Russian President Vladimir Putin and his economic team have long been under the impression that, to wean the country off its oil dependence, they needed a major leap in some specific area of technology that wasn’t yet dominated by Western, Chinese or Japanese tech giants. Their latest hopes are being pegged to the Ethereum blockchain platform.
At last week’s St. Petersburg Economic Forum, Putin talked to Vitalik Buterin, the founder of Ethereum. Buterin’s family emigrated from Russia to Canada when he was six. There, the math whiz got interested in Bitcoin while still in his teens. A $100,000 fellowship from Peter Thiel’s foundation launched him on the Ethereum project.
Though Buterin’s platform does host the ether currency, which has risen in value to more than $260 from $8 so far this year, it’s far more ambitious than that. Buterin thinks of his project as the safe medium for all sorts of transactions that can be validated through a distributed system, the way Bitcoin transactions are. This includes bets, option deals, insurance contracts, the government registration of property rights and copyright — pretty much any kind of deal that requires validation or that can be automatically executed when certain conditions become right. Ethereum provides a universal blockchain upon which various projects can be built.
Russia has brilliant engineering brains, and it could try to lure back talented Russians like Buterin and those who work in Silicon Valley. But it’s not easy to find the “blue ocean” areas not infested with international sharks like Apple, Google and Alibaba. In the past decade, technological bets placed by Russian leaders have suffered from being overly audacious or too far behind the competition.