Blockchain technologies (Russian market)

Main articles:

• Blockchain
• Blockchain in Russia
• State policy on blockchain development in Russia
• Blockchain in banks in Russia
• Blockchain in the Central Bank of Russia
• Blockchain in Sberbank

2017-2018

Volume and players of the Russian market

According to the Unified State Register of Legal Entities, as of January 10, 2018, 50 legal entities have been registered in Russia that somehow connect their activities with blockchain technology, or at least have this fashionable term in their name. Of these, 38 companies were registered in 2017, six companies in 2016, and another six in the period from 2006 to 2014 (some joined the blockchain as a result of renaming).

In Russia, the number of organizations whose activities are associated with the blockchain is growing

The main original areas of activity of the blockchain company indicate data processing, the use of computer equipment, the development of computer software, legal activities, consulting in the field of computer technology. However, there are also companies whose activities are also related to wholesale non-core trade, the production and sale of electronic technologies and telecommunications equipment, scientific developments in the field of biotechnology, rental of intellectual property, the provision of "financial mutual assistance" and additional education services for children and adults.

So, in December 2017 alone, 10 legal entities were registered:

• "Intelligent Blockchain Labs" ("Aibisi Labs"),
• "Group blockchain,"
• "Blockchain-MZS,"
• "Crypsis-Blockchain Technologies,"
• "Blockchain-Service,"
• "International Scientific Society of Blockchain Developers and Users,"
• "Blockchain Technology Center,"
• "Blockchain  Intellectual Technology,"
• "Mining  Blockchain  Technologies Service,"
• Analytical Center of the Association of Developers and Users of Blockchain Technology and Products Created on Its Basis for the Development of the Digital Economy (RACIB).

As Igor Kalganov, general director of the Center for the Practical Application of Orbit Blockchain Technologies, told TAdviser, his company is involved in many blockchain-related projects in the public sector.

The biggest problem of the Russian market is that any project begins with a non-disclosure agreement, so I can't name specific projects. I will clarify only that we are engaged in projects related to real estate and with voting and decision-making systems in public administration, "he said

Since 2014, Kalganov has been leading the 33 Elephants project, which is introducing blockchain practices in real estate transactions. Blockchain for real estate transactions is a combination in a single information field of all participants in the transaction, he explained.

The Orbit Center is a new legal entity that was created at the end of November 2017. Kalganov told TAdviser that Orbit will analyze and implement blockchain systems in non-real estate sectors.

Blockchain will be in demand in everything related to voting systems, decision-making systems. For example, the Moscow electronic referendum service "Active Citizen" already uses blockchain. Blockchain is also necessary in corporate management, in logging processes, in cash flow control, the expert lists

Qiwi Blockchain Technologies CEO Alexei Soloviev, in an interview with Khaitek, estimated the blockchain market in Russia at 1 billion rubles. He explained to TAdviser that this figure was the result of accounting for projects between Russian counterparties related to consulting on the implementation of blockchain, investments in educational programs, the creation of IT solutions and products on the blockchain.

This is an assessment excluding ICO of Russian projects, "Soloviev emphasized in a conversation with TAdviser

The number of real blockchain companies, according to the expert, is more than indicated in the Unified State Register of Legal Entities: taking into account international projects created by Russian residents and oriented to foreign markets, the number of companies can be from 70 to 100.

According to Kalganov's forecasts, in 2018 we can expect the launch and successful implementation of at least 10 more blockchain projects related to the public sector.

As for the commercial sector, it is more difficult to assess the situation, up to 70% of the Russian economy is the public sector, he notes

The same market assessment was given by TAdviser  and Evgeny Grankin, senior analyst at the Department of Strategic Development and Economic Forecasting of the Gazprombank Center for Economic Forecasting. According to him, in 2017, Russian projects (these include those projects where most of the team or the main participants are Russians) attracted over $300 million during the ICO. Excluding funds raised during the ICO, the blockchain project market in Russia amounted to about 1 billion rubles in 2017.

As of the beginning of 2018, the blockchain technology market in Russia is at the initial stage of development, analysts at the Blockchain Technology Center are sure:

Now there is an active stage in investing in projects on the blockchain, the business is studying its capabilities, "TAdviser was told in the Center

The active period of real implementation of these technologies in the public sector of the economy and business is likely to fall on 2018-2019, experts predict.

