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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2500saturdays's picture

sounds like pizzacoin 

lets order some ZOH i got the munchies

who knows ..... i don't

OverTheHedge's picture

ZOH, all capitals ,is actually Greek for "Zoie", which means "Life". Has to be all caps, otherwise it doesn't work.

I think SauronCoin might be a better name - "One coin to join them all, and in the darkness bind them". Seriously cool idea if you can pull it off - crypto clearing house sort of thing

 

 

 

 

 

 

 

SunRise's picture

"working on"  I see what you did.

DEMIZEN's picture

check the domain names prices and availability. the name is useless without .com at the end. if you dont own the .com to it you dont own the name.  

 

ClowardPiven2016's picture

Unfortunately titcoin and tittiecoin are already being used

finametrics's picture

Off topic. Any1 notice the nosed gremlins are getting a bit more sensitive these days? Maybe just me... carry on.

VWAndy's picture

   Hahahaha yes kiddies we are getting played.

   A different magic money aint going to change the game.

BitchesBetterRecognize's picture

Vlad going Crypto?

or is he..?

alphasammae's picture

ethereum? Bitcoin? with all the fees, FATCA passport, and trading restrictions it is a joke!

https://changelly.com/exchange/BTC/ETH/1?ref_id=coinmarketcap

Changelly only allows $200 maximum entry to buy ethereum, what a bore!  I might as well spend the $200 on a steak and wine dinner.

DEMIZEN's picture

the fees are too high for margin trading, if there no brokers to borrow from and buy margins why should I invest my own money? something is off with cryptos.

it does attract the publicity and is worth looking into it. i still dont understand what drives its value. I think is designed by zirpers to fight the main street inflation. you can never run out of greedy fools on mainstreet.

 

adr's picture

Try getting your money out. You'll find $100 maximum daily withdrawal on some exchanges. 

 

DEMIZEN's picture

lol.  like fish getting into trap. making exit plans once in.

opport.knocks's picture

The CB J-mafia owners will not be amused. How do you put a virtual horses head in Putin's bed?

adr's picture

The medium of the transfer of a contract doesn't matter. Two or more parties still have to enter into the negotiation and transfer property or currency. 

Adding Ethereum or some other blockchain tech isn't going to get rid of escrow agents or clerks. You still have laws regarding contracts and signatures needed to validate them. Is the contract just going to come out of nowhere and be binding without anyone signing anything? Especially if it is supposed to be anonymous. 

I never saw the program that created my mortgage, although I know that I paid thousands of dollars for various forms and contracts that were transferred and created. Regardless of the transfer mechanism, I still required a bank to loan me dollars which were transferred to another account. You think the bank is going to reduce paperwork fees or notary because of a blockchain? There is no incentive to reduce fees. 

So far there is no real advantage to implementing the blockchain for anything consumer facing. Unless a transfer through ether is deemed legally binding, it can't replace anything. Maybe the bank uses it to transfer the loan to the other bank instead of using swift, doesn't help me at all. 

What about power of attorney? Is the blockchain going to make that easier? 

Ethereum was successful in creating billions out of nothing, why drill for oil when you can potentially net your treasury billions with digital air. 

Ethereum is going to keep adding 21 million more coins that all need to be tracked. Every single transaction they make. If an Ether splits, each part must be tracked and the original Ether is destroyed. Unless Ethereum can not be split, then you will run out of Ethereum for transfer almost immediately. The price may skyrocket, but with that goes the benefit of using it. 

DEMIZEN's picture

too, withdrawals still subject to income taxes pushing return risk for <<tax bracket>> higher.

ClowardPiven2016's picture

2008 called to remind you that it is now 2017 and technology has advanced beyond your outdated constructs.

Davidduke2000's picture

I never heard president Putin mention this company, it is wishful thinking. Putin is very conservative, I do not see him putting his people into a very speculative rip off grinder.

 

falak pema's picture

Putin is Kaiser Soze...

He can play any game ever invented and is better at setting up booby traps and false trails than the devil himself.

