Emercoin CTO: Blockchain Is More Important than Exchange Gambling


Emercoin team isn’t dying to persuade exchanges to add EMC, preferring to focus on developing the technological side of the project and implementing Emer-based services in everyday life instead.

It was Emercoin that facilitated blockchain integration in Kolionovo village in Russia, whereas watch manufacturer Raketa used Emercoin blockchain to record authenticity certificates. Can this possibly be only a beginning of a long journey for Emercoin?

ForkLog reached out to Oleg Khovayko, Emercoin CTO, to discuss the project’s specific way of running away from the crypto-trading fuss. Oleg Khovayko also shared his thoughts on the Ethereum hardfork, and told us about Emercoin’s plans for the future.

FL: When did you first hear about the crypto-technologies?

Oleg Khovayko: I’ve been involved in cryptography since I was a student. I used to be a professional cryptographer for a while, I mean I was paid to do that. So, basically I was familiar with cryptographic technologies long before cryptocurrencies. Besides that, I work in finance and IT technologies, and cryptocurrencies are the focal point of all that, so it was something I just couldn’t pass by.

FL: How did you come to the Emercoin team?

Oleg Khovayko: Once I puzzled out cryptocurrencies and their underlying technology, the blockchain, I realized it wasn’t only a tool for settlements, but for many other things. Specifically, when, back in 2012, there was that idea of creating blockchain-based services, including those for security. I also thought about creating my own cryptocurrency and developing an own blockchain, but I abandoned this idea fast since it all looked like buying a horse for the sake of a horseshoe. I negotiated with representatives of different cryptocurrencies after that, and finally there was a mutual understanding with the Emercoin guys. I’ve joined the team and now I’m working on the project’ development.

FL: From what we know, you were involved in the Kolionovo farm project in Russia.

Oleg Khovayko: Mikhail Shlyapnikov, the guy in charge of the Kolionovo farm project, is a rather smart person, so it took me just two hours to consult him, the rest he did on his own. He had to:

  • create an efficient means of payment for interaction with customers and other farms;
  • get investment;
  • get a predictable and stable demand for their products; and
  • to close the seasonal cash shortage.

As for the first task, any cryptocurrency would have actually worked, even Bitcoin. But other tasks required something else that no existing currency could offer. That’s why Mikhail got interested in our DPO (Digital Proof of Ownership) technology ultimately issuing the farm’s shares on Emercoin blockchain. As far as I understand it was our “all services in the same blockchain” approach that has played the crucial role in choosing Emercoin. Using our distributed notariate Mikhail has issued his shares and now he gets investments. Thanks to Emercoin he will be using the same system to distribute dividends and sell products for the full price to regular customers while offering discounts to the shareholders.

FL: In one of his earlier interviews Mikhail Shlyapnikov said that the Emercoin team had paid for creating and storing wallets for the next 10 years. Apart from that, Emercoin is supposed to be explaining the shareholders what buttons they have to press in order to interact with the Emer-wallet. Was that an expensive thing to do?

Oleg Khovayko: Actually, it was less than 20 EMC, or less than $10 at the current market price. You could compare it to the price of issuing securities and supporting a trusted ledger in a traditional jurisdiction.

FL: So was this for the sake of an experiment that you’ve decided to help the Kolionovo project? Or maybe you thought it could evolve into something bigger?

Oleg Khovayko: We see no reason why gentlemen can’t cooperate. Surely, we are mostly interested in practical applications of our products, especially when it comes to farming which is a terra incognita for cryptocurrency projects. Besides that, having a successful reference project is always a good thing.

FL: Those buttons… Are you planning to make your services friendlier to average users?

Oleg Khovayko: They’re not too tricky even now. However, we’re making software to automatize token issuance for an average Windows user. Currently we have only command line PHP scripts. Actually, we used them to create blockchain-based shares for the Kolionovo farm project.

FL: Recently Eugene Shumilov, Emercoin CEO, said your team was close to completing a system aimed at fighting counterfeit goods and copyright infringement. Some agreements with global industrial giants were said to be in place. What are these agreements about?

Oleg Khovayko: Sorry, I can’t say this for now. That’s not just my secret. We have NDA’s explicitly stating that any public activity has to be agreed by all parties. Major players prefer playing it safe: make something first, then show it. Generally, that’s our policy as well.

FL: There were news claiming Emercoin was going to release a cross-platform wallet for both mobile and desktop devices.

Oleg Khovayko: Yes, we have a special team working on that.

FL: What technical or other unique features will this wallet have?

Oleg Khovayko: There will be some. We have abandoned the Electrum concept where you have a public service and a wallet storing the keys on your mobile device. We’re going to have a different infrastructure, mostly relying on distributed cloud solutions. Certainly, our partnership with Microsoft has played its part here. We cannot disclose the new architecture’s details for now.

FL: What about your “joint mining with Bitcoin”? According to Shumilov, miners will be getting EMC as a bonus reward. How does it all work?

Oleg Khovayko: There’s a specification describing how it works. To make a long story short, a Bitcoin block is mined and its proof-of-work is then used to solve Emercoin’s PoW puzzle. Similar mechanism is employed in Namecoin, but Namecoin is a purely PoW cryptocurrency. Since Emercoin is a PoW+PoS hybrid, pure copy-and-paste-the-code thing will not work here. It requires a more serious approach. Besides, such a transition would cause a controllable fork meaning all clients would have to update the software in advance in order to accept the merged blocks. This process requires some delicate approach. So, yes, we’re going to do this, but it won’t happen fast. At the moment we’re switching to the recently released core wallet 0.5.0.

