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.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
stacking12321's picture

Yes but namecoin is the dmv registration in the glove compartment of the car, and dash is the Klingon cloaking device that makes the car invisible.

Crypto-World-Order's picture

ETH to the moon bitchez, fuck your s&p, dow jones and nascrap gains.

I love your wife's picture

Just cashed out my ETH investment money this glorious weekend.  About 1/5 of my "stack."  The rest is all house money.

 

Ethereum FUCK YA!

DavidFL's picture

This story is a plant - Putin is not stupid - he knows when the grid goes down this shit evaporates.

Crypto-World-Order's picture

What is it with you fearmongers and the grid. I swear you eat, sleep and shit power grid failure doom scenarios

Scuba Steve's picture

it will the first thing that goes, that way all the little shithead snowflakes cant communicate ...

Incorporated by inference's picture

A block chain is only as strong as its weakest link.

1stepcloser's picture

He knows when the aeigus command and control goes down russia wins

SunRise's picture

and when the nukes go down, PM's evaporate

sudzee's picture

As I see it, JP Morgan and other large financials  no longer have faith in either the FED or it fiat spawn. I think some shit goin to hit the fan real soon. 

Mr.Sono's picture

Russian bobyshki selling dollars for crypto. Got it.....

Mr.Sono's picture

Russian bobyshki selling dollars for crypto. Got it.....

. . . _ _ _ . . .'s picture

Putin speaking at the St Petersburg International Economic Forum plenary meeting:

"Firstly, it is necessary to draft an entirely new, flexible regulatory foundation for introducing digital technology in all areas of life. Importantly, all decisions must be made with due account of the need to ensure information security for the state, businesses and citizens.

Secondly, the state will support those companies that bring with them developments and competencies in digital technology and have a so-called crossover, intersectoral impact – processing and analysis of big data, artificial intelligence and neurotechnology, and virtual and augmented reality technology, to name a few.

Thirdly, we will build support infrastructure for the digital economy, including secure communications lines and data processing centres with the participation of the state and businesses. In addition, I will note that this infrastructure should be based on the most advanced technology and developments.

Fourthly, we intend to increase many times over the number of graduates specialising in the digital economy. In effect, we will have to resolve a broader task, a task at the national level – to achieve universal digital literacy. To do this, it is necessary to dramatically improve the educational system at all levels – from schools to universities. And, of course, we should launch training programmes for people of all ages.

On my instructions, the Government has drafted a programme for developing the digital economy. To underscore, we must clearly determine the sources, mechanisms and scale of its funding. We will discuss all these issues at the next meeting of the Council for Strategic Developments and Priority Projects."

Can't say he didn't warn us.

Mustafa Kemal's picture

Talk about infrastructure development. How is ours going Mr. President?

TePikoElPozo's picture

how do you pay for hookers?

Mr.Sono's picture

You swipe the card between her..... or just tap it.

1stepcloser's picture

They only accept Clinton Coin

gnjus's picture

I prefer CondCoin ... it has much better protection.

Too-Big-to-Bail's picture

Now if Putin meets with Jim Rickards to discuss using Ethereum as a valid digital currerency alternative, please wake me up from my slumber

Dr. Dooms-a-lot's picture

If you listen to Jim Rickards, the Russians have been buying lots of gold.  They could back a digital currency if they find a way to keep the vampire squids from liquidating their gold.

 

Fun fact:  The Russians have very little debt $156B (In dollars)

gnjus's picture

and almost 10% interest rate :)

Catullus's picture

AND REPLACE THE SWIFT SYSTEM

Linda Hand's picture

I remember all the naysayers when the internet was starting out..."My rotary phone and $400 pocket pager do just fine"...well here we are again. The train is leaving the station. You can either stand there and wave goodbye or come on board...whatever you choose, it's on it's way

Scuba Steve's picture

yea, thanks a lot for getting us aboard ... really luv what you've done with the place with all that progression.

Linda Hand's picture

The internet started the progression of which opensource blockchain was a natural outgrowth. The reason the world is currently such a shit show is because the powers that be are jealous of their power and are doing whatever it takes to hang on to it with their proxy wars and hired terrorist militias and market manipulations. Well, it's all coming to the end of the road, they know it and they're scrambling like roaches when the lights are turned on. Crypto currencies are a true free market at work...something we've not seen in our lifetimes, but hopefully a preview of better things to come. It's a direct threat to their monopoly and I welcome the destruction of their system with it's theft through taxation and inflation and their general perversity

Tejano's picture

It's on its way. Where is it going?

Linda Hand's picture

I sincerely hope it's going into a much better future

thisandthat's picture

What I remember from then is all the "pundits" pompously proclaiming it as kingdom come and how it would be forever free, and a "real-life" utopia for everyone and their dog (which everyone on the internet was, at the time...), and how I, fresh onto it, but not born overnight, was totally in awe at the utter naivety of those idiots.

