Putin Meets With Ethereum Founder To Create National Virtual Currency

Tyler Durden's picture

Two weeks ago, in our latest comparison of Bitcoin and its up and coming competitor, Ethereum, we said "step aside bitcoin, there is a new blockchain kid in town." Actually, we said that for the first time back in February when Ethereum was still trading in the low teens (the return on ETH since then is roughly 3000%), but the most recent glance provided some perspective on where the competition between the two largest cryptocurrencies may culminate, because according to at least two venture capitalists, the market cap of Ethereum - currently roughly $35 bilion - and whose share of the market has been soaring, will surpass that of Bitcoin, at ~$43 billion although it changes by the second, sometime before the end of 2018.

Two things: first, at the current rate of gains in Ethereum market share (and loss in Bitcoin's), the inflection point between the two will come not in months, or weeks, but perhaps days.

Second, said inflection point may come in even faster if Vladimir Putin has anything to say about it, because as Bloomberg reports, "Ethereum has caught the attention of none other than the Russian president as a potential tool to help Russia diversify its economy beyond oil and gas." Putin met Ethereum's young founder Vitalik Buterin on the sidelines of the St. Petersburg Economic Forum last week and supported his plans to build contacts with local partners to implement blockchain technology in Russia, according to a statement on Kremlin’s website.

Speaking at the Economic Forum, Putin said that "the digital economy isn’t a separate industry, it’s essentially the foundation for creating brand new business model" and discussed means to boost growth long-term after Russia ended its worst recession in two decades. As explained repeatedly over the past 6 months, besides being a method of exchange, Ethereum is also a ledger for everything from currency contracts to property rights, speeding up business by cutting out intermediaries such as public notaries. It also does not suffer from some of the size limitations that have paralyzed bitcoin in recent months.

Furthermore, just like the western Enterprise Ethereum Alliance which consists of JPMorgan, Intel, Microsoft and other leading blue chips, Russia’s central bank has already deployed an Ethereum-based blockchain as a pilot project to process online payments and verify customer data with lenders including Sberbank PJSC, Deputy Governor Olga Skorobogatova said at the St. Petersburg event. She didn’t rule out using Ethereum technologies for the development of a national virtual currency for Russia down the road.

Adoption of Ethereum in Russia has been brisk also in the private sector: last week, Bloomberg reports that Russia’s state development bank VEB agreed to start using Ethereum for some administrative functions. Steelmaker Severstal PJSC tested Ethereum’s blockchain for secure transfer of international credit letters.

Blockchain may have the same effect on businesses that the emergence on the internet once had -- it would change business models, and eliminate intermediaries such as escrow agents and clerks,” said Vlad Martynov, an adviser for The Ethereum Foundation, a non-profit organization that backs the cryptocurrency. “If Russia implements it first, it will gain similar advantages to those the Western countries did at the start of the internet age.”

What about price targets? Pavel Matveev, co-founder of Wirex told CNBC today that Ethereum could reach $600 by the end of the year, leaving bitcoin in the dust. Until just a few short weeks ago, such a forecast would seem ludicrous. However, considering the recent surge in ethereum prices - recall it hit an all time high of $412 earlier today before sharply dropping then again erasing virtually all losses - it may reach that particular target in just a few weeks.

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Implied Violins's picture

WTF??? et tu, Putin, with the One World Currency?

Shemp 4 Victory's picture

Seems more like a One Russia Currency rather than One World Currency.

I can also see it as a potential alternative to SWIFT.

Kafir Goyim's picture

It wouldn't actually be Etherium.  It would be a seperate blockchain, based on the Etherium code, which doesn't help current bag holders.

To understand why Etheriums rise is artificial and will end badly, read this.  https://medium.com/@WhalePanda/i-was-wrong-about-ethereum-804c9a906d36

Sanity Bear's picture

LOL, this is EXACTLY what I predicted would happen because there is effectively ZERO barrier to entry for any entity with sufficient resources to set up its own infrastructure, including not only countries but also countless banks.

Anyone hung up on the magic of the blockchain is in the completely wrong frame of mind. If one system can create a blockchain, so can another. The only thing necessarily unique about BitCoin is its name. Personally I thought EgressCoin was more fitting, but hey that's what they chose to call it.