FL: It’s not a big secret that Poloniex has been deaf to the calls for adding Emercoin for a long time. Why do you think this happens?

Oleg Khovayko: They don’t tell us their reasons, so one may only guess. Why this happens? It looks like they don’t need money (the percentage of the turnover), and the $100,000 turnover a day must be too little for them to bother with. Apparently they have other more serious sources of revenue and adding Emercoin would be too insignificant to them. I may also suggest that the company’s decision-makers aren’t acting in the best interest of the shareholders (i.e., trying to maximize revenues). Instead they pursue their own goals, or act on behalf of a third party. And, of course, I can’t rule out pure conceit or foolishness.

FL: What exchanges is EMC going to be listed on in the future?

Oleg Khovayko: It all depends on the exchange owners’ decisions. We’ll be trading at those that accept us, it’s that simple. We’re not seeking to pump up the number of exchanges, neither we are after the turnover increase, which you may see from the project’s forum history. For instance, the very first page reads: “There’ll be no swag. We’re not planning to enter exchanges as long as we can. Ideally, EMC has to be aside from dollar, bitcoin and other currencies, and be traded only for a person’s work time.”

So, if someone accepts Emercoin, we definitely won’t mind, and will provide all necessary advice and be as helpful as we can. Still we don’t see EMC being listed on exchanges as our top priority. We believe that pushing a useless currency to exchanges is similar to putting the cart ahead of the horse. If a useless currency is everywhere, it’ll just be discarded and the turnover will be close to zero. And, similarly, if a cryptocurrency has distinctive features and demand, exchanges will seek to add it without any efforts on our part.

FL: What do you think about Ethereum Classic?

Oleg Khovayko: Classic is a righteous project, and my sympathy in this schism is on its side. But, as far as I know, Vitalik Buterin supports the forked Ethereum. It means that all innovations will be there, in the forked one, and it will be the one that gets the most attention. Classic will always be behind, at least until there’s a Buterin-like personality there that may attract relevant trust and investment.

FL: We had some coverage (here and here) for the Ethereum split…

Oleg Khovayko: Yes, I’ve read both of these articles. Notwithstanding the difference of approaches, they both reflect the same thing, and that is speculators’ expectations. Some just want to “mine and discard”, others believe they are Great Traders and play against each other at those exchanges, blaming others for their fails in the process. What both of these articles don’t tell about is development of functionality or business processes. Generally, I’m not too interested in all that fluff. I’d like to stress that in the long run, like 5+ years, it’s the fundamental factors, not speculative pushes, that really matter. Please note that this exactly what we at Emercoin emphasize. These are the directions we’re developing.

FL: Not-the-fluff is what we actually wish to hear about. Do you have a justified opinion about the events following the Ethereum hardfork?

Oleg Khovayko: If they implement a hardfork any time they discover a bug, we’ll find ourselves dealing with a host of Ethereums. Do you seriously believe it was the Ultimate Error? I personally have always believed that Ethereum is a rather unreliable system that can’t work for anything serious. But it’s perfect for experimenting.

FL: So, what’s the difference between Ethereum and Ethereum Classic?

Oleg Khovayko: The difference is that Classic didn’t roll the blockchain back, as opposed to ETH, to retrospectively cancel the withdrawal caused by The DAO’s error.

FL: Well, this quite obvious. Anything else?

Oleg Khovayko: Both Ethereums are technologically identical. Both are suitable for experiments, and both are equally unreliable as both are based on a revolving-door architecture. I stand for a completely different approach. Ethereum and Emercoin emerged nearly simultaneously, but it’s Ethereum that everyone is talking about now. In the short run, it’s profitable to mine Ethereum, however, its underlying technologies are secondary and hardly applicable.

FL: What projects, aside from Emercoin, do you deem promising?

Oleg Khovayko: Of course, it’s Bitcoin as it has the prevailing cap and is accepted by numerous businesses as a means of payment. Then, there are Bitshares, which are a good basis for divisible tokens pegged to external resources. Their technological approach is also pretty interesting. Even though Bitshares’ consensus mechanism is rather oligarchic than democratic, their technological achievements are quite impressive. In particular, two seconds per a block is a record, I believe. And, certainly, there’s Ethereum. It’s a great platform for experimenting and testing concepts. I’d also mention Dash and Monero, even though I haven’t really dug too deep there.

FL: What are your future plans as to Emercoin’s development?

Oleg Khovayko: We’re planning to extend Emercoin’s functionality, to implement it in real businesses as much as possible, and to increase the demand for it. The main thing here is not to rest on the oars and to keep on evolving.

Our priority is to implement Emercoin in real business. We are discussing things with different organizations, and we are running some pilot projects. We are also working on a new wallet core, and everyone can already see the new release. It should be also mentioned that Emercoin was the first PoS currency to switch to new Bitcoin’s core, 0.10+. Others, as far as I know, still use 0.6.

We also were the first to release a Microsoft Azure app (even though we weren’t the first to join the project), so one may see that we’re capable of doing things and the work is going on.

As for our plans, we intend to add merged mining and other core mechanisms like ATOM. We’re constantly working on new functionalities, protocols and applications as well as on deepening our interaction with real businesses.

Interviewed by Tanya Otter

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