He is the ultimate Prince of Machiavelli and understands better than anybody else the God of Opportunity : Kairos.

Watch and wonder how he will manipulate that magical rug from under the feet of that NAKED EMPEROR : Le Canard à L'orange! 

Like Moriarty of Sherlock Holmes fame, Kaiser Soze is only good at being wicked--in his case with the more wicked than he! --oh the irony ; until he attains his own Kairos moment of triggering his own self fulfilling prophecy.

One day the people of Russia will hang their Kaiser Soze to his own lampost. 

But that story has yet to be written. 

Right now Kaiser Putin is on a rampage, stealing candy from the mechanical Orange Dr Strangelove's head in Mar a Lago sand-dune, absurd, twitter addicted copycat ! 

Maestro Maestro's picture

Putin is owned by the same American, Jewish and European bankers that own Trump and the US Fed.

MaxThrust's picture

After reading this article I did a search for Ethereum and then decided to sign up with Krakan.

I then had to provide Identification and all that which I did but was less enthusiastic by this stage.

Now I am awaiting approval from Krakan to trade but also have had time to think this through. I exchange digital money, USD on my bank's computers for Cryptographically locked digital money on the computers of an exchange at Krakan. All the while I could hold onto my money, wait a little longer and then buy some Silver which I can hold in my hand.

Naaah ..........I will wait a little longer and stick with what I know, PM's

 

Bye the way, the sea monster Kraken use to eat people. The digital Krakan may do the same but financially.

 

scatha's picture

Here is some unbiased analysis of what Bitcoin/Ethereum is and what it is not as well as who it serves as fiat money serves bankers as a tool of massive theft.

https://sostratusworks.wordpress.com/2017/06/01/tales-from-crypto-world-...

salute's picture

The final nail in the coffin of cryptocurrencies?

HappyDeathMetal's picture

clearly the crypto party is now game over

Zero-risk bias's picture

Pooty aside, I believe Bitcoin, Ethereum & the alt. universe are all a net positive in our tek-world. Sure, there will be winners, loosers, cheerleaders and scaremongers abound. Soothsayers all. From what I can surmise is that we are onboard this train and it isn't going to stop anytime soon.

What I like most about this digital innovation in financial markets is that these products are all born out of the ideas that the founding fathers of open-software have left us. Linex, Napster, Pirate Bay and Wikileaks come to mind. In an increasingly automated and indebted society, what other choices are there?

People need to form their own ecosystems, share their own skills, value and information.

Yes, there will be scams. Have been and always will. Headge accordingly.

 

 

onmail1's picture

Why not a BRICS virtual currency

Too-Big-to-Bail's picture

There are certain times in your life when having a name like Vitalik definitely help -- this is one!

Too-Big-to-Bail's picture

Fuck, Goldman embracing Bitcoin and now Putin embracing Ethereum -- can't we jut keep something for ourselves with purity and integrity before it gets whored off beyond all recognition?

Temporalist's picture

I said on ZH that this could happen. Thought it'd be Venezuela or Greece first.

Fr33m3n's picture

Someone said that Google was "crowned" the monopoly or something. They weren't biggest or best, they were just the one that had the majority of its outstanding stock bought by federal reserve shells. And stacked with federal placed staff. And then "got" federal contracts and then spoon fed their name in every media outlet. I think the blockchain would be the backbone for a truly interconnected world community of free people. The trouble is I have seen more humans around the world in self-imposed servitude to animals and closet Neros than I have free men and women. I am afraid a good part of it will either be burnt, butchered, or stay blinded until another 20-30years of old-world rulers and tycoons expire before it could reach its potential. If it can at all. Its no coincidence that they are warning NORTH KOREAN MISSLES are some kind of emp threat right now. I mean, NK probably had 25 working tractors a few years ago, so if western powers were near worth what we pay those retards we should have never worried about them after say 1960. But thats me.

Jack Oliver's picture

'crypto' currency can disappear in an instant !

