The Potential and Dangers of Russia's coming Crypto Market
The Russian oligarch Dmitry Marinichev and President of Monaco's football club AS Monaco has vowed to attack the market supremacy of Bitcoin. Russian Miner Coin will soon be holding a so-called initial coin offering. RMC says it plans to raise $100 million worth of cryptocurrency. Bloomberg quotes the billionaire: "Russia has the potential to reach up to 30 percent share in global cryptocurrency mining in the future." This might be the political push that is necessary to open-up the largely untapped Russian crypto market.
The country's mining capacity is potentially immense. Consider that electricity is cheaper than in China. Political sway, you ask? Well, remember that this will probably have substantial political support from the Kremlin. Marinichev was appointed as Russia’s first "Internet Ombudsman" in July 2014. He is said to be very close to the administration and has an interesting resume. Meduza wrote an article in 2015 on Dmitry Marinichev's politics:
"Dmitry Marinichev, declared at a recent meeting with Russia's Civic Chamber and scientists that Moscow's only two options in the global technology market are military confrontation with the United States or submission to the existing US hegemony. Given Russia's "historical ambitions" and unique status as the only nation on Earth capable of threatening the United States militarily, Marinichev says becoming a US vassal state is inconceivable for Russia."
Putin has already met Ethereum founder Buterin during the St. Petersburg International Economic Forum in last June (youtube recording, in Russian). Russia is currently working very hard on the drafting and implementation of bills and regulations, including the legalistation of ICOs.
The Russian First Deputy Prime Minister Igor Shuvalov said that the Government is working on the creation of "government centers" for mining cryptocurrency. Indeed, '“we have crypto-adepts in high places,” says Vladimir Smerkis, the co-founder of the Token Fund, a blockchain based investment vehicle for investing in digital assets.'
Russia's crypto potential has not always been exploited. The emergence of Trump and the resultant geopolitical instability and voliatlity in the relationship between the US and Russia seem to have given momentum to the occasion. The Moscow Times reported earlier in June of the kolion crypto that was named after the Moscow region village of Kolionovo. The experiment, originally meant to help poor farmers, was now not a success. The powerful clientalist Russian state intervened and arrested founder Mikhail Shlyapnikov, while local inhabitants were visited by Russian officials (al jazeera video).
The Russian market certainly has lucrative financial potential, but one has to ask the question: at what price?
I think it's interesting that more and more big player - countries, state leaders, banks - are openly talking about the whole crypto market.
I think that is absolutely right, but it calls into question the politics of crypto. On the one hand, we have states attempting to (re)centralise and, on the other hand, we have the original objective and purpose of cryptos: decentralization. We need more politicization of crypto
Hm. Could you elaborate in that last statement? I guess some cryptos could aim at being more decentralized than others. However, on a free market where everyine can buy, it's really hard to control or steer these mechanisms in specific directions.
I meant to say that we, ie. anyone that has a stake in this debate, need to have a conversation about where we want this to go. Maybe we can enforce direct democratic decisions about how many coins one person can own? I am just speculating here, I don't have the solution, but starting this conversation is important for the future.
Yeah. I agree with that. Thanks for elaborating.