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How Cryptocurrencies are Changing the IT Industry

| Posted by Eugene Kyselov Follow 0 Followers , reviewed by Sergio De Simone Follow 12 Followers on Feb 12, 2018. Estimated reading time: 12 minutes |

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Key Takeaways

  • Blockchain-related technologies are promising both for business and governments, but their legal status is still evolving across the world.
  • The main promise of Blockchain lies with it being fully decentralized. No one can tamper with completed transactions, and even if someone tries to make up some “fake” transactions, no validators will approve them.
  • The next step in Blockchain growth could be smart-contracts, which offer many benefits to the financial services industry, but Blockchain is going to change the way businesses are managed, how legal transactions are handled, how people can buy and sell commodities and services.
  • We will also see the creation of industry-specific foundations that will release coins and that will be participated by Microsoft, Fujitsy, USBank, Deutsche Telekom, and other big players that are already moving their first steps in this field.
     

Blockchain has taken the internet by storm. Not only has it become the core mechanism of many cryptocurrencies, it has called the attention of the business sector because its potential for use extends far beyond the confines of cryptocurrencies. Unsurprisingly, the uptick in job vacancies for developers with Blockchain development skills continued through the last quarter of 2017. In fact, Blockchain development now ranks the second among the top 20 fastest-growing job skills.

We have taken the opportunity to speak to Eugene Kyselov, Blockchain Software Developer of Mobilunity, to learn about how Blockchain-related technologies are changing the world, particularly in the software industry, and what the community should expect from the job market within the next few years.

How did you start off your journey in software?

Well, my journey began when I created my first MEW wallet. Then I started working on a cryptocurrency project and started learning Solidity at the same time. Solidity is a contract-oriented programming language used for implementing smart contracts on various Blockchain platforms. Due to the fact that language has a very similar syntax to JavaScript I could learn it quickly. Later, I started building my first smart-contract and so on.

As far as I know, you’re working on a Swiss-Hong Kong cryptocurrency project currently. What kind a future do you see for cryptocurrencies and how will Blockchain evolve?

The future is today. Of course, a lot depends on the decision of the authorities and world’s financial organizations. But even today, if the blockсhain technology were applied to state purchases or businesses, I suppose it would significantly reduce the level of corruption and optimize various internal processes. Nevertheless, Bitcoin and smart contracts are not a panacea for poverty and corruption, but thanks to these innovations, people might just live in a future with a vastly improved economy with its lower risk of being robbed or cheated in all spheres of life.

What about the legal void that affects cryptocurrencies in a number of countries?

Consider, for example, Japan - through the PSA (Payment Services Act), the Japanese Government has set up a framework which legalized using cryptocurrencies for payment purposes.

China restricts all official payments with cryptocurrency because it’s impossible to regulate and control the money turnover at the government level. In Europe,  cryptocurrencies generally enjoy favourable Government policies as many nations on the continent are even massively involved in developing Blockchain solutions. The UK and France especially are leaders in this regard. Germany is one of the few countries where Bitcoin is actually recognized as a legal currency. So I I can roughly separate out three categories of countries: favourable, undecided, and unfavourable.

How would you describe the influence of Blockchain on software development and IT providers in general?

I cannot predict the exact trajectory and impact of the Blockchain technology, but we should also not ignore the fact it’s in an early stage of development and its has shown both successes and failures. Tracking this young technology’s development could help us maximize its potential to best serve us.

Figuring out how foundational technologies, such as the Internet or mobile, morph and grow is not easy. New technologies often attract a wide variety of developers, including many freelancers around the world. The sheer number of developers, the types of problems they are trying to solve, and the geographic spread can make it difficult to anticipate where any new technology is headed.

But perhaps the fundamental difference with Blockchain development is that it has largely been orchestrated in the open-source environment. Bitcoin, the original Blockchain system, was born in the open source community.

What could go wrong with Blockchain?

I think nothing can go wrong. Blockchain is fully decentralized. No one can tamper with completed transactions (blocks), and even if someone tries to make up some “fake” transactions, no validators will approve them. The main principle regulating successful Blockchain transactions is that they need to be approved by all validators. Just imagine how the world can be a better place if we migrate all government on Blockchain. For example, elections or government auctions, where all interested people would log in to the system running Blockchain using their own “fingerprint”, or some kind of that.

