As the popularity of digital currencies and blockchain disruption rapidly accelerate, its limitations remain extensively questioned. Andrew Zimine, CEO of Exscudo, is attending the NPF & Regtech Leaders Forum 2017 to do just that by questioning the features and stereotypes of the current ecosystem, while sharing his knowledge with panellists from the EU Commission, European Payments Council (EPC), ECB, EPA and GRCTC.

Andrew, according to your experience as a CEO and industry innovator, what are the key features needed to succeed in a market governed by continuous innovation and growing consumer expectations?

This is similar to navigating a ship. The captain chooses the team and the ship itself, with ideas as the cargo, and makes a roadmap to the destination point, mythical El Dorado. The only thing is that the captain can check weather reports, while the CEO of an innovative company has to rely on his intuition and vision, how innovative and in demand his ideas will be in the future, while taking into account the present. Finding the correct choice here is also important, as overdoing things can lead to becoming an outsider, who is offering ideas that consumers will never want to use.

At the NPF & Regtech Leaders Forum, you will be speaking about blockchain. Briefly describe its main challenges.

Blockchain technology being used in Bitcoin proved its security in almost 8 years of stable work, and at the same time showed some bottlenecks: Bitcoin can solve tasks of a payment system, but it lacks speed and convenience. Besides, blockchain has a much bigger potential than just enabling money transfers from one account to another.

Exscudo is solving current blockchain problems by implementing EON Blockchain. Tell us more about it and its core features.

The project is explained in detail from a technical viewpoint in our Wiki and White Paper, available to the public. The following problems have been solved:

  • Full decentralization. We have solved the size problem by using the blockchain ‘scaling down’ method without any loss of integrity.
  • Trust problem of products and teams behind them. To ensure the qualitative services, we are directly involved in the development of each of them, which guarantees the quality of the outcome and solves many problems for developers as well.
  • Applied tasks. We are trying to solve everyday problems. We do not disrupt the existing order, we just implement maximum seamless integration to improve characteristics of service or product using EON technology. It means, not technology for technology, but technology for people.

Who can use EON?

On the one hand, it is businesses that are able to articulate clearly its business processes and digitalize them. Here, integration itself is simple, while the most difficult moment is the transition. EON fits the banking sector perfectly as well. It has the necessary tools to satisfy all banking needs. EON is also a space for creativity: not only for work, but for private use also. We provide safe communications, where data security does not depend on the third party and social functions. What is the use of 100,000 profile Likes on social media besides self-satisfaction? With content monetization they can be turned into a tidy sum. At the same time, monetization should be intuitively clear and take into account both sides’ interests: the one who has ‘posted’ and the one who has ‘liked’. We solve these problems in our Channels app.

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How will upcoming regulatory changes such as PSD2, MiFID II affect blockchain and cryptocurrency?

I think any regulation of technology which is perfect in terms of math and logic is absurd, as even the most sharp and accurate law is still imperfect. Its main vulnerability is the notorious human factor. That’s what we are solving with decentralized systems by tackling the two main problems – trust and equality. On the other hand, if the activities of different DAO or ICO procedures were regulated or the instructions on how to work with cryptocurrencies were issued, it would not only contribute to the significant growth of state economy, but also boost the economic development in general. To finalise my ideas, it’s crucial to mention that I am not against the country’s participation in blockchain technology. I support the participation only, not power regulation or dictatorship.

Cryptocurrency is often criticised due to its anonymity and criminal use. How can it be prevented from being used like this and a more positive public opinion be formed?

In fact it is a witch hunt. Cryptocurrencies are easier to track and have huge potential for verification, bigger than any fiat payments. All the claims we read or see are mostly either the statements of incompetent people or attempts to manipulate public opinion. Due to their architecture cryptocurrencies are public, and with a certain level of commitment it is possible to track the full history and entire transaction chain from the initial coin generation. And let’s not forget that 97% of crimes are committed with fiat money, in most cases criminals use the US dollar. Hence, we should not focus on the tool, we should focus on how it is used, most of the world’s leading countries solved corruption and security problems by focusing on mentality and conditions, not on the tool itself.

News about “Bitcoin cash” (BCC) and more efficient bitcoin blockchain has been hitting the internet over the last few days. Share your insights: what’s happening in the market now? How will it change the game of the industry? Why?

This fork is a possibility for different groups of people to back their opinions technically, by mining capacities. Each of the directions, Classic and Cash have their headliners which enabled the blockchain fork after Segwit implementation. I can only speak from my perspective, without knowing the details of BCC developmental programme, my opinion will not be objective. First of all, I would not call the statements of the group supporting the VIABTC a direction (let’s consider it to be like a direction), more technologically advanced or effective. After the entire community expressed the support for BIP 91 VIABTC, the crew had not changed their plans anyway, although BIP 91 closed their first objection. Moreover, I still have an impression that someone is trying to seize control and impose the monopoly to dictate tech changes of Bitcoin net in the future. This is, by the way, a clear example of the policy’s negative impact on the technology.

What are your overall projections for the next 3 years of cryptocurrency?

Cryptocurrencies have already shown their potential to the world. Besides, the developers have proved that cryptocurrency is not only transactions of entities from one node to another, but also smart contracts, colour coins, decentralized exchanges and many other processes.

That is why within the next three years we will see how the business is moving to blockchain, digital business, as blockchain will significantly cut the costs and increase the level of trust. The same will happen with the banking sector, because blockchain technology solves the problem of security and trust.

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