The Blockchain Technologies Center was registered in December 2017 and works in several areas: cryptocurrency fund, market analytics, cryptolombard. At the moment, in the process of developing tokens for smart contracts Ethereum a cryptocurrency fund, TAdviser was told in the company: "The token will be used to guarantee the placement of assets in the fund."

However, not all experts give optimistic forecasts of the development of blockchain in Russia.

Now it is difficult to accurately estimate the number of real blockchain projects. We can confidently say that so far the vast majority of such projects are at the pilot testing stage, "Viktor Morozov, director of PricewaterhouseCoopers risk analysis and control practice in Russia, told TAdviser

Companies find it difficult to find a niche in which the use of blockchain technology can effectively solve the existing problem.

At the same time, it is obvious that blockchain is one of those technologies that will significantly change the principles of interaction between market entities, "emphasizes Morozov

Another problem of the sector is the lack of official information on investment volumes, the expert notes. According to his forecasts, in the near future the development of blockchain in Russia will occur due to the appearance of blockchain solutions and services at the state level, the implementation of projects in the oil and gas, energy and financial sectors of the economy.

Grankin from Gazprombank also speaks of market closure.

It is quite difficult to accurately estimate the number of existing blockchain projects due to the closed nature of this market and the lack of disclosure requirements. At the end of 2017, there were about 300 blockchain projects in Russia, information about which is available in open sources. At the same time, it is obvious that the number of teams working in the field of blockchain in Russia may be more, but information about their activities is not public, "he explains

For example, in 2017, the State Committee of the Republic of Tatarstan on archival business conducted an experiment on the use of blockchain technology when accepting documentation for storage in the archive. The competition for the implementation of relevant experimental studies was won by Kazan (Volga) Federal University (KFU). The cost of the study is estimated at 4.996 million rubles.

Another example is the launch of a digital platform for knowledge exchange and copyright management by the Ministry of Education and Science of Russia. The creation of the platform, which is due to be completed in November 2019, will be carried out by Neolant. The department is ready to allocate 67.95 million rubles for development.

The most pessimistic forecast in an interview with TAdviser was given by Advisor to the President of Russia German Klimenko.

If cryptocurrencies and ICOs are not taken into account, at the moment there is no formed blockchain technology market in Russia: there is only a market of high expectations and promising experiments, and no more than 20-30 people in the country have good competence in blockchain technologies, he is sure

Klimenko believes that it will be 2018 that will be decisive for the blockchain in Russia.

Existing blockchain solutions do not look economically justified. And if an economically profitable area of ​ ​ application is not found, then the technology will leave the sector of attention of investors and developers, "says the expert

2018 is considered decisive for the development of blockchain in Russia and Evgeny Grankin. The further development of this area will be supported by the emergence of legislation in this area, he is sure.

It is expected that the regulatory framework for blockchain and cryptocurrencies will appear in Russia in the second half of 2018. This will lead to an increase in interest in the industry from institutional market participants, and, as a result, will significantly expand the ability of companies to attract financing. At the same time, the quality of blockchain projects in Russia will increase as regulatory requirements for companies tighten, the expert explains

Russian blockchain market trends

Cryptospeculation

Blockchain is often considered only from the point of view of cryptocurrencies, but, according to a number of experts, this is an erroneous path.

The main market trend (more precisely, the main market misconception) is that a significant part of customers still consider blockchain exclusively in the context of cryptocurrencies and mining. This path, alas, is dead end, "says Anton Khavtorin, head of blockchain practice at AITI Group of Companies.

Vladimir Litoshenko, development director of First Line Software, believes that today blockchain is more hype.

A crazy increase in the number of completely speculative ICOs, an unconfirmed hype around cryptocurrencies, attempts to apply blockchain technology where everything is decided without it, just to indicate blockchain in the portfolio, he lists.

Dmitry Krasyukov, Deputy General Director of SAP CIS, believes that all the news noise around cryptocurrencies will gradually come to naught, while corporate scenarios for using the blockchain will be in demand.

Importance of corporate scenarios

Despite all the cryptocurrency hype, experts see the main development of blockchain technology in corporate application.

According to Dmitry Krasyukov, understanding of the importance of corporate scenarios and their use in business will grow.

