Putin's Aide Seeks $100 Million to Rival China in Bitcoin Mining

[Hydrogen]

A company co-owned by one of President Vladimir Putin’s internet advisers plans to raise the cryptocurrency equivalent of as much as $100 million in a push to help Russian entrepreneurs challenge China in bitcoin mining.

Russian Miner Coin is holding a so-called initial coin offering, where investors will use units of ethereum or bitcoin to buy new RMC tokens. These new tokens will have rights to 18 percent of the revenue earned with the company’s mining equipment, according to a presentation posted on its website.

RMC plans to use semiconductor chips designed in Russia for use in satellites to minimize power consumption in computers for crypto-mining, Putin’s internet ombudsman, Dmitry Marinichev, said at at a news conference in Moscow.

“Russia has the potential to reach up to 30 percent share in global cryptocurrency mining in the future," Marinichev said, adding that $10 million from the proceeds of the ICO may be spent developing the processors.

More and more startups are offering tokens as a way to raise money upfront for digital assets in ICOs. Unlike a traditional IPO in which buyers get shares, a startup’s ICO nets you virtual tokens unique to the issuing company or network that grow in value only if the business proves viable.

The U.S. Securities and Exchange Commission last month warned that ICOs may be considered securities and signaled greater scrutiny of the sector, though it stopped short of suggesting a broader clampdown.

Today’s bitcoin mining requires special computers based on chips with minimized power consumption. China’s Bitmain Technologies Ltd. is one of the leading producers of such equipment and also runs Antpool, a processing pool that combines individual miners from China and other countries. Rival Bitfury Group, founded by Valery Vavilov, a Russian-speaking native of Latvia, produces equipment for mining virtual currencies and runs large-scale centers in Georgia and Iceland.

Russia has 20 gigawatts of excess power capacity, with consumer electricity prices as low as 80 kopeks (1.3 cents) per kilowatt hour, which is less than in China, RMC said in the presentation. The company initially plans to locate mining computers based on Bitfury chips in individual Russian households to challenge Bitmain by using Russia’s lower power prices.

https://www.bloomberg.com/news/articles/2017-08-08/putin-s-aide-seeks-100-million-to-rival-china-in-bitcoin-mining

Tried to bold the most relevent parts.

Good news for those favoring a decentralized btc mining paradigm. Miners becoming more decentralized could reduce probability of hard forks in the future. This could translate to diminished volatility. Much of bitcoin's negative volatility has been due to uncertainty, fear and sell offs derived from hard fork worst case scenarios. If japan, australia and other nations invest in mining operations that could further decentralize crypto mining which would parallel Satoshi's vision for btc not being centralized within national abstractions.

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[Huseyinnn]

I wish I live in Russia. Love Putin

Russia will dominate crypto currency world sooner or later.

[nocturnalsheet]

need Russia to stop the chinese dominance in mining. sick of the chinese miners and their control

[TrumpD]

I wonder what prompted the u-turn by Russia. They have gone from banning bitcoin outright to wanting to be an industry leader. Remarkable turnaround from them, not that I am complaining. It will help bitcoin and crypto currencies a lot.

[OmegaStarScream]

A very good decision but we don't want from Russia to control either, we don't want from anyone to control. If only more countries take the same actions, that will make the network more powerful and decentralized then ever and this is valid for exchanges as well.

[joseafonso123az]

Russia is a country with so much power. Vladimir Putin may be a guy that doesn't obey anyone, but in terms of trying to be in the top tier of everything he is always there. I don't doubt this RMC tokens get a great value, because they have plans on how to develop them. It will be interesting as to how China will cope with this. They will surely try to do something new also.

[gregory51gosh]

This is one of the ways to fight the American financial system. USA wants to partially de legalize crypto (only licensed entities will be able to trade it).

[Hydrogen]

I wonder what prompted the u-turn by Russia. They have gone from banning bitcoin outright to wanting to be an industry leader.

Europe imposing economic sanctions against russia 3-4 years ago may have prompted it. The latest series of economic sanctions against russia by the united states is more of the same. De-dollarization policies by russia and other nations could also be a motive. With the united states being $20 trillion in debt there are concerns over the us dollar becoming devalued/hyperinflated if america defaults on its debt.

