Home NewsBlockchain News

Follow us on Twitter or join our Telegram

Blockchain in Action: Bitfury helps to Boost Ukraine’s Budget

Blockchain in Action: Bitfury helps to Boost Ukraine’s Budget 101
Source: iStock/gregory_lee

The deployment of blockchain technology in partnership with a state-run company allowed to boost the proceeds from auctions of seized property and land leases in Ukraine.

In the first year of the implementation of the technology, SETAM, a state-owned company, held 12,338 successful auctions with a combined total worth exceeding 2.5 billion hryvnas (USD 89 million). Using blockchain solution, provided by the London-based Bitfury Group, a blockchain technology company, has allowed SETAM to raise the auction prices, encouraging the technology’s deployment to land lease auctions, according to Viktor Vyshnov, the chief executive officer (CEO) of SETAM.

"The average growth of prices changed from 12% before blockchain to 18% [after the technology was deployed]. In September 2018, SETAM launched cooperation with StateGeoCadastre on a pilot project [related to] land lease auctions. In October 2018, the first electronic land lease auctions took place. Nine out of ten proposed lots were sold with an average increase in yearly lease payments [at the level of] 34.3%. The lease payment for one of the lots exceeded the state normative evaluation price of that land," Vyshnov told Cryptonews.com.

According to him, using blockchain has significantly increased the public’s trust towards the system.

Blockchain in Action: Bitfury helps to Boost Ukraine’s Budget 102
Viktor Vyshnov. Source: SETAM

"In September 2017, we held the first electronic auctions in the world with the use of blockchain technology. The same day, we announced the rebranding and began to provide services to our customers under the OpenMarket trademark. From the very beginning of the use of blockchain technology, we experienced a considerable increase in the level of trust to our system of electronic auctions. This has helped us to increase the amount of participants and we launched cooperation with many local authorities and banks," Vyshnov said.

The auction data is fixed on a blockchain developed on the Bitfury’s Exonum platform, and each participant obtains a unique hash to check the information about their bid at the auction website, according to the CEO.

"This made the process truly transparent. The data copy is stored in a network of 4 independent servers [that are] blockchain nodes. The connection among the servers is ensured by a special protocol, which provides the auction with the reliable protection, even in the case of an attack or partial equipment failure," Vyshnov said. "The information is regularly copied to the public blockchain. This prevents the possibility of the information changing, since any attempts of the blockchain-nodes collusion would be obvious thanks to the principle of the system operation. An independent auditor, East Europe Foundation, monitors the process. The system [can] also be verified by other auditors."

A video by the Bitfury Group explaining state auctions on the blockchain:

Other projects

Meanwhile, the Bitfury Group continues to expand its portfolio of international projects, as a rising number of state authorities look to establish partnerships with blockchain technology providers to introduce more transparency into their real estate and property management systems.

A number of the company’s activities are related to introducing blockchain-based solutions into real estate and property management systems worldwide, such as Bitfury’s projects in Georgia and Ukraine where the firm is partnering with local authorities, as reported by Cryptonews.com. Georgia’s National Agency of Public Registry (NAPR) has asked Bitfury to develop blockchain solutions to enhance the flow of information within its property rights records system. The project is to bring transparency to transactions, and encourage public trust regarding the agency’s actions.

"After the successful first phase of the land titling project with the NAPR, Bitfury and the NAPR undertook a full review to assess the success and areas of growth for the land titling pilot. We soon expect to announce the next step of this project with the Ministry of Justice and Bitfury, which will bring blockchain to the property transfer process," John Mercurio, the acting Chief Communications Officer at Bitfury, told Cryptonews.com.

Follow us on Twitter or join our Telegram

More Stories