Quantum Bunk's picture

That's bullshit. Anyone can create a search engine too. Anyone can create an oline store to compete with Amazon. But that doesn't chnage anything. 

Somebody will win the defacto monopoly prize just like Google did. 

EHM's picture

And Google got no funding? I prefer using the term "limited barriers to entry". Google has a trade secret. Only they know how the algorithm really works. What's Bitcoin have? Basically first to market. That's it!

SMG's picture

There already is a great national currency, it's called gold and silver.  And you can't create it out of thin air like all these crypto-currencies.  If you disagree with me please sell me your house and all possessions for the newly valuable SMGcoin with Blockchain!

Crash Overide's picture

Haters gonna hate, I remember bulletin boards, warez on MIRC fserves, and all kinds of fun FTP's average people had no clue what was going on... but hey everyone fling shit at the new blockchain tech, it's tulips, bubbles and unicorns right?

Whatever, hedge accordingly bitchez.

 

SMG's picture

Bottom line.  Crypto-currencies are fiat and will always be so no matter how many Guy Fawkes masks you paste all over it.  One day we all must come to accept that truth and reality will have to be faced.

tmosley's picture

>I don't know what the word "fiat" means, but people don't like things that are fiat, so I will just use it to nonsensically support my shitty position

Ok.

manofthenorth's picture

fiat;

An arbitrary order or decree.

Bitcoin and youname-it coin do not hold a position on the periodic table so they are still a utility and should not be confused with silver and gold which are elemental and therefore hold NATURAL intrinsic value.

2500saturdays's picture

neutron proton electon thing 

not an on / off thing.

MillionDollarButter's picture

It is a smack in the face of the credit companies who want to abolish untraceable decentralized money.  If they hate cash, they are certainly going to hate the currency type that breached the financial walls China recently tried to put up.

MEFOBILLS's picture

There is nothing arbitrary about making bank money good for paying taxes.  Bank money is legal tender by government law.

inconvertible paper money made legal tender by a government decree.

Making bank credit good for taxes was a specific goal of banksters, which came true for them after Federal Reserve Act.

BTFDemocracy's picture

Fiat currency definition: Any money declared by a government to be legal tender. State-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard.

stacking12321's picture

Nice try, but you should have said currency, not money.

State issued money is an oxymoron.

States do not issue money, they issue debt notes, which are passed around as currency.

Money has several properties as outlined by Aristotle thousands of years ago; one of those properties is scarcity.
Gold has the property of scarcity.
Dollars freshly printed on a printing press fail the scarcity test, they are valued by decree (fiat) only, they have no real worth.

Gold is money.

The dollar is merely an iou note from your deadbeat Uncle Sam.

MEFOBILLS's picture

Nice try yourself:

Here is Aristotle's definition.

http://www.monetary.org/economics-as-a-science/2010/12

(Aristotle was for legal money; he would have been against banker fiat.  It is important to define you "fiats" most people here just sling the word around and have little understanding.)

 

Aristotle defined money 2400 years ago: “All goods must therefore be measured by some one thing…now this unit is in truth, demand, which holds all things together…but money has become by convention a sort of representative of demand; and this is why it has the name nomisma – because it exists not by nature, but by law (which in Greek was nomos) and it is in our power to change it and make it useless.”

So Aristotle identifies money as a creature of the law -  an abstract social institution. Its essence is not tangible wealth, but a power to obtain wealth. This distinction between money and wealth is crucial.

Plato agreed with Aristotle and advocated fiat money for his republic:

stacking12321's picture

And nice try for you, too.

The law?

The so-called law is made by fallible humans, greedy and corrupt, and I tend to dismiss their declarations, especially those by central bankers trying to tell me what money is.

if a country can print it on a printing press, (or add digits on a computer), it is not scarce, it can be debased at will, and is therefore not sound money.

Even j p Morgan knew: "only gold is money, everything else is credit"

Frederico's picture

Money has to flux in direct proportion to goods and services.

This is an iron-clad law, and gold cannot perform this function, as proven amply by history. Calling metal as money is like calling numbers as metal.  This has no basis in reality.

