Interview about how atomic swaps are making the real-life usage of utility tokens easier and faster for everyone. Answers from Konstantin Khludnev, the founder of GO Cubo Lodge Club!
Hi, Konstantin! Can you tell us about your previous experience as well as your current project?
I am 36 years old and I started my working career about 15 years ago. Regarding the project, I want to begin with a small introduction if you don’t mind.
Everything began in 2016 after I had left the position of CEO at PJSC “Yamal-Povolzhye”, who planned to construct a very large processing plant and a 3,000 kilometer petroleum pipeline. The total cost of the project was estimated to be about 10 billion USD. In fact, this was a wonderful and effective project which could provide more than 15,000 new jobs, and it would allow Russian enterprises to gain access to valuable petrochemical raw materials and independently produce high value-added products. Working with this company gave me a lot of new business and friendly ties, as well as experience.
After this project, having reviewed the prospects for cooperation with various government bodies, I started developing several of my own commercial ideas. So my team and I created an industrial 3D printer that I called Macan3D and a mobile house CUBO. On the basis of CUBO houses, we are planning to create a network of 2,000 houses located in at least 10 of the most popular travel destinations. Also, for the management and interaction services of club members, we are going to create the GODEX Platform, an application that supports atomic swaps. For the platform, we aim to attract 5 million users in two years.
In the future, we also plan to create a small smart city based on CUBO houses where all lovers of the digital industry and related areas could develop their projects. I haven’t yet thought of which government to approach with this proposal, but I think that colleagues from the world of blockchain will share in our ideas.
How did your first acquaintance with the blockchain happen?
I learned about Bitcoin and blockchain technology superficially back in 2011, but I began to study and reflect on the real application in more detail in Spring 2017. As I studied I began to understand the principles that are laid out in this technology and the new opportunities that it opens up. And now, thanks to these studies, I finally found a solution that would allow me to create CUBO houses on the scale that I set myself as a goal.
Tell us about the concept of your current project?
GO CLC is a club where each member gets free access to any CUBO house connected to the club. We offer landowners the means to create their own small business. For example, one owner places eight houses on his plot, which the members of the club will use based on their membership, and in return GO CLC gives that owner two additional houses for temporary use. So he gets ready business with regular customers. According to preliminary calculations, this microbusiness from the deployment of just 10 houses can bring about $100 thousand a year.
Implementation of blockchain allows us to:
• Control the rights to access the accomodations
• Control the rights of dwellers
• Use the voting process to decide the location of new CUBO houses
• Create a reliable system of reviews
GO utility token reserves the rights to access the smart locks of the token holders. Our system differs from the common practices of accepting tokens as a payment; in our model members reserve rights to access the CUBO houses based on the amount of tokens they have.
Regarding security, we plan to use the solutions of slock.it, who have noteworthy experience in smart homes. All CUBO houses are protected by smart locks that only give access to the members of the club.
What pitfalls are waiting for an entrepreneur who wants to integrate blockchain solutions into his or her business?
Basically, everything depends on the business and on what processes it is necessary to integrate the blockchain into. The liquidity of staff is the most probable issue. I see an imbalance due to the growth rate of those wishing to implement the blockchain versus the speed of appearance of new trained developers able to program the necessary architecture, since current developers already have a high workload in existing projects. Perhaps there already exists solutions on the market that can be used for this. A huge amount of information can be found on GitHub.
What is the approximate cost for organizing an ITO/ICO?
The organization of an ITO bears great costs. I will not say that these are millions of dollars as I often hear from different colleagues, but it’s certainly more than 100 thousand. Many expenses can be reduced by the team’s competence. For example, we have a person on a team who has a PhD and deals with legal issues. As far as I know, these works would cost us about $100k and would probably not be better in quality. The cost of expenses largely depends on the concept of the project, and we estimate for ourselves that the share of the budget for marketing can be more than 50%. For us, the priority markets are the US and Canada because such a format of houses like CUBO, as well as the format of the club itself, will be in highest demand there, according to our research. As a result, the cost of marketing is higher for these regions.
The advertising market for ICOs vary greatly and prices do the same accordingly. In December we have been focused on Facebook, but now they block ICO advertising. We work with several funds, we have chosen several specialized media publications, and we decided to conduct live webcasts on social networks as they allow us to bypass the algorithmic tape on Facebook.
Tell us more about your CUBO houses. How does a smart lock function?
CUBO is a relocatable house that does not require any standard fastening systems to be assembled.
It consists of durable, insulated panels of cassettes that are tightly fastened to each other by a lock. We have created several sizes of houses that are most suitable for the format of club recreation and rental businesses, but the design and the fastening system have been so successfully developed that it allows us to create buildings of almost any size. Everything is very simple and reliable!
The electronic lock is generated with its own individual address that is entered into the distributed registry when added to the GODEX Platform. It contains various information about the object, the manager, etc., including the information about the location on the map. When the user selects the house he or she wants to use, the smart contract sends the encrypted command to the smart lock address that identifies it to gain access. It also sends reservation parameters information. We plan to use locks of various brands that support the necessary parameters for connecting to the GODEX Platform. We will certainly use the market leaders, such as August, who have a wide network of technical support and service in the countries where the homes will be installed (a demonstration on the locks from the August company can be seen here). In the future, the GODEX Platform will allow anyone to add their own CUBO homes to run their own rental business using a franchise model. They can even lease any other real estate with access control based smart locks. And for renting your own property you will simply need to order a smart lock from our partners, install it on the front door, and register this object in the GODEX Platform registry.
