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a leading innovator. Blockchain is so new no one has a lead and the whole of Eastern Europe has embraced virtual tech so completely it is already holding its own against the developed world.
Ill with interest
This year’s St Petersburg International Economic Forum (SPIEF) is where the Kremlin’s commitment to blockchain became obvious. Those in the industry say they suddenly started getting calls from the Kremlin ahead of the event, pestering them to attend Russia’s pre- mier business showcase.
Government officers who were uncon- vinced by blockchain before SPIEF (or simply had never heard of it) were not afterwards. The blockchain panel ses- sion made it clear that developing the technology is now top of the Kremlin’s priority list.
“Blockchain is now the number task,” first deputy Prime Minister Igor Shu- valov said at the session, probably the third most powerful man in Russia. “The president is completely ill with this idea and understands that the gap and significant growth rates are based on the digital economy and technological leadership.”
Shuvalov told journalists the president had kept advisors up until well after mid- night one evening discussing the issue. Now Shuvalov has been put in charge
of the working group to make it happen. The first meeting was held in July. Shu- valov is reportedly focusing on big data and lobbying for the introduction of the technology in public procurement and the provision of public services –
a theme common to all the governments in Eastern Europe (see related piece). The central idea is to remove officials from the process and hence the source
of corruption and inefficiency.
But it is still very early days and the blockchain’s currency, bitcoins, are barely in circulation. Russia’s state-owned
retail banking giant Sberbank reportedly has a coffee machine in its lobby that accepts payment in cryptocurrencies. Last year Russia’s first bitcoin exchange point opened on central Moscow’s Novy
Vitalik Buterin
bne IntelliNews
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The 23-old Buterin is the inventor of Ethereum, bitcoin’s main rival and the world’s second most popular cryptocurrency. To highlight the enthusiasm with which the Kremlin has welcomed this happy coincidence, Russian president Vladimir Putin invited Buterin to this year’s St Petersburg International Economic Forum (SPIEF) where the president positively gushed over the coinmaker.
“Ethereum is the potential tool to help Russia diversify its economy beyond oil and gas,” Putin said during a photo-op with the rather geeky looking software engineer.
After meeting Buterin, Putin said that “the digital economy isn’t a separate industry, it’s essentially the foundation for creating brand new business models,” critical after Russia’s recession.
Buterin was born in Kolomna in the Moscow Oblast but moved to Canada with his parents when he was six where he studied computer science for which he showed a particular talent.
His father introduced him to bitcoins when he was 17 and the first money he ever earned was paid in bitcoins for an article he wrote about them. But his literary output quickly became more serious, publishing a whitepaper in 2013 outlining his ideas for this own cryptocurrency, Ethereum.
He started working on the idea full time after dropping out of university thanks to a Thiel Fellowship grant of $100,000 that is awarded to gifted people under the age of 23 to allow them to pursue a scientific project, social movement or found a start-up.
Ethereum is described as a “decentralised mining network and software development platform rolled into one” that facilitates the creation of new cryptocurrencies and programs that share a single blockchain. The big difference with bitcoin is the “software development platform” part of the offering. While bitcoin is just virtual money, Ethereum is money that can have software attached to it and do things.
Ethereum has already been adopted by Brickblock, a German real estate backed token (see main story) thanks to the addition of smart contracts to a coin that means any sort of trading can be done with this blockchain technology. At the very core
of the innovation is the fact that the transactions, contracts and records run on a blockchain have no central authority or administrator and so are immutable. You can’t hack the blockchain.
Moreover, the apps that can be attached to Ethereum means it is possible to make “coloured coins,” or specific subcategories of coins that are backed by things like Brickblock’s buildings or a gold deposited in a bank. This idea could potentially have a huge impact on e-commerce and the applications to securities trading are endless. Ethereum could be come a whole securities derivatives business in its own right.
ussian president Vladimir Putin is excited about the potential of blockchain technology, as thanks to Moscow-born Vitalik Buterin, it is already a major innovator.
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