During the depression bankers wanted gold instead of their former banknotes.  This is called an uneven swap, and is a form of usury. As usual our friends were behind this sort of maneuvers, as gold has always been good to them, ever since the East/West caravan routes.

Also the Roman Empire used fiat legal money, which lasted until the second Punic war. It was then that Rome converted to precious metals, and that was their end.

Value of gold is gone if government decides to confiscate - rule of law is the standard.

The places that have retained currency value over history had unsurpassed rule of law to back that – like Switzerland.

 

JethroBodien's picture

This is where the rubber meets the road as far as new world order is concerned.   http://id2020summit.org/

Ethereum will help satify the economic component of world wide identity system.

 

Addtional detail if the above link peeked your interest.  It probably should since it literally concerns everyone on the planet:

https://www.linkedin.com/pulse/blockchain-2-billion-people-un-backs-id20...

https://bravenewcoin.com/news/id2020-held-at-the-united-nations-features...

https://cointelegraph.com/news/id2020-how-blockchain-could-be-used-to-so  

open calender's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... http://bit.ly/2jdTzrM

quadraspleen's picture

You an ETH margin trader, brah?

Quantum Bunk's picture

That's bullshit. Anyone can create a search engine too. Anyone can create an oline store to compete with Amazon. But that doesn't chnage anything. 

Somebody will win the defacto monopoly prize just like Google did. 

WTFRLY's picture

It's a Joo World Order  and we are just living in it

Luc X. Ifer's picture

Yo, stop thy horses - idiot. Putin is a true, genuine leader caring about the future of his nation, well, accordingly to the local customs and habits however, nevertheless much more than Western European or North American pseudo-leaders - puppets of the globalist fascists, do. Same as the Chinese, that's why they are ahead now of America and Europe in adopting latest new advancements in science and technology.

https://www.wired.com/2017/06/ai-revolution-bigger-google-facebook-micro...

https://www.nytimes.com/2017/05/27/technology/china-us-ai-artificial-int...

Perimetr's picture

how much will all these crypto currencies be worth when every nation and every bank and every tom dick and alphonso have created one?

Maybe if one of them is gold-backed?

Gaius Frakkin' Baltar's picture

They'll always be a need for a cryptocurrency which falls outside the jurisdiction of any government and thus it will have value.

EHM's picture

Sure but only for the few. Most people don't have a clue to what you are even talking about.

Luc X. Ifer's picture

Yeah, FYI, less than 200 years ago most of the people where illiterates and barely knowing to do the basic arithmetic like addition and subtractions with 2 digits.

jaxville's picture

  Excellent point.  Crypto currencies have value and will be with us for many years going forward.  It is the price of them I have an issue with.  For now I will stick with gold.  I am certain that I will be able to obtain any crypto currency for gold in the future should I need some.

Crash Overide's picture

Semi organized decentralization...

Power to the people.

Luc X. Ifer's picture

Your statement clearly exposes you as completely ignorant in the subjects of blockchain, e-currencies and the derived, modern economy resulting from these new technologies.

Exalt's picture

Who said government is going to tolerate competition? The latest block chain may have use much like a movie streaming site. It's good for as long as people know about it and it isn't shut down - i.e. Is hosted in Iceland or something.

USofAzzDownWeGo's picture

Might wanna take a look at this brokski. The leader of the country that was massacred by zionists..... biggest holocaust(bolshvik revolution) in history against his people... defends the people who massacred them? 

 

http://forward.com/news/breaking-news/197664/holocaust-deniers-in-russia...

jaxville's picture

  Actually Putin called out a gathering of Rabbi's for the role bolsheviks (Jewish communists) played in the deaths of many Russians.  He said they have much to atone for.  The law you reference is against spreading falsehoods and profanity. 

  The truth is that the Germans killed many Russian Jews because they were the ones who ran things in the towns and cities liberated by the Nazi's.  I am not sure whether or not the law would apply to someone pointing out the fairy tale of Auschwitz.  It would most certainly apply to someone denying the deaths of Russian Jews at the hands of the Nazis.