Also after the economic crisis of 2008, bankers meddled heavily in the affairs of nations. It was bad enough that some countries like iceland and hungary banned those representing central banks from operating in their country & imprisoned other bankers who they held responsible for playing a role in causing the crisis. That movement could be one reason why russia and other nations embrace bitcoin as it could allow them to escape political meddling by bankers and the monopoly bankers have over many economies, etc.

[yua_na]

i also think russian involve in this crypto world to stop china from dominating, rusia also strong country. i like this competitions, it makes crypto live..

[aceptamosbitcoin]

“Russia has the potential to reach up to 30 percent share in global cryptocurrency mining in the future,"

30% of a $100B market with $100M. They could only dream of.
At least they have cheap electricity. As a close to the government they can eve transfer the electricity cost "to the people". But it's a smart way to get USD instead of RUB.

[Vishnu.Reang]

Russia is at a disadvantage in crypto-coin mining, at least when compared to China. Most of the mining rig companies manufacture and assemble their equipment in China and therefore the capital costs are lower for the Chinese miners.

[warrior333]

Russia can compete with China in the price of electricity. This compensates for the cost of purchasing equipment. On the other hand now the inflow of investments to Russia stopped. Crypto currency is the only chance for the Russian and they will try to use it.

[Rahar02]

A very good decision but we don't want from Russia to control either, we don't want from anyone to control. If only more countries take the same actions, that will make the network more powerful and decentralized then ever and this is valid for exchanges as well.

Woow, it's a big news
Russia want to develop their own mining system to challenge China, doesn't mean bitcoin mining become centralized as it can't be as long as there are some sides compete to process the blocks. It just added another Power in bitcoin mining, balancing and stabilize between bitcoin miners.
And I guess it is a Big ICO as well, where I can invest? What's the site to invest? Look at the opportunity, 18% of their earnings is a good deal. The initial coin offering (ICO) for these “RMC” tokens will provide holders with rights to 18% of the earnings generated by all mining equipment purchased with investment funds.

[audaciousbeing]

We are all expressing optimism which I feel its nice for this kind of investment coming from mother Russia but without taking cognisance of the reaction of the Russian government in relation to crypto and especially bitcoin in which they have made it clear they are not  favorable to any form of anonymity and more so, a project as massive as this will definitely attract the attention of government.

[pushups44]

It was only a matter of time before governments and central banks see the potential of bitcoin and other cryptocurrencies to obtain leverage in global economic and financial affairs. At this point bitcoin and other cryptocurrencies are here to stay and can no longer be ignored by world powers.

If this is true, it is extremely bullish for bitcoin and other cryptocurrencies.

[deisik]

Russia has 20 gigawatts of excess power capacity, with consumer electricity prices as low as 80 kopeks (1.3 cents) per kilowatt hour, which is less than in China, RMC said in the presentation. The company initially plans to locate mining computers based on Bitfury chips in individual Russian households to challenge Bitmain by using Russia’s lower power prices.

https://www.bloomberg.com/news/articles/2017-08-08/putin-s-aide-seeks-100-million-to-rival-china-in-bitcoin-mining

Tried to bold the most relevent parts.

Good news for those favoring a decentralized btc mining paradigm. Miners becoming more decentralized could reduce probability of hard forks in the future. This could translate to diminished volatility. Much of bitcoin's negative volatility has been due to uncertainty, fear and sell offs derived from hard fork worst case scenarios. If japan, australia and other nations invest in mining operations that could further decentralize crypto mining which would parallel Satoshi's vision for btc not being centralized within national abstractions

That's mostly bullshit

First, the consumer electricity prices are nowhere near that in Russia. It is more like 4 rubles per kilowatt hour (i.e. 5 times higher that the number given). The tariffs are cheaper for rural areas but they are still on the order of rubles, not around 80 kopeks. Further, the Russian authorities should first decide what to do with Bitcoin per se, i.e. whether allow Bitcoin for personal use and whether allow mining it since issuing money and money surrogates is strictly prohibited by Russian laws, and still more so if Bitcoin is to be treated as a currency. They would need to adopt a special law regarding Bitcoin to address that issue, but nothing has been done so far

[iluvpie60]

A company co-owned by one of President Vladimir Putin’s internet advisers plans to raise the cryptocurrency equivalent of as much as $100 million in a push to help Russian entrepreneurs challenge China in bitcoin mining.