Guess what, couple decades later, and - surprise, surprise! - big money totally owns it and govs all over are trying to control every bit of it... as if you couldn't have seen it coming (well, maybe not you or them, but I surely wasn't so sure)...

Same went for Linux, but I bet this time will be different...

And the last time I pointed this here, I got downvoted like I was trashing someone else's party...

Enjoy your libertarian dreams... while you can.

Sy Kloine Bee's picture

I don't know what the currency of the future will be; I just know that I don't have any.

Boss Tweed's picture

btc is not money neither is eth, its a speculative bet, some kind of asset, but to be fair you said currency and that's different than money; but anything can be used as currency, kidneys, little boys, gold, tulips, real estate in los angeles, tons of cocaine, btc is not fungible, it's hierarchical, is crypto fungible? can it be un-heirarchichal where the 80/20 rule roughly doesnt apply? you know what's fungible? in a democracy, that would be your sanction; your vote

 

 

Crypto-World-Order's picture

Fuck voting, you think that shit matters? Get a clue

Jack Oliver's picture

Trouble with 'crypto' is - you are at the mercy of governments - they label you a 'delinquent' and you can't access FUCKING anything !!

Remember what they did to Edgar Steele ???

tmosley's picture

Dumbest comment I've read today.

Jack Oliver's picture

Downvotes coming from a country where they can remotely put 'child porn' on your computer - you end up doing 10-15 years !

ANYTHING that takes more of your liberty away is totalitarian ! Seems they have you at their mercy !!

USA USA USA !!

You probably still think your 'PIN' is secure !! Once it is in cyberspace - you have NO fucking control over anything !

Boss Tweed's picture

 

 

my initial reaction/notes ala comey: wow! not good!

2ndary rxn: good? eth will hit 1500 by christmas

3rtiary rxn: fuck me i wish i had cash to get in

quadrinary rxn: fuck this crypto shit im gonna stack gold

quintanary rxn: also 80s back issues of hustler and elf quest

sextinary rxn: trumpstein please fire mueller

 

 

 

rockstone's picture

I wasn't aware that the Russians loved tulips so much.

Making Merica Great Again's picture

fuck ethereum

 

we don't need another online fiat

Crypto-World-Order's picture

Who is this we shit? me? Im loving it. Get onboard or get ran over

The Binary Man's picture

Has anyone heard about Binary Option? well, I guess we all have. I know most of us are tired of investing simply because we keep loosing. I have good news. Do you want to make $350-$400 per hour by using binary option. Call me Jerry, I am a trader. I will work with you and teach you my exact strategy. My winning rate is 95%(I could say 100% but allow me sound human lol).. Contact me on jerrylei2562@gmail.com

Secret Weapon's picture

Is binary option like when you cannot figure out if you like boys or girls or both?

OverTheHedge's picture

As I understand it, it is when you lose, you double up the bet, so when you lose that bet, you double again, and before you know it you are down your entire house, the wife has left you, the kids are screaming for food you can't afford to buy, and you are thinking "That escalated quickly".

Is that binary option trading? It's something like that, I'm sure.

Cutter's picture

Didn't see this coming, thought it would be a special gold backed ruble or yuan, but it makes perfect sense.  The ridiculous sanctions regime against Russia, has put them on a blood lust for removing themselves from the US/dollar denominated world order.  China feels the same way.  Neither will leave themselves vulnerable to the capricious whims of the West.  

When this history is written, the politicians and Treasury officials that have wielded our dollar dominance as a weapon, will come out looking as foolish and shortsighted as Pharoah who led his army into the Red Sea seeking the destruction of the Israelites.  

Imagine the life it would give blockchain currencies if Russia announced it would accept such currencies for oil and gas?

Still, Putin, and especially the Russian Central Bank, who have been doing an outstanding job, are smart enough to know that this technology is still in its infancy, and is not yet ready for prime time.  No state will put all their eggs into a digital basket, where a security flaw or something else could destroy their currency in a nanosecond.

But its outstanding messaging, and without a doubt, they will be looking to come out with something to expedite the maturation of blockchain currencies, to hasten the end of the dollar.

 

Making Merica Great Again's picture

bitcoin is people , eth is banks/governments

 

fuck eth

EHM's picture

Yeah and who wins that every time?

malek's picture

yeah just like soylent green is people

2500saturdays's picture

I am working on a blockchain with built in smart contracts ,  no pre-mining , self upgrading, fixed # of coins, unhackable sha 1024 algo that changes every 30 seconds, on the lightening network with the capability of 2000 trannys per pico second, and wait for it ............

allows all the other block chains to 'talk to each other' and convert to / from the other cryptos with no fees, no exchanges , all anonymous, fuck the man power to the people kind of shit !

I am thinking I call it gatecoin or gatewaycoin or portalcoin or trannycoin .

any better ideas for the name cause it has to be snappy as it's all about marketing ya know.