  I like the idea of prohibiting the media from using profanity and/or gratuitous violence or sex.  It is one of the reasons I stopped watching TV over a decade ago.

jialins's picture

the logic doesn't add up. They are not comparable. Think about it

explosivo's picture

You dismiss the power of the network externality. 

WhosJohnGalt's picture

You sound very desperate.

Let me guess all in on BTC -- and you want to talk about bagholder?  lol

Anyway, things like the Enterprise Ethereum Aliance, Russia, and Singapore ALL help Ethereum in the sense that it helps validate the tech, regardless of whether they run private, permissioned versions.

Also, much of the work they do on those verisions can and will flow back in to the main code repo.

But don't let the facts stand in the way of your shilling and FUDing.

Kafir Goyim's picture

Yep, I'm sure that "the work they do on those versions will flow back to the main code repo".  That's how open source is supposed to work.  You get a gold star for pointing out what everybody already knew was supposed to happen.  (Will bad old Putin actually do that?  Stay tuned and find out!)

However, it's important that people are told that neither Russia, nor any of it's banks, nor any other bank, is going to be on the public Etherium blockchain, so those people don't rush to buy it for no reason.   These institutions are all implementing their own, private blockchains.  Why are you so butt-hurt that I provided people with that information?  Who's the real shill, bitch?

WhosJohnGalt's picture

Nobody fucking cares if they're going to be using the public chain or not. It's all about validating the usefulness and applicability of the tech.

You're just butthurt that you're bagholding the tech that's being chewed the fuck up by the new kid on the block -- the fucking ETH/BTC ratio is up 30% today alone.

And even if it were your precious BTC, which isn't even capable of functionailty like this, it still wouldn't be on the public chain.

Go shill somewhere else, bitch.

Kafir Goyim's picture

Nobody fucking cares if they're going to be using the public chain or not. It's all about validating the usefulness and applicability of the tech.

OK sweetheart.  Let's talk about "the usefulness and applicability of the tech", shall we? 

What has actually been done on this mighty crypto engine?  Oh yes, a shit-ton of "Initial Coin Offerings" of various shit-coins, which are burning all the available ETH and causing the price rise.  But what else has been done?  That's right, nothing that we should speak of.

Now, that's not to say that it's not a clever piece of engineering.  It is.  But shills such as yourself need to take your money and run away very fast, because this bubble is not sustainable.  It's fueled only by lack of liquidity caused by a ton of shit-coins using the ETH token for their own ICO's, creating artificial demand.  It's also troubling that even the issuance of those tokens is enough to slow the Etherium network to a crawl.  If it can't handle an ICO, how can it handle actual real-world use?

BlindMonkey's picture

"Imagin there's no Visa

It's easy if you can

Imagine all the people

Transacting without the skim"

 

 

Maybe I'll finish it if anyone cares.  

Tsipras the Great's picture

Once the coins have all been mined, what will be the reward for the miners to keep the transactions going?

Oh... a fee

Bunga Bunga's picture

Exactly, it will be a blockchain version of the very same shitty fiat currency, which gives the government even more power. The central bank can create as many coins as they want as well as they can remotely shutdown your coins, if they think you are a terrorist, a criminal, a tax evader, a money launderer, a political opponent or they simply need your money to bail out the banking system. If it's up and running they will abolish cash and then you better have converted your life savings into gold and bitcoins.

BlindMonkey's picture

No escrow

No swift

No Visa

No Master Card

 

 

Yeah man.  There are huge benefits.

Exalt's picture

No privacy, no alrernatives, no freedom, no tax avoidance. Sounds like a ripe old time. /s

Justin Case's picture

Gold for me. It's a store of value and bitcoin is a utility, which gold can buy, like fiat, when it loses it's ability to be a utility it returns to it's intrisic value.

thisandthat's picture

Exactly, there's ZERO chance Russia (or any other central banks, for that matter) will use third-party "coins"; they'll create and control their own, at best basing it off another, and that's it. You people can keep dreaming...

shizzledizzle's picture

Good article. I like the part of them selling ETH to get fiat to fund the projects. Wait... if blockchain is so valuable why the need to convert it to fiat for funding?