Russia Begins to Play Its Hand in Cryptocurrency Mining

Bitcoin
Photo by BTC Keychain / CC BY 2.0

According to an article on Bloomberg.com, Russian Miner Coin, a company co-owned by one of President Vladimir Putin’s internet advisers, plans to raise the cryptocurrency equivalent of $100 million in a push to help Russian entrepreneurs challenge China in bitcoin mining.

The company is holding a so-called initial coin offering (ICO), where investors will use units of ethereum or bitcoin to buy new RMC tokens. These tokens will have rights to 18 percent of the revenue earned with the company’s mining equipment.

RMC’s plan is to use semiconductor chips designed in Russia for use in satellites in order to minimize power consumption in computers for crypto-mining, according to Putin’s internet ombudsman, Dmitry Marinichev.

This article provides a glimpse into the advancements that Russia is making in the cryptocurrency space. They are seeking to develop what we might term second and even third generation cryptocurrencies, which will remove inherent flaws in current coins. There will undoubtedly be many inside the cryptocurrency and blockchain communities who will disagree with the assertions of the creation of decentralised asset-backed cryptocurrencies. However, that is very much the route that both China and Russia are seeking to take and exploit in this regard. What we understand is that they have already made significant progress in developing these coins and they are likely to be backed by gold. Despite reports to the contrary, Beijing and Moscow are not in direct competition in the cryptocurrency market.

It is never wise to view the development and adoption of future iterations of technical advancement in a given area through the eyes of the current modus operandi. Cryptocurrencies are very much in their infancy currently and are akin to the internet in the early nineties. However, their uptake and adoption in the future will be immense and all encompassing, though probably in ways that few currently comprehend.

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