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Cointelegraph spoke to Valery Vavilov, BitFury CEO, about mining, government Blockchain implementation, the first SegWit block mined and future plans of his company.
Blockchain,BitFury,Bitcoin Mining,SegWit,Valery Vavilov
Bitfury is one of the leading Blockchain technology companies and one of the largest private infrastructure providers in the Blockchain ecosystem. It develops software and hardware solutions for businesses, governments, organizations and individuals to move assets across the Blockchain. The company believes the Blockchain can open new doors for global economic opportunity and prosperity and advance the peer-to-peer economy and the Economy of Things.
Cointelegraph: Which criteria do you use when you choose which currencies you are mining?
Valery Vavilov: Our foremost focus is on security which Blockchain and cryptocurrency is the most secure, reliable and efficient. At the moment, we think Bitcoin is the most secure, reliable and efficient cryptocurrency with enormous potential to transform our world for the better.
CT: Don't you think it is too late to begin mining business for all the individuals and businesses now? If not, which steps shall people take to begin?
VV: It is not too late for an individual, business or even country to begin mining. The industry is still growing as more and more people use Bitcoin. And the future looks as promising as the present, as miners will move away from block rewards and into transaction fees, which will encourage even more to begin Bitcoin mining. We offer our cutting edge 16-nanometer chip and our enterprise-grade BlockBox, which allows you to almost immediately plug into the Bitcoin Blockchain and begin mining.
CT: What is ROI in mining?
VV: We do not disclose our financial figures but one of the best return on investment benefits from mining the Bitcoin Blockchain is knowing you are helping secure a new technology that is being increasingly used for more than just currency.
CT: Where do you recommend to place (geo-wise) farms for mining? Where do you place yours?
VV: Our mining data centers are located in the Republic of Georgia and Iceland.
CT: Bitfury has recently signed a deal with the Ukrainian government. Whose idea was that? How do you see the future of Ukraine with Blockchain introduction?
VV: Our discussions with Ukraine started in late 2016. Given the success we have found with land titling and now broader e-governance in our partnership with the Republic of Georgia, we are happy to expand to another government serving more than 45 mln people. Our goal is to bring the entire country’s e-governance system to Blockchain, including existing e-services and government services that still need to be digitized.
The project will begin by introducing Blockchain into Ukraine’s existing e-governance platform. By e-governance, we mean government services provided online – which can benefit significantly from the security and efficiency of Blockchain technology. Ukraine already has online “e-services” for many government agencies like business registrations, public procurement, construction licensing and more. The goal of our project is to bring Blockchain to the existing e-government services (like those I mentioned) and bring other services online using Blockchain to improve government efficiency and transparency.
CT: Tell us more about your partnership with the Republic of Georgia.
VV: The Bitfury Group and the National Agency of Public Registry (NAPR) successfully implemented a custom-designed Blockchain system that is now integrated into the digital records system of NAPR. This private, permissioned Blockchain is anchored to the Bitcoin Blockchain through a distributed digital timestamping service. Distributed digital timestamping allows NAPR to verify and sign a document containing a citizen’s essential information and proof of ownership of property.
This important timestamping service also allows citizens to ensure their documents are legitimate without exposing confidential information. This is possible by providing citizens with unique documentation known as a “hash.” This document hash is published to the Bitcoin Blockchain and can be verified whenever a request is made, benefiting from the Bitcoin Blockchain’s unmatched security.
This groundbreaking project is expected to continue to include smart-contract capabilities to streamline business operations for NAPR, including the sale of property, transfer of ownership and more.
CT: What are the benefits to implementing Blockchain in government registration and transactions?
VV: Blockchain technology first provides an unmatched level of security. A property registry built on the Blockchain can secure billions of dollars in assets and make a significant social and economic impact globally by addressing the rapidly growing demand for transparency and accountability. A Blockchain-based registry also allows governments and individuals the ability to audit quickly. Finally, a Blockchain-based registry allows for substantial reductions in the cost and time required to register and transfer property.
CT: Are government organizations your major clients? Do you also cooperate with investment/trading related companies, such as FX brokers and investment banks?
VV: Our company focuses on advancing any industry, sector, institution or government through the use of Blockchain technology. From EY to the Republic of Georgia, to the government of Ukraine, we are building all different kinds of partnerships around the globe as our industry rapidly evolves.
CT: In March Bitfury mined its first SegWit block with Bitcoin Improvement Proposal (BIP) 148. Why did you decide to go with SegWit?
VV: Bitfury extensively researches and tests Blockchain/Bitcoin software, and has issued white papers on many topics including block size, incentive mechanisms, Proof of Work and Proof of Stake consensus and the Lightning Network.
Since 2014, the position of the Bitfury Group Bitcoin Blockchain remains the same regarding the block size – we believe the network should increase the block size gradually over time. This is why Bitfury currently supports Segregated Witness, hereinafter SegWit, which is a well-tested and efficient solution.
The main goal of all block-size discussions is how to increase Bitcoin’s scalability and increase the amount of transactions that can be processed on the Blockchain. SegWit is one such solution. It provides better on-chain scalability, increases the effective capacity of the block and will allow the network to process more transactions. It also fixes some minor code issues and will make Bitcoin extensions like Lightning Network for instant payments and MAST for smart contracts on Bitcoin possible.
SegWit has been fully tested and supported by companies and it is ready and can be activated any moment. Other block size solutions would require at least six to nine months to be designed, fully tested and adopted by businesses.
CT: Does Bitfury have any recent investment news to share?
VV: We recently announced a joint venture with Credit China, which included a $30 mln investment in Bitfury.
CT: What are the plans Bitfury has for the upcoming future? Any exciting projects?
VV: Besides our partnership with the government of Ukraine, we are excited to continue our partnership with the Blockchain Trust Accelerator to source and support Blockchain pilot projects for global good. The accelerator just announced its latest pilot with TechSoup at the US tech conference SxSW.
We also launched the Global Blockchain Business Council in January 2017, and so far, this year we have launched chapters in Washington D.C. and China, with more to come this year.
Finally, in July 2017, we will be hosting our Annual Blockchain Summit on Sir Richard Branson’s Necker Island. This unique gathering welcomes key global influencers in technology, civil society, and innovation to join a riveting discussion about the world-changing potential applications of the Blockchain including, but not limited to, cybersecurity, the sharing economy, voting and land titling.
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