The decision to use blockchain will not be made on the basis of "fashion," as is often the case now, but on the basis of how much a particular scenario will be more profitable using this technology. If in some case the profit from the introduction of blockchain is calculated and proved, then it will finally cease to be a prototype, "he says.

Svetlana Vronskaya, marketing director, Korus Consulting"" also notes that so far a larger piece of pie in the blockchain technology market is occupied by ICO similar things related to cryptocurrencies. At the same time, in her opinion, the technology itself opens up gigantic opportunities for any business in the field of reducing costs, attracting new customers and creating tools for working with employees.

Large number of pilot projects

Experts of the domestic IT market record the appearance of a large number of pilot projects in the field of blockchain.

At the same time, as Dmitry Krasyukov, Deputy General Director of SAP CIS, notes, many of them are literally "made on the knee," without some kind of development environment, because the initial tools are now available for download to everyone, and there are not many skills yet.

Real business cases

Another market trend that can be attributed to the main ones is the search for real-world business cases and their scaling across the ecosystem.

At the moment, most of the implemented projects affect two or three participants. Therefore, the main trend should be the appearance of really working business cases on the scale of at least several dozen companies, "said Denis Reimer, Lanit vice president of digital transformation, CEO of DTG (part of the Lanit group of companies).

Timur Akhmerov, CEO of BARS Group, adds that in the near future there will be a tough screening of most of the current projects made on the hype.

There will be units that will make real products, achieve real success. These companies will have a chance to become even global leaders in the industry. As a result, unicorns will remain, and the Russian Federation has a good chance to integrate into the process and in the world market with a "sparing" course of regulatory regulation, he said.

Technology Scaling

From a technological point of view, the main task is to accelerate the blockchain to speeds that can compete with Visa in the number of transactions, as well as develop mechanisms for integrating various blockchains among themselves. This, in particular, says Denis Reimer.

General Director of BARS Group Timur Akhmerov also attributes the scaling of the blockchain to key trends.

Progress is well under way, but many thousands of transactions per second (like VISA) are still far away. In parallel, technologies are already emerging that compete with blockchain (for example, "hashgraph"), which can potentially replace blockchain as a more archaic technology due to the superiority in throughput, "he says.

Integration of blockchain with other technologies

It is gradually becoming clear that blockchain is, in fact, just a distributed database. It is very difficult to create a prototype for some scenario without the use of any auxiliary services, notes Dmitry Krasyukov, Deputy General Director of SAP CIS.

Therefore, large IT vendors already have solutions for integrating blockchains with other technologies. For example, SAP allows scenarios to integrate with machine learning, artificial intelligence, predictive analytics, the Internet of things, etc.

Blockchain for the public sector and state-owned companies

According to Fedor Gritsenko, director of strategic projects at Servionika, the bulk of projects are implemented by public sector institutions and large Russian companies, mainly the financial sector (Sberbank, Vnesheconombank).

A separate block is the development of blockchain technologies to create a transparent paradigm of communication between citizens and the state.

According to Svetlana Vronskaya, using the capabilities of this platform, at the end point we will be in a situation where the need for regulators collecting and distributing taxes, for example, will simply fall away, since the chain of cash receipts and expenses will be available for viewing and control by all interested.

Promising directions of blockchain use

In 2018, the blockchain is called one of the most breakthrough technologies. It helps shape new business models in various sectors of the economy, both for large companies and startups.

We believe that blockchain will become the main driver for the digital transformation of most sectors of the economy, "says a Konstantin Goldstein leading technical evangelist, Microsoft blockchain strategist in the Central and Eastern European region.

The main consumer of blockchain technology is the financial sector. First of all, this is due to the growing needs of the business of this sector of the economy for increased protection of online payments, which can be achieved precisely with the help of decentralized technology.

Microsoft believes that the blockchain will abolish certain types of correspondent relations, for example, clearing companies and intermediaries, contract executors, outdated models of payment systems and brokers.

So, in the coming years, promising areas for blockchain will be such industries as finance, health care, insurance, retail, real estate, property registration and the music industry. Objectively, processes that previously took several days or even weeks, already now with the blockchain can be carried out within a few minutes: to establish data exchange between counterparties, to increase the reliability and availability of services and services for customers.

