In March, Coca-Cola and the US State Department announced they would jointly use a blockchain platform to set up a reliable register of employees and labor agreements. That should help countering forced labor worldwide. The subject of the announcement is Emercoin blockchain. The main developer of Emercoin and Vice-President of Jefferies investment bank, Oleg Khovaiko, told Invest Foresight why major companies and government agencies are interested in using Emercoin.
Oleg Khovaiko was born in 1967 in Sumy Region, Ukraine, USSR. He graduated from MEPhI (Moscow Physics Engineering Institute), cybernetics department. Since 1998, he resides in the US. He has worked in IT, biotechnologies and finances. Currently, he is Vice-President at Jefferies investment bank.
– Why have Coca-Cola and State Department chosen Emercoin from among a variety of blockchains? Why not Ethereum, for example?
– I am not aware of the criteria behind the choice made by Coca-Cola and the US State Department, but I assume our project was selected due to its high reliability. We have a simple interface compatible with Bitcoin, the network has been in operation since 2013 and has had not a single failure. Nobody would base a business worth lots of millions of dollars on an unreliable foundation. Our blockchain is based on the Bitcoin core which has demonstrated a very high reliability. But we have also added a universal extension which allows arranging some blockchain distribution services such as telephone communication, security systems, notarization, etc. Our system is open. In Ethereum, any smart contract may be downloaded. Similarly, in our system, any passive data may be downloaded. I should stress it, any passive data. No external code, downloaded in our blockchain, will get any management. This way, we ensure security and flexibility. We intentionally rejected Ethereum’s approach where any smart contract is executed by every nod of the network. In our opinion, that makes the network potentially vulnerable.
– What were the terms you negotiated with Coca-Cola and the State Department? What is the contract amount?
– The contract went through Blockchain Trust Accelarator (BTA). BTA is a non-profit organization which helps solving problems of businesses through the blockchain technology. One of such solutions will be a reliable Emercoin register of Coca-Cola’s employment contracts. The project is still at its initial stage and we have not fully established the entire scope of works and their distribution among the project participants. Our partner in this new project is Bitfury. It is therefore too early to announce the contract amount. Anyway, that information is confidential.
– What is the role Bitfury Group, a major chips manufacturer, plays in this project?
– We have been cooperating with Bitfury for three years. At the beginning, we were just one of the forks for them. But then they audited our system and assessed our technical solution. Then, they chose Emercoin to link to it their own product, Exonum private blockchain. It is expected that based on that blockchaint technology, Coca-Cola will create a transparent register of corporate labor contracts which can help in combating forced and juvenile labor. No details of the contracts, personal data and other confidential information will be incorporated in the public blockchain. Hence in Emercoin blockchain, no data of the employees will be stored, but the hash tags for such data which will evidence existence of the data and their uniqueness. In case of an audit or investigation, such data can always be retrieved, examined and used as evidence. Whereas no foes will be in a position to obtain the information.
Exonum is a private blockchain from Bitfury. Unlike other restricted blockchains whose reliability is only determined by their owners, Exonum puts its status hash tags into the public blockchain (Emercoin, in our case). This way, it gets reliability, generated by the miners of the external public blockchain.
– What is the price of your transaction?
– It is 0.01 Emercent or 0.0001 Emercoin, which approximately equals 0.02 US cents. For Bitcoin, a transaction cost is somewhat 10 to 20 US cents. So in our case, it is cheaper.
– What about the swiftness of the transactions processing?
– We close the block within ten minutes, just as Bitcoin does. But Bitcoin has a slower speed of processing transactions due to a greater network workload, we make it a bit faster. But for Coca-Cola the speed is rather insignificant, hence we do not really focus on that.
Besides, our blockchain contains a number of non-monetary services which Bitcoin lacks (see for more detail). We believe that once the main project is successfully launched, Coca-Cola and the Department of States will show their interest in those services as well.
– Can you please tell about your cooperation with the Russian Railroads?
