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Thread: Russian village creates own cryptocurrency

  1. #1
    The Un-Holy One The Man's Avatar
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    Russian village creates own cryptocurrency

    In a small village outside Moscow, a quiet revolution is underway.

    Farmers and small businesses around Kolionovo, 80 miles from the capital, are ditching the ruble and switching to a cryptocurrency -- the kolion -- to pay for local trade.

    Banker turned farmer Mikhail Shlyapnikov led the way. Diagnosed with cancer a decade ago, he moved out of the city with the aim of reviving a dying village.

    Five years later, he needed funds to develop his plant nursery but ran into an obstacle many small Russian businesses face: banks wanted to charge 12% interest to lend him money.

    "I didn't want to suffocate and be a slave of the banks," Shlyapnikov says, putting a hand on his throat. "So I had to invent my own money. And I did it. I'm my own bank, government, regulator."

    He started issuing paper kolions in 2014, but they were banned by a Russian court in 2015. So he started working on a cryptocurrency version, and in April 2017 raised $500,000 in an initial coin offering (ICO).

    Unlike bitcoin, Shlyapnikov's cryptocurrency can't be mined using a computer. The digital tokens can be bought using a range of other cryptocurrencies, or earned through a process called "plowing" -- helping the residents of Kolionovo with farming and construction work.

    It's changing the way people do business in the village.

    Shlyapnikov, who calls himself an "agro-anarchist" and throws parties honoring Karl Marx, uses the currency to support what he calls the "Kolionovo Ecosystem."

    He has persuaded about a hundred farmers and suppliers in the neighboring villages to use kolions for local trade, making paper money a rarity in the community.

    "We now have about $2 million in kolions because its value has jumped since the ICO," Shlyapnikov says, adding that the currency is backed by a reserve of 500 bitcoins (worth roughly $3.7 million at current prices.)

    "This way we can attract real money into the business," and connect the cryptocurrency with the real economy, he added.


    Mikhail Shlyapnikov launched his own cryptocurrency to raise funds for his tree nursery.

    Russia's economy has returned to growth after being hit by a one-two punch of Western sanctions and plummeting oil prices, shocks that saw the ruble lose half its value since 2014.

    Now Shlyapnikov and other enthusiasts are touting cryptocurrency as a way to insulate themselves from Russia's financial system.

    Cryptocurrencies have boomed in the country thanks to good scientific and technical education and some of the cheapest electricity in Europe to power the servers needed to mine them.

    Last year alone, Russia had several blockchain projects attracting major funds, the largest ICO being the MobileGo games platform, which raised $53 million.

    But it's still early days for cryptocurrencies in Russia, and the legal environment is shifting. Restaurants and shops were quick to spot the trend and allow customers to "pay" with bitcoin, although the owners must do mirror transactions in rubles to avoid falling foul of the law.

    The emerging industry awaits regulations that President Vladimir Putin has ordered the Finance Ministry to introduce by July.

    First drafts of the measures suggest that the ruble will remain the only legal form of payment but initial coin offerings and mining will be granted some legal protection.

    Putin said earlier this year he wanted Russia to become more open to innovation, warning that "those who ride the technological wave will advance, others will drown."

    The Russian president, however, has also voiced concerns that cryptocurrencies can be used by criminals, so questions remain how tolerant the Russian government will be of such experiments.

    "To move forward, we must expand the space for freedom, be a country open to the world, new ideas and initiatives ... to cut everything that prevents our people from opening their full potential," Putin said in March.

    Shlyapnikov has more modest goals. He thinks cryptocurrencies could be a way for small and remote enterprises to survive independently from Moscow.

    "I don't want to expand because it will bring obligations I'm not ready for," the farmer says. "I'm not ready to save the world or even Russia, I want to be comfortable and I want to share this comfort with the community."
    Russia cryptocurrency: Farmers ditch ruble for the kolion

    Shlyapnikov

    with some of his now illegal kolion bills




    They are enterprising folks there, in Kolionovo, among other things, every year now, they sell people in Moscow holiday trees in December, which they grow themselves, preferably for kolions or bitcoins, though, of course, rubles are acceptable too


    Russia has lots of inventive and creative people... Unfortunately, instead of embracing and helping them thrive and drive the country itself forward as a result; the government there (and this has been the case under all regimes, the monarchies, Communism, and now Putin too) usually just puts obstacles in their way, punishing innovative and unusual ways of thinking... Hence, so many smartest, most gifted Russians have always fled abroad. And the average people simply trudged on in a backward, often impoverished (still is, in many regions) economy, and under authoritarian, if not totalitarian, regimes...
    Thanks from labrea

  2. #2
    Veteran Member
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    I love it!

    Ithaca, New York has been doing the same thing since 1991.

    The Ithaca HOUR is a local currency used in Ithaca, New York and is the oldest and largest local currency system in the United States that is still operating.[1][not in citation given] It has inspired other similar systems in Madison, Wisconsin; Corvallis, Oregon;[2] and a proposed system in the Lehigh Valley, Pennsylvania.[3] One Ithaca HOUR is valued at US$10 and is generally recommended to be used as payment for one hour's work, although the rate is negotiable. wikipedia


    Thanks from The Man and Friday13

  3. #3
    The Un-Holy One The Man's Avatar
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    Problem with printing your own money is, of course, most countries have laws against counterfeiting and such...

    With cryptocurrency, it's different, because, as yet, even in the West, there are very few laws in place to really regulate this. In Russia - none at all. Now, finally, Putin is making some. And these guys have got ahead of it Good for them

  4. #4
    Veteran Member Metal Slug Champion Blah's Avatar
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    Years ago there was a country in Africa using beer bottle caps.
    Thanks from The Man

  5. #5
    Above the FRAY Friday13's Avatar
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    I like the stone 'money' of Yap...

    The Island Of Stone Money

    Salt was also used as 'money'...

    Encyclopedia of Money
    Thanks from The Man

  6. #6
    Veteran Member Metal Slug Champion Blah's Avatar
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    Quote Originally Posted by Friday13 View Post
    I like the stone 'money' of Yap...
    They dropped one of those things in the ocean one time and its ownership still continued to change hands.
    Thanks from The Man

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