We at Microsoft are not only researching this technology, but also providing business with tools to implement various cross-industrial scenarios, and on various platforms. A large number of blockchain platforms are already available in the Microsoft Azure Blockchain as a Service (BaaS) cloud, including Ethereum, Quorum, Chain, Corda, Waves, etc. Moreover, a comprehensive ecosystem is being formed in BaaS for the implementation of various blockchain projects for any needs and for enterprises of any size (from large companies to startups). Creating prototypes or pilots in BaaS will take them a few days. In addition, BaaS allows you to integrate advanced technologies such as artificial intelligence, the Internet of Things, etc., into these projects. Microsoft also has Azure Marketplace, where companies can not only find the blockchain solutions they need, but also lay out their developments, "says Konstantin Goldstein.

According to Fedor Gritsenko, director of strategic projects at Servionika, the broadest prospects open up to the areas of public administration, housing and communal services and energy, transport, medicine, and the financial industry.

The introduction of blockchain technology in the public sector should significantly accelerate the interdepartmental document flow, as well as the provision of public services, while completely eliminating the possibility of forgery of documents. Projects using the blockchain are already being implemented in the DIT of Moscow (Active Citizen system ); a joint project of the Moscow City Hall and Rosreestr is being developed - a blockchain system for registering real estate; the use of blockchain in procurement is being tested by the Ministry of Economy together with VEB .

As for the housing and utilities sector and energy, energy retail companies can independently bill consumers based on recording readings in the blockchain. Another side of blockchain use in housing and communal services: tasks related to technical monitoring, prevention and infrastructure repairs.

An example of the use of blockchain in the medical industry is Estonia, where, by order of the government, a million medical records were transferred to the blockchain, which allows you to store all information about the health of citizens in a single system.

Dmitry Krasyukov, Deputy General Director of SAP CIS, sees great potential in the use of blockchains in those areas where it is necessary to organize the interaction of a large number of participants in an untrusted environment.

SAP plans to use blockchain in a solution for managing and servicing digital assets in production (business networks, digital twins, etc.), in logistics, distribution and pharmacology, "he says.

Anton Khavtorin, head of blockchain practice at AITI Group of Companies, believes that blockchain as a technology is most effective where there is a regular life cycle of a working object and many participants in this process.

Document management in an environment with many participants, insurance, logistics, notaries, rights management of various kinds - blockchain is very well suited for these tasks. Moreover, the technology should not be considered exclusively as a cerber, it allows you to create a "neutral strip" between the IT contours of the participants in the process, in which they can open maps and operate with a priori up-to-date and reliable information, "he says. - In addition, these are areas with the maximum participation of individuals - relations with government agencies from the top to the bottom, public foundations (including charitable ones), certifying organizations - wherever citizens can act not only as suppliers of information, but also control (within the defined framework). In general, blockchain is something from the category of civil society, when a collective "citizen" acts as an eligible active participant in a wide variety of processes.

Svetlana Vronskaya, Marketing Director of Korus Consulting, believes that everything related to transactions based on a large number of collected and regularly received data has great prospects for working on the blockchain.

That is why already now distributed consortia of various types and industries are gathering on the blockchain, the transport and logistics industry is actively using the blockchain, registries and transactions are being created to register any material assets. A separate block is the issue of transforming the banking sector, taking into account the use of the blockchain. Realizing that in the long term, blockchain will kill traditional banking, all financial institutions will have to restructure their work in such areas as making payments, working with securities, fundraising, KYC regulation and others, as this will save the sector from intermediaries and reduce transaction costs, "Svetlana Vronskaya believes.

According to Denis Reimer, Lanit Vice President of Digital Transformation, DTG CEO (part of the Lanit group of companies), if you go beyond the financial sector, in which the benefits of the use of blockchains are obvious to many, it is worth noting all the processes related to supply chains, allowing not only to track the origin of the goods, but also to make it transparent (within controlled limits for participants) movement from production to direct consumer.

Timur Akhmerov, General Director of BARS Group, calls fintech the most obvious promising use of blockchain - the number one industry with the most understandable application, a clear benefit for users and startups themselves from blockchain.

But if you fantasize, then, according to him, you can distinguish Gambling (gambling and bets) - a large-scale industry with a large percentage of fraud at the expense of poor-quality intermediaries.

Here, the properties of the blockchain will be in great demand, which eliminate the need for an intermediary, make the mechanism as transparent and verifiable as possible, "he said.