– We work with I-Techo, a leading Russian system integrator, one of the top ten in Russia. About a year ago, we signed a trilateral agreement with Estonia’s Hashcoins OU and I-Techo on setting Emercoin Consortium to develop and implement blockchain solutions. Within the framework of the said consortium, I-Techo started coming up with such solutions. One of the solutions was intended for the Russian Railroads. The company has started to publish the status of its cargo transportation in a blockchain. As I see it, there are some ten entries signed by the Russian Railroads key that appear in the blockchain on a daily basis. That means they have everything functioning perfectly fine. The information on the entries to the Emercoin blockchain is regularly published. I see the news feed of the Russian Railroads’ cargo transportations platform.
The Ukrainian branch of Deloitte has by itself integrated their product DocSensuswith Emercoin blockchain to legalize powers of attorneys and other documents.
– For the Russian Railroads, what are the cost advantages from the Emercoin blockchain?
– The Russian Railroads has first of all got a chance to attract additional orders for their railroad cargo transportation. In Emercoin, the cargo transportation marketplace index can be seen in real time showing an average price of a railroad car hire per day, and the number of orders for various types of cars received on any given day. Making entries to the blockchain does not involve significant costs. The Russian Railroads does not use Bitfury’s Exonum but downloads its data directly into the public Emercoin blockchain. As far as exact figures are concerned, I am not aware of the cost impact.
– Where are you customers mainly located?
– Basically, in the US. We have recently made two partnership agreements on implementing our VOIP ENUMER system with two companies, eZuce and PortaOne. They render services to about 150 large telecom providers. If using ENUMER, call connection time will be reduced from 2 seconds to 0.3 seconds. Besides, it allows making free calls to other system subscribers, thus resulting in reduced costs of telecommunications and increased quality of voice communication (see details). In Russia though, we do not advance at a similar pace. I believe, it is due to the massive Ethereum affection. Still, there is a certain interest, especially among the scholars. Not long ago, I read some lectures at the Bonch-Bruevich Saint-Petersburg State University of Telecommunications for the lecturers who can use those lectures for their teaching.
– What are your revenues?
– Basically, we work free of charge. Our product is OpenSource and we share our services with everyone. As for the Russian Railroads, we offered them a two hours long free consultation. The entire work was done by I-Techo. As for ourselves, we have got two sources of income. One is the contracts under which we create most sound things (I hope, our project with Coca-Cola and the State Department will be one of them), and the other is the growing value of our digital currency, Emercoin. The aggregate revenue of our companies in the US and Russia is quite modest, last year it was under a million USD. But over the past three years Emercoin has been gaining about 400% in value per annum.
– How do you see Emercoin in one or five years’ time?
– We plan to issue a new version of a wallet (Segwit supported), we keep working on the service core and new services. The main thing for us is to ensure a broadest proliferation of Emercoin, not to reap a benefit at the expense of deceivable investors. We are leading in non-monetary services of a practical application. What is a smart contract through Ethereum which is so much fancied in your country? After all, that is a payment transfer. What is a free telecommunication about? It’s about anything but not money. We just arrange connecting our customers via Internet. Security systems, Torrent links, they are not about money either. We all move toward the development of non-monetary services. While the coin community is actively engaged in the zero-input game (tokens, ICOs, etc.), we launch projects which generate added value. The market will some day show if we are right.
Going in the monetary direction means creating a new Bitcoin which already exists.
– But you are an investment banker. Why would you all of a sudden start developing non-monetary services?
– The bank for which I work, has nothing to do with the Emercoin. And since I am an investment banker, I know perfectly well what payment services and cryptocurrencies are about. And what their risks for the banks are. I promote Emercoin in my personal free time and I do not get paid for that or receive any remuneration.
– How did you get to the US, to the Potomac River in Maryland?
– I arrived there in a big white plane. To be serious though, I was invited and got an employment visa to take part in the PubMed government project, a medical publications search system. I had worked in biotechnologies as a contractor for somewhat ten years. Then I shifted to the finances.
By Natalia Kuznetsova