Russian Miner Coin is holding a so-called initial coin offering, where investors will use units of ethereum or bitcoin to buy new RMC tokens. These new tokens will have rights to 18 percent of the revenue earned with the company’s mining equipment, according to a presentation posted on its website.

RMC plans to use semiconductor chips designed in Russia for use in satellites to minimize power consumption in computers for crypto-mining, Putin’s internet ombudsman, Dmitry Marinichev, said at at a news conference in Moscow.

“Russia has the potential to reach up to 30 percent share in global cryptocurrency mining in the future," Marinichev said, adding that $10 million from the proceeds of the ICO may be spent developing the processors.

More and more startups are offering tokens as a way to raise money upfront for digital assets in ICOs. Unlike a traditional IPO in which buyers get shares, a startup’s ICO nets you virtual tokens unique to the issuing company or network that grow in value only if the business proves viable.

The U.S. Securities and Exchange Commission last month warned that ICOs may be considered securities and signaled greater scrutiny of the sector, though it stopped short of suggesting a broader clampdown.

Today’s bitcoin mining requires special computers based on chips with minimized power consumption. China’s Bitmain Technologies Ltd. is one of the leading producers of such equipment and also runs Antpool, a processing pool that combines individual miners from China and other countries. Rival Bitfury Group, founded by Valery Vavilov, a Russian-speaking native of Latvia, produces equipment for mining virtual currencies and runs large-scale centers in Georgia and Iceland.

Russia has 20 gigawatts of excess power capacity, with consumer electricity prices as low as 80 kopeks (1.3 cents) per kilowatt hour, which is less than in China, RMC said in the presentation. The company initially plans to locate mining computers based on Bitfury chips in individual Russian households to challenge Bitmain by using Russia’s lower power prices.

https://www.bloomberg.com/news/articles/2017-08-08/putin-s-aide-seeks-100-million-to-rival-china-in-bitcoin-mining

Tried to bold the most relevent parts.

Good news for those favoring a decentralized btc mining paradigm. Miners becoming more decentralized could reduce probability of hard forks in the future. This could translate to diminished volatility. Much of bitcoin's negative volatility has been due to uncertainty, fear and sell offs derived from hard fork worst case scenarios. If japan, australia and other nations invest in mining operations that could further decentralize crypto mining which would parallel Satoshi's vision for btc not being centralized within national abstractions.

So now it becomes China vs Russia on the coin investment and coin mining stage huh? Seems like a naked attempt to try and take over the market and the mining.

What if they spend hundreds of millions on mining equipment and have 60% hashing power. That would not be a good thing. We may have to re-think Bitcoin somewhere in the future if this happens. No government should be investing in this, the whole point of BTC is to get away from it... ughhhhh

[no0dlepunk]

It seems like Russia is playing a great role in promoting cryptocurrency. Honestly, I am excited on their project because the Chinese won't be able to drive bitcoin's future anymore. I guess Mr Vlad should keep on doing what he has been doing... bitcoin is the best escape to fiat deflation and Asian countries should learn how to take advantage of it.

[TravelMug]

Hmm. But I will always take everything with a grain of salt coming from Russia, specially in the crypto world. Isn't it they all suddenly make a U-turn on their decision about crypto's? And now this news? I always thought that they are anti-bitcoin, but I don't know why they suddenly love to go to bitcoin mining? Although is good that at least China's monopoly will be challenged in paper. But I not 100% sure that Russia will do that, unless I have seen a actual mining rig somewhere in there. LOL. And besides, they always contradicts themselves as far as I can remember regarding bitcoin before.

[BitcoinBallerina]

What are electricity rates like in Russia?

I know China has some of the cheapest electricity in the world, which is why they are such a leader in Bitcoin mining today.