ukraine, Oleksander Danylyuk, shared his plans to replace the traditional auction process with brand new electronic system based on the blockchain technology.

The NBU project, Auction 3.0, should be implemented within the Cashless Economic Project before 2020. It is expected that a change in the procedure will significantly save funds and reduce the influence of the bureaucracy. In addition, all transactions within the auction will be public and fully transparent.

At the same time, Mikhail Tyutin, the developer of the electronic elections project, told in his interview that a nationwide transition to the blockchain is a political matter, not a technical one. By law, such concepts as, for example, ‘digital elections’ or ‘digital auction’, do not exist. Using the existing legal framework, the lawmakers need to adopt new high-level drafts. In turn, this can cause resentment among high-ranking officials, oligarchs, and all those who accustomed to earn but not lose on projects of this kind.

Blockchain technology integration at the state level will entail financial losses, making the system transparent, honest, and absolutely uncorrupted. Only local citizens are interested in the revolutionary solution while for others it means another collapse.

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