Russia would not be interested - they got ripped off with the Cyprus 'bail ins' and that was real FUCKING money !

In fact - just yesterday - investors couldn't get out of the 'bitcoin' squeeze - 16% drop in a few hours !

Makes 10% bank 'bail ins' look positively attractive !

Take a look !

https://www.rt.com/usa/392019-bitcoin-3k-coinbase-outages/

bluemaster's picture

Jack cool down mate 16% drop and 1/2 recovered in one session after 300 % run up

https://bitcoinwisdom.com/markets/bitstamp/btcusd

 

vaft's picture

Does nobody get it? How much is a digital currency worth? Nothing. How much is a CB's paper currency worth? Nothing. How much is an infrastructure which allows you to transfer worthless currency from one person to another worth? A FUCKIN' LOT. I love tangible, intrinsic value as much as anybody. But the framework, the ability to MOVE a currency -- quickly and inexpensively -- to millions of destinations, is what the anti-blockchain sentiments don't seem to grasp the value of in a modern era.

Jack Oliver's picture

There will be no need to move it - You will be living in a cabin ( if you are lucky) in the wilderness - Where you life will be consumed by the need for food and water !!

Oil is the ONLY thing keeping you in a job at the moment !!

The wheels of western economies are lubricated with OIL - without it - well - it completely FUCKING stops !!

hola dos cola's picture

At some point I thought the main purpose of a stock exchange was to obfuscate the trail made by the ~all sorts of~ money laundering.

If that intermediate becomes obsolete... ~pause~ All time high after all time high. ~pause~ Can't be far, can it?

turkey george palmer's picture

If you make the assumption Ethereum will succeed to some degree, what does the average person do to stash his wealth in

A place where no exchange or government can interfere with it.

 I mean suppose the exchanges are shut down somehow.

Is there a physical remedy? No

 Would you have a recourse to get reimbursed? No.

Be foolish to trust some online organization to regulate the currency

pizdowitz's picture

The foundation of money is trust. Gold is not money, it is a proxy for trust. Crypto money sits on exchanges that can not be trusted, because their operators are not in it for the long haul.

Only the American FED is in it for a long haul, because it is owned by a group of guys dedicated to a single purpose - total spectrum domination, and, they hope, et perpetuum.

Replicate that...

mrtoad's picture

If only people could put their egos aside and do some hard research on crypto's/blockchain , they may be pleasantly surprised or they may have some good solid sensible arguments against it.

Hillarys Server's picture

Putin will use Myspace technology to develop Facebook?

Why is that bullish for Myspace?

Is a butterfly bullish for the original caterpillar?

denandra's picture

When ethereum was robbed via the DAO before they centrally changed the currency and reversed the transactions.

This means that Ethereum is centrally controlled and can be manipulated. That probably explains why a government wants to adopt that and not Bitcoin, Litecoin or Monero which are decentralised and therefore more robust.

 

I'm sure Ethereum will surpass Bitcoin in Market Cap at some point, but as soon as Bitcoin either solved the fees and speed problem or sidechains are developed for small and quick transactions then Bitcoin will steam ahead due to the trust issue.

denandra's picture

When ethereum was robbed via the DAO before they centrally changed the currency and reversed the transactions.

This means that Ethereum is centrally controlled and can be manipulated. That probably explains why a government wants to adopt that and not Bitcoin, Litecoin or Monero which are decentralised and therefore more robust.

 

I'm sure Ethereum will surpass Bitcoin in Market Cap at some point, but as soon as Bitcoin either solved the fees and speed problem or sidechains are developed for small and quick transactions then Bitcoin will steam ahead due to the trust issue.

Volaille de Bresse's picture

Me no understanding this stuff... and when me no understanding me no investing in said stuff.

 

It's as simple as that.

DelusionsCrowded's picture

Wow . Thats going to give Goldman & Sachs a serious kick in the nuts if it works out . Ouch !

miketv's picture

Nah, Ethereum has become the banksters choice after they failed to take over bitcoin.. https://entethalliance.org/members/