Another current direction is the advertising business and especially online advertising.

Blockchain here allows you to automate the process of launching large-scale campaigns and monitor the quality of their execution. Since the clicks of users consider the script, it can report directly to the blockchain, therefore, it is possible to make smart contracts that will make payments by achieving specific conditions. In general, blockchain can be applied everywhere, only expediency in most applications is absent, "concludes Timur Akhmerov.

Blockchain Problems

Lack of legislative framework

The most obvious and most often mentioned problem of the development of blockchain technology in Russia is associated with the lack of a legislative basis for its proper use. Without a regulatory framework, it will be impossible to launch projects into the legal field, and startups will be forced to be based abroad.

There is no right field for blockchain in Russia yet, said Svetlana Vronskaya, marketing director of Korus Consulting. Therefore, even in the case of the implementation of smart contracts, the question arises that such a contract is not a transaction signed by an electronic signature, since under Russian law a signature can only be issued by an authorized certification center. For similar reasons, a smart contract is not subject to intellectual property and cannot be litigated.

However, these issues will solve time and specific legal precedents, which, of course, will appear in the very near future, "said Svetlana Vronskaya.

Another legislative problem is related to the country specifics of the introduction of advanced technologies. This, in particular, is told by Dmitry Krasyukov, Deputy General Director of SAP CIS.

According to him, while in other countries (for example, in Belarus) there is a tendency to adapt legislation to the emergence of new technologies, in Russia they often try to adapt technologies to legislative norms, relatively speaking, a decade ago.

Nevertheless, government organizations understand these problems. In particular, the Central Bank is trying to create a "regulatory sandbox" (regtech) to begin to introduce blockchain. We hope that they will be able to adapt the legislation to modern technologies, "he notes.

Technology Youth

Another problem is the youth of technology. On the one hand, blockchain platforms are not yet mature enough and are not ready for widespread industrial use, on the other hand, neither business nor the state has yet fully realized the possible positive effect of using such solutions.

For many cases, a change in legislation and a deeper study of legal issues will be required. But the more companies begin to work on business cases and business models, the more experiments there will be in this area, the faster the technology as a whole will develop and the sooner new digital ecosystems will appear, "said Denis Reimer, vice president of Lanit for digital transformation, CEO of DTG (part of the Lanit group of companies).

Konstantin Goldstein, Microsoft's leading technical evangelist, blockchain strategist in Central and Eastern Europe, also believes that due to the youth of the technology, it requires improvement for large-scale use and compliance with industry standards. In particular, the issue of high throughput, scalability and integration of technology with existing systems has to be solved.

To solve this problem, we at Microsoft are working on the architectural approach of Bletchley. This is a new stage in the development of Blockchain, since Bletchley will integrate blockchain solutions with such common corporate services as CRM, ERP, Data Base and with technologies such as IoT, Big Data, etc., "he says.

Lack of expertise and information

The following problem is related to the previous one. Namely, due to the youth of technology, there is a shortage of qualified blockchain specialists on the market, a lack of information about both the technology itself and its potential prospects in various sectors of the economy.

All these factors, according to Fedor Gritsenko, director of strategic projects at Servionika, inhibit the development of blockchain technology in Russia.

Hype and speculation

Vladimir Litoshenko, development director of First Line Software, calls the problem of blockchain a speculative excitement and a thoughtless attempt to push this technology wherever possible.

Timur Akhmerov, CEO of BARS Group, also speaks about the excessive hype around this technology.

Now everyone is starting to use the technology, but the vast majority of startups do not need it at all. The hype effect around the technology can be clearly seen from the reaction of the traditional market to how some large companies associate themselves with the blockchain. Some companies simply rebrand by adding blockchain to the name, and get a multiple of the stock price. This is an abnormal situation, and sooner or later it will lead to the bursting of this "bubble," Timur Akhmerov is sure.

In addition, in his opinion, there is no need to decentralize everything in a row, since a centralized (traditional) platform will always be cheaper, faster and easier to implement than a blockchain.

Most of the benefits of blockchain can be achieved through other tools in centralized platforms. For example, smart contracts are not required to be on the blockchain. Each project needs to clearly understand which problem the technology solves in their business model, so as not to fall victim to competition from more traditional solutions, "said the general director of BARS Group.