But this is only one side of coin. This is like a gold rush. Some countries are trying to regulate Blockchain, some countries like Georgia or Japan have successfully integrated it.

Anyway, if something is going to go wrong, I think it is nothing that will happen with Blockchain proper, but rather with coins and tokens based on Blockchain.

What is the next step in Blockchain adoption? Do you see any technical blockers?

The next step in Blockchain adoption is its approval across the world. This would make the integration of  Blockchain technology within government institutions a priority. Also due to the fact that Blockchain is not just the name of a specific protocol – it has become more of a general term –  there is the problem of integrating different Blockchains with each other to process transactions. In my opinion, the next step is smart-contracts. They offer many benefits to the financial services industry. They will introduce even more offline processes into the digital world and can be executed automatically without human prompting or intervention.

How does this trend change the profile/specialization of IT companies?

I’ll try to give answers using few examples:

1. Managing with Blockchain  - I believe that Blockchain will transform how businesses are organized and managed. It allows companies to eliminate transaction costs and use resources on the outside as easily as internal resources. Vertical integration may continue making sense in some situations (for manufacturing controlled pharmaceuticals, for example, or where companies have industry-leading strengths throughout the supply chain). But in most cases, I believe that networks based on the Blockchain technology will be better suited for creating products and services and for delivering value to stakeholders.

2. Human Resources and Procurement - Blockchain will enable organizations requiring specialized talent and capabilities to obtain better information about potential contractors and partners compared to many traditional recruitment and procurement methods. With a prospective employee’s consent, an employer will have access to a cache of information that’s known to be correct because it has been uploaded, stored, and managed on a highly secure, distributable database. For example, job prospects wouldn’t be able to lie about their training or degrees because an authority, such as the university they graduated from, has entered the data on the Blockchain. Tampering with data after the fact wouldn’t be possible: it would involve taking over the entire Blockchain, a nearly impossible task. Individuals would control their own personal data (including birth date, citizenship, financials, and educational records) in a virtual black box. They alone would be able to decide what to do with the information.

3. Sales and Marketing - Just as Blockchain provides a way to obtain information about potential contractors and partners, it will provide an opportunity to learn about the people or businesses who are either current or potential customers. As I have already noted, individuals will control access to their own data in virtual black boxes, which will limit company’s ability to profile customers by tracking and capturing their behavior online. However, the Blockchain will allow companies to engage with individual customers on a peer-to- peer basis.

4. Raising Capital - I believe that Blockchains will also transform the process of raising money. In my view, the Blockchain has the potential to disrupt the way the global financial system works and change the nature of investment. Mindful of this prospect, the New York Stock Exchange has invested in Coinbase Inc., a digital currency wallet and platform company headquartered in San Francisco, California. For its part, the Nasdaq Stock Market is also experimenting with Blockchain technology.

These are just a few examples of the tremendous effect Blockchain can have on IT businesses.

Several experts suggest that every big IT corporation will create its own cryptocurrency for payroll payments etc. What are your thoughts about all of this?

I don’t think that every big company or corporation will do it. There is an outstanding example of such coin called IOTA. IOTA is the first technology that enables true nano payments. IOTA has a collaboration with Deutsche Telekom, Microsoft, and Fujitsu, the Foundation opened up a data marketplace using IOTA technology. It was created as a far related derivation of the Blockchain technology but is far more advanced and already recognized in the innovation-press like Forbes, Techcrunch, International Business Times and Huffington Post. Also, IOTA is based on a directed acyclic graph (DAG) aka the Tangle, not the Blockchain. Here are some differences between IOTA and other Blockchain-based coins:

  1. IOTA has no mining, no blocks, no difficulty.
  2. IOTA has no transaction fees.
  3. IOTA scales almost infinitely, unlike Blockchains.
  4. IOTA is not solely made as a currency but as an interoperability protocol that solves the problems of the IoT.
  5. IOTA wants to enable the machine economy.

In my opinion, in the nearest future, some foundations that will release coins for each industry will be created, and several of the largest IT companies like Microsoft, Fujitsy, USBank, Deutsche Telekom will participate in their development.

Could you name four fields in which Blockchain has been already used or will be used in the next few years?

The first and most common example would be the services we use daily, namely Facebook and Google. Every day, the arrays of our personal data are sold to advertisers and advertising brokers. Another example would be in the gaming industry, where it is increasingly possible to meet the use of cryptocurrencies for the purchase of some features or items on the marketplace, which is carried out through internal tokens. Another place where Blockchain found its place is in the legal and business sphere, where Blockchain is used to ensure the validity of Transactions.