Do you offer the exchange of your tokens through atomic swaps? How and why did you come to this decision?
For our project, the availability of a tool for the free purchase and sale of tokens is key. It is unlikely that someone is delighted with such procedures and mechanisms of buying through the exchange, especially when we are talking about the real usage of tokens in any system. I have nothing against the exchanges; on the contrary, they form and develop the market. But at the same time I am convinced that the availability of token liquidity only on exchanges makes the development and adoption of the cryptocurrency much more difficult.
I became interested in the technology of an exchange without a third party called an atomic swap. It has, in my opinion, the key advantage for using cryptocurrency in a real sector. I concluded that there is no greater strength in any blockchain than in their union! The possibilities are endless.
Atomic swaps allow you to exchange cryptocurrencies between users without the participation of a third party such as an exchange. This means that if the token supports this function based on a smart contract, then its availability and liquidity significantly increases. I became a fan of this technology and began to study everything available about the subject. It turned out that few people have implemented it, and mostly on the scale of a single blockchain. A good example is the 0x project with the ZRX token that allows you to exchange tokens on the Ethereum blockchain.
Having understood this issue, I have attracted a team of developers who are competent programmers and are able to integrate such smart contracts. By now, we already have a successfully tested smart contract for swaps between Bitcoin and Ethereum. Therefore, we decided to add atomic swap support to all possible blockchain systems with our GO ERC-20 token.
Incidentally, I was recently offered the collaboration with the founder of Zcash Co., Zooko Wilcox, at a conference in Moscow. He is very interested in atomic swaps, and we agreed to conduct a test transaction between Zcash and our GO ERC-20 token. We have also sent similar proposals for cooperation to several other companies who create their own protocols, and we are sure this will bring us great success.
There is an opinion that, given the 10 years that the blockchain has been around, a solution to many of the problems that were originally posed back then have not been achieved – do you agree? Why?
It is obvious that this is the case. As the technology was presented and implemented more optimal methods and approaches appeared, and it will take knowledge and time for the development of these new methods to solve these persistent problems. There is no limit to perfection! I admire those people who, despite everything, continued to work on what we have today and who were able to convey this to the masses so that we could study it further and apply it to everyday tasks. For me, this is an example of how the idea of one person turned into a global and impactful industry!
What are the most interesting blockchain cases that you know of?
A lot of new projects appear regularly, but it’s impossible to immerse yourself in everything. I have a lot of respect for the Slock team: they have a lot of experience and key knowledge as they stood at the origin of Ethereum. The concept of the IOTA project is also very cool. These teams are making big leaps in the development of IoT. In general, I believe that integration with real businesses can shoot up very soon, due to the level of understanding of the blockchain as well as the fact that confidence in this technology is growing at an increasing rate.
Skills needed and hot tasks
What should managers from the “classical” industries, who wish to begin their own startup, be prepared for?
There is a target audience in each industry, and it needs to be clearly understood that the clear majority of that audience are not experts in the field of blockchain technology or the legal issues associated with its implementation. You must be prepared to face a million reasons why this will not work. You must be prepared to deal with all doubts about the possibility of achieving your goal. There will be a lot of advisors who’ll say that something will not work, and there will be several critics who will tell you that the idea is stupid. Therefore patience, self-confidence, and dedication are very important here.Patience, self-confidence, and dedication are very important in the startup world. – Konstantin Khludnev Click To Tweet
Where did you go to educate yourself about the blockchain? Any particular courses, websites, or blogs?
Actually, you guys here are a resource that I am happy to recommend. It is always interesting to read your articles! You’ve got exclusive and reliable information that is issued regularly. Many people simply copy one piece of news and paste it to their own site, but you guys don’t.
I got all of my knowledge about the blockchain from several publications on the Internet, selecting the information most valuable for me. I usually do the following if I want to figure something out: I clarify all the words that I do not understand, and there are usually several words that need to be clarified with a dictionary. And you must clarify everything until it is completely understandable to you. It is also useful to periodically draw out how things interact with each other. Also, you can find good people on blockchain meetups who will help to understand certain principles better. I’m truly lucky in this regard, and I always meet wonderful people who are professionals in their business!
What advice would you give to those who only plan to bring their company to ICO/ITO?
I recommend trying to unite with existing projects because such cooperation could bring about a synergistic effect, and everyone could oversee their direction. This would help to create a more sustainable infrastructure for the future. For example, we have applied the support of atomic swaps, which makes partnerships with other cryptocurrencies natural and mutually beneficial, as this increases liquidity. Let’s say that I have the BNB token, but I can only apply it on the Binance exchange. However, with swap support I can exchange the GO token and get real value from it. Therefore, such unions form the market and stabilize the position of the entire crypto community.
For our part, we invite other blockchain projects to collaborate with us, and we are ready to provide access to a private repository on Github to test the atomic swap between BTC-ETH addresses upon request!