Opinion Russian Potential for BitCoin Development

Russian Potential for BitCoin Development

June 3, 2016

russian ministryThe previous two years represent the period of the biggest political turmoil in Europe since the end of the Cold War. With the onset of the War in Donbas, it is clear that the relationship between the Russian Federation and the rest of the Western world reached its low point and the same dynamic continues to this very day.

But, the price of confrontation between Russia and the cluster of superpowers that is the EU and the US was a heavy toll on the economic domain. This is especially true for Moscow and its government, which is struggling to keep the domestic economy above the waterline, especially now when the full impact of the western sanction is being felt.

However, as a huge market with incredible natural potential in resources, Russia is not a country that has a limited number of options at its disposal. Mainly because of the strong ties with the rest of the European nations, there is little doubt that sooner or later, the relationship between the EU, and the US eventually as well, will be mended.

In spite of this, there is a possibility that could provide Russia with an important boost to its economy and it comes in the form of cryptocurrency, primarily BitCoin but also to some extent the blockchain tech as well. But, there are several potential issues on this road and some of them are already active as big problems stopping this process. But, with all this in mind, there is definitely a big incentive for Russia to enter the cryptocurrency domain and do this as fast as possible.

A Challenging History

The recent past of the Russian Federation is anything but easy. The last decade of the USSR brought about a complete destruction of the soviet system in which the essentials that were provided by the union gradually dissolved, leaving practically nothing left. While the countries with a free market, including communist nations like China, began to reap the rewards of the late period of the second Industrial revolution, the Soviet Union was left in a deep crisis. The same crisis ended with the collapse of the Iron Curtain and the soviet sphere of influence, which finally dissolved the country itself.

The 1990’s that followed only continued the trend of instability and latent chaos. While some individuals took the opportunity to expand their influence and acquire incredible wealth, mostly in natural resources, most regular citizens slid towards the poverty line. The process stopped with the election of Vladimir Putin in the early 2000’s, which made the country more financially stable and began a huge program of rebuilding its military and political reach.

While in many ways successful, the program also isolated the nation and once again funneled it into a state of a shaky economy and uncertain financial future. Currently, there are no clear indications when the same problem will be resolved, especially because of the fact that Brexit provides the EU with its more pressing set of worries.

But, like often in the recent Russian history, the day-to-day news cycle fails to notice many facts about this incredibly large and diverse nation. Many of these facts could ideally supplement a digital currency like the BitCoin network.

A Nation Suited for Tech Development

Ever since the Soviet Union embraced and further developed the educational system left from the Russian Empire, the country attained some of the best research-focused learning centers in the world. The domain of IT and tech, in general, is a huge part of this, even though many outsiders of the country do not realize this. In fact, even during the time of the Soviet Union, the nation housed excellent programmers, electronic engineers and many other professions that are the backbone of the IT sector.

Once the Iron Curtain fell, many of these started their own companies that started building software solutions. Today, the nation supplies a lot of its own platforms, app packages and anything else used in the country. This potential drives one of the strongest gaming and E-Sports industry in the world, but also many more branches of the tech domain.

Here, BitCoin could attain some of the most vibrant developer hubs in Europe, especially in cities like Moscow and Saint Petersburg. Today, there are companies that dabble in BitCoin, but rarely are they on the same scale and magnitude as their counterparts in the West of the Far East. Additionally, the process for blockchain development has barely started. But, the potential for the same development expansion is definitely there are ready to be tapped.

A Large Marketplace

The Soviet Union might have dissolved, but the Russian influence across their borders did not weigh completely. While Russia has exceedingly bad relations with some of its neighbors, other nations are a lot friendlier to Moscow.

When it comes to the economy, The Eurasian Economic Union (EEU) is a great example. Aside from Russia, it includes Armenia, Belarus, Kazakhstan and Kyrgyzstan, which combine to a population of over 180 million, along with shared languages. The union includes mutual trade deals and many additional benefits, all of which could work perfectly for a BitCoin-friendly financial environment.

The remittance market in the EEU alone could provide many tens of thousands of new digital wallet owners and a lot of advantages to workers who travel and work inside of the union. Aside from this, the citizens of Russia would most likely gladly accept BTC as an alternative to traditional currencies, much in the same way others have done this already.
Here, things like betting online using BitCoin would provide them with instant benefits in the form of low or non-existent transaction fees and protective anonymity.

Roadblocks Ahead

The main stumbling point in the same process of BitCoin expansion into Russia is its government. While the Russian federation came to replace the Soviet Union, the appeal of a tightly-controlled population remained the same. Today, Russia is one of the most hostile nations to any concept of a digital currency, but especially the already established BitCoin network.

Where regular people see advantages, the police apparatus of the Russian federations sees potential for fraud and deception, both of which could threaten the government of the nation in some manner. Many believe that this outlook is fueled by an embedded sense of bureaucratic paranoia, but the results show that the government is blocking BitCoin whenever it can. Its financial institutions are proceeding in the same manner, choking any chance for a BTC expansion.

Hopefully, the Russian government will realize that the choke they are exerting is only hurting the country and ultimately themselves, not any hostile nation. When this happens, it is an absolute certainty that the country will become a very exciting place for BitCoin.