According to a recent CoinDesk article, the Russian government is testing bitcoin’s blockchain. However, it isn’t testing it as a digital money alternative. Rather, it is testing it for its database capabilities, and specifically, for efficient document handling.
As some technologists have said about bitcoin, digital money is a “reference application”. That is, it is an initial proof-of-concept for the real technology of bitcoin, its underlying public ledger. The real breakthrough is the blockchain itself, a public ledger of information organized by transaction.
The blockchain is designed to be immutable, its design allows a non-trusted group of computers (miners) to build consensus, and its miners are compensated by receiving block creation rewards and transaction fees. This technology is a first in the world of technology and finances, in so-called “fintech” circles. As opposed to more individually secured systems, the blockchain is designed to be distributed among various computers versus being siloed in one trusted vendor’s facility (like Visa or Mastercard).
Russia expects that the blockchain will save them money by reducing the effort required by various data centers and by simplifying business operations. The fact that this is happening in Russia is remarkable given their stated concerns with bitcoin as a digital currency competing against the Russian Ruble, their national currency.
It is also quite exciting for those of us who are tracking and investing in bitcoin. Although there are no guarantees that Russia will support bitcoin officially, it is not illegal to own and trade bitcoins personally in Russia despite some articles to the contrary. In the meantime, bitcoin continues to be discussed and debated within the Russian government regarding its use as money and the regulation of “money surrogates”, a term being used for items that can be used as money yet are not controlled by the Russian government.
Things continue to get interesting in the world of bitcoin. In addition to using the blockchain for money (bitcoin and other cryptocurrencies), we see additional uses including document handling, smart contracts, and other unanticipated benefits of this amazing technology.
As for The Bitcoin Tutor, be on the lookout for new training opportunities for bitcoin investing and trading in November! With a new US president to be elected on November 8th, I predict we will see more instability in global markets which often helps to grow bitcoin’s value.