Additionally, Ethereum Blockchain was used for buying and selling of electric power in New York. Owners of households with solar cell panels can exchange their electric energy and pay for services using smart contracts. Each power unit, generated by alternative source, is recorded in Blockchain and supplied to free market. It partially reduces the dependence on energy-supplying organizations and allows efficiently adjusting prices for services

But these are not the only area where Blockchain developers work. I believe that in the near future such spheres as recruiting will be optimized thanks to this technology. For example, candidates can add their profiles to some platform based on Blockchain. This can significantly reduce the possibility of data falsification, allow data collection on the basis of anonymous data, and find a suitable employer for him more quickly.

I’ve checked UpWork a short while ago and found more than 500 vacancies for Blockchain-related projects. Which changes should we expect in three to five years in the job market?

Currently, Blockchain is increasingly being used not only in ICO (Initial Coin Offering), browser games and banking, but also in governments – for example, in public procurement. UpWork (a global freelancing platform) is just the tip of the iceberg; the portal presents freelance vacancies, so in this context we cannot objectively talk about future trends. But despite the fact that the demand exceeds the number of experienced Blockchain specialists, I can confidently say that in one-two years, we will see on such job boards not 500, but 1-2 thousand vacancies.

As demand for Blockchain developers grows, how can the companies cover the personnel gap?

As mentioned above, because of the hype around cryptocurrencies there is an increasing demand for Blockchain programmers. Now, local markets cannot fully cover the need for Blockchain developers.

I see two main solutions to this problem:

1) Build up your own specialists. In this case, companies must hire experienced Java, C, Javascript programmers (depending on what kind of field the developer works with, “Bitcoin-based” Blockchain or smart-contracts like Ether), send them for advanced training, etc.

2) Hire experienced Blockchain developers. This is great but it may get expensive, depending on the country you are in. An interesting intermediate possibility is hiring a developer based in a country where hourly rates are cheaper. My view is quite subjective here, since I may only speak for Eastern Europe, and Ukraine especially, where I spent most of my life working shoulder to shoulder with programmers from Switzerland, Germany, Israel, Ukraine, Russian etc. If your startup can’t afford a programmer for ~$80-$100K a year, you can easily find here a dedicated Blockchain developer at 50-60% cheaper rates than Switzerland or Germany. I find the developers in this region very dedicated and experienced. Here it is totally real to hire a whole team at very good rates you never get in other countries. According to HackerRank, the list of Top 3 outsourcing destinations headed to Russia, Poland and Ukraine, if we consider only Eastern Europe. For instance, Ukraine ranks first in Europe in terms of the number of experienced programmers (90,000+) in addition to quite low rates.

I know you have a vast experience in remote and outsourcing development. Do you think that dedicated remote development is the right solution?

Of course, in my personal experience, this is the optimal solution for any company, regardless of its specialization and product. Today, I see countless stereotypical setups within companies who miss out on opportunities to grow because they are too fearful of, and resistant to change. But what’s the difference between having your meetings with your team in the same room or conducting it via Skype? What really matters are the goals and the results achieved. You can find a local Blockchain programmer, but the main key to success is flexibility: the ability to adapt to change quickly. Full flexibility of all processes can be realized thanks to the Dedicated Development Model. Firstly, you do not waste time searching for experienced specialists, arranging a workplace, and worrying about an overwhelming amount of paperwork. Instead, you get maximum flexibility, huge savings in costs, and the ability to quickly scale up your business.

About the Interviewee

Eugene Kyselov - Experienced Blockchain developer at Mobilunity. Has been programming for 5 years as a front-end developer and 2 years using Blockchain. He has used multiple tech stacks, including Angular 2, Typescript for frontend development and Solidity, Truffle, Hyperledger for smart-contract development.

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Nothing can go wrong ? by Dinkar Gupta

What could go wrong with Blockchain?
"I think nothing can go wrong. "... hmmmm

Ethics? by Andy Bn

It's interesting how you advocate "a future with a vastly improved economy" on one hand and then promote an unfair delocalization model on the other, with fake "made in EU" start-ups.
And since you bring it up, let's mention that Poland is the top recipient of EU development funds, contributed with money from Western member states.

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