Russia's cryptocurrency response to bitcoins

Russia's own cryptocurrency, the wishcoin, may hit the market in 2014.

The man behind the project is Alexander Borodich, best known for his MyWishBoard peer-to-peer wishlist platform. Borodich says a test batch of 5 million virtual wishcoins was "minted" in mid-October 2013 and circulated at a "symbolic exchange rate" of 100 wishcoins per 5 rubles.

What will make the wishcoin stand out from other cryptocurrencies in that its code will not include the transaction history. With Bitcoin, information about all previous transactions gets recorded in the code; as the number of transactions (and the number of users) grows over time, increasingly greater processing capacities are required to handle the currency.

Borodich claims that his currency will be impossible to forge. Wishcoin transactions will be supported by dedicated plastic cards and by phone applications.

"The trend persists, and the cryptocurrency market will continue to evolve," an expert with USS Investments told RBTH. "There are currently around a dozen different cryptocurrencies in the world, and nothing stops Russia from getting one of its own. Such a currency, however, is unlikely to see any wide use outside the CIS countries. Consequently, it will pose no competition threat to Bitcoin, nor will it affect the latter's exchange rate."

German Gref, head of Russia's largest bank Sberbank, told journalists in December 2013 that his institution could theoretically launch a virtual currency similar to Bitcoin in conjunction with the Yandex.Money Internet payment system. Sberbank is currently considering this possibility.

Bitcoin, the world's first electronic payment system, was developed in 2009 by Satoshi Nakamoto as an alternative to the standard world currencies. After its exchange rate rose above $675 in November 2013, Bitcoin's success put cryptocurrencies firmly in the sights of governments and the public.

The U.S., the U.K., Germany, France, and Singapore have already legalized cryptocurrencies as a payment method. Their status in Russia remains undefined.

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