from the GPU-prices-going-back-up-again? dept.
Russia is preparing an investment in Bitcoin to replace the US dollar as a reserve currency in a bid to tackle US sanctions, according to a Russian economist with close ties to the Kremlin.
Vladislav Ginko, an economist at the Russian Presidential Academy of National Economy and Public Administration, a state-funded institution, said the government is taking steps to minimise the impact of US sanctions that have hit the Russian rouble by replacing some of its US dollar reserves with the world’s most popular cryptocurrency.
US sanctions on Russia over the past year have come after the poisoning of former Russian military officer Sergei Skripal. Mr Ginko believes Russia’s de-dollarisation decision is fundamentally a move to “protect its national interests” due to a possible interruption of “US nominated payments flows for Russian oil and gas” and claims investment could be as much as $10bn (£7.8bn).
At current rates of ~$4000 per bitcoin that would be ~ 2.5 million bitcoins, about 12% of the total number of bitcoins that will ever be issued (21 million).
As of 2019-01-15 03:00 UTC, Bitcoin is trading at $3672.01 according to coinbase.
(Score: 5, Insightful) by Anonymous Coward on Tuesday January 15 2019, @07:30AM (1 child)
A new cycle of pump-and-dump began with news that a nobody in Russia said something grandiose.
(Score: 1, Insightful) by Anonymous Coward on Tuesday January 15 2019, @07:50AM
At least this article has an actual source rather than the "person familiar with the matter", "anonymous official", probably made-up rumors we commonly see.
(Score: 2, Funny) by Anonymous Coward on Tuesday January 15 2019, @07:36AM (1 child)
Got the bit-c0in in my Russian pocket! To be rich, all you have to do is send me your bank credentials, so I might make a mighty dump in your account! иди с Богом!!
(Score: 0) by Anonymous Coward on Tuesday January 15 2019, @11:26AM
Nigerian Tzar.
(Score: 1, Funny) by Anonymous Coward on Tuesday January 15 2019, @04:07PM
this will prove to be a wise investment. fuck the bankster apologists.
(Score: 3, Funny) by Snow on Tuesday January 15 2019, @04:42PM
Daddy needs a Lambo!
(Score: 1, Interesting) by Anonymous Coward on Tuesday January 15 2019, @05:01PM (5 children)
What could go wrong?
I guess PT Barnum was right after all: a fool and his money are soon parted.
(Score: 4, Insightful) by Snow on Tuesday January 15 2019, @05:08PM (4 children)
What if it goes right?
Currently USD is used for a lot of international trade. That props up the value of the USD. If enough trade moves away to other currencies, then that's bad for the USD. If a lot moves away, it could be catastrophic.
(Score: 0) by Anonymous Coward on Tuesday January 15 2019, @10:36PM (3 children)
The international trade volume in 2017 was 17,700 billion dollars. A mere 10 billion is a drop in the ocean.
(Score: 2) by deimtee on Tuesday January 15 2019, @10:53PM (2 children)
Money doesn't get used up, it simply moves. If that bitcoin is used to buy $10B worth of stuff, then somebody else now has it and can buy another $10B worth of stuff. It only has to be involved in 17 trades a year to take 1% of that total.
If you cough while drinking cheap red wine it really cleans out your sinuses.
(Score: 0) by Anonymous Coward on Wednesday January 16 2019, @01:27AM (1 child)
Honest question/Not trolling - are there enough "vendors" that accept bitcoin that provide the types of services that Russia would want to purchase that Russia currently cannot purchase due to sanctions?
(Score: 1, Insightful) by Anonymous Coward on Wednesday January 16 2019, @06:40AM
There are no vendors of any value that sell for BTC. A few retailers tried Bitcoin to draw customers. This SoylentNews tried accepting subscriptions in BTC, but had to cancel due to upheaval in the BTC world. It means that there is absolutely no need for a state to invest into a cryptocurrency.
Second, there is no need for Russia to pay in currency other than USD. If they ask Agilent/Keysight to sell them a 100 GHz oscilloscope, the company will not even consider shipping if the item is prohibited. They will not even get to discussing money.
Russia can buy sanctioned items through various less lawful individuals. They will be happy to receive USD, probably cash. They probably wouldn't know what Bitcoin is good for.
Bitcoin cannot be used as a store of value because it's value changes fivefold during one year, and the currency is not liquid.
Bitcoin is prohibited in Russia.
Bitcoin cannot be used by the state because Russia has no reason to believe that a 50% attack is impossible. The opposite is true; after the recent drop in value, many miners closed up the shop, and remaining ones (except MDC, of course :-) can be easily bought or controlled. Miners work for money, so a nice side deal will be likely accepted.
Bitcoin cannot be chosen by Russia because BTC depends on 100% availability of most of the nodes. However that connectivity is not guaranteed, as the routers belong to the opponent.
In other words, it is either an intentional play on the BTC market, or a fake.
(Score: 0) by Anonymous Coward on Tuesday January 15 2019, @10:57PM (1 child)
Its not a safe place to "store" money. Must be hedging their bets by controlling the market.
(Score: 0) by Anonymous Coward on Wednesday January 16 2019, @12:55AM
Its a great place to store money for people who can think long term (more than 2 years or so).
(Score: 2) by richtopia on Wednesday January 16 2019, @02:33AM (1 child)
Over Christmas when the market looked grim I was chatting with a colleague about how bitcoin might fare in a downturn. We honestly don't know. I tried to compare bitcoin to gold as a reserve of wealth, but ultimately bitcoin is still untested.
(Score: 0) by Anonymous Coward on Thursday January 17 2019, @07:29AM
The infrastructure is available. You knock off a significant part of the internet, or have a major power grid going down, driving up costs, and all of a sudden bitcoin isn't looking like a store of wealth.
That is the problem that gold, oil, and other 'stable' raw commodities overcome. They are still there and available for personal transactions when the system has gone to hell. Bitcoin on the other hand WILL NOT.
Having said that: So long as the internet is mostly unimpeded, it makes an excellent method of TRANSFERRING wealth between borders that would otherwise be impossible. This is why all those chinese were putting so much effort into mining it in China and adjacent regions, and selling it on exchanges within china to its citizens. Bitcoin is one of the few manners in which you can transfer wealth in and out of a region that is otherwise blockaded for one reason or another.