Partiya Rosta (the “Party of Growth”), led by Boris Titov, has created its own currency and released a digital wallet to engage members of the movement, signalling new directions for blockchain applications.
Ever since bitcoin was first articulated by its anonymous creator or creators in its 2008 white paper, blockchain technology has been held out as the answer to a myriad of social and economic problems. As a transparent and immutable ledger that lies outside of the control or interference of any centralized authority and can be shared and viewed by anyone, the blockchain offers freedom from censorship, efficiencies in costs, a high degree of accountability, a secure and permanent record of information and more.
Until recently, however, these advantages have only been theoretical. For all blockchain’s promise, the world was not ready to see it rolled out in practice – and to be realistic, the technology itself was not yet mature and advanced enough to see a real-world application.
That has started to change in recent months, driven by a number of factors. Greater regulatory clarity around bitcoin and digital currencies has helped. On a technical level, some of the older blockchain platforms – pioneering though they were – have given way to applications that are better suited to mass-market adoption. Lastly, sentiment around cryptocurrencies tends to follow the market price of bitcoin. When bitcoin crashed in value in 2014, following the implosion of its first exchange MtGox, many pundits proclaimed the death of the virtual currency. In the same way that rumors of the death of the internet were proclaimed and exaggerated, then in the wake of the dot-com bust, bitcoin recovered and is, at the time of this writing, posting all-time highs in price.
Russia may not seem like the most obvious location for the adoption of blockchain technology. It was assumed that in Russia, bitcoin would be butting up against a strong state against its transparency. The reality is that a huge amount of innovation occurs in Russia, which has a thriving cryptocurrency scene. The authorities recently relaxed their regulatory stance on bitcoin and are taking a “wait-and-see” approach, rather than attempting to ban this new freedom leaving its many proponents to come in out of the cold.
Blockchain’s first and trailblazing application was bitcoin, which brought, for the first time, peer-to-peer online money transfers. No middleman was necessary, no trusted party required to keep accounts when moving money over the web. But blockchain is about far more than money. The decentralized ledger can be leveraged for many different applications – as Boris Titov, chairman of Russia’s Party of Growth, has long recognized.
57-year-old Titov has a background in business and politics, starting out in a state-owned company before moving into the private sector and rising through the ranks of a petrochemical investment and trading group. He has a long record of public service and currently holds the role of Russia’s business ombudsman, investigating complaints and mediating fair settlements. Within Russia, he is a well-known figure – he was the only Russian leader at President Trump’s inauguration.
As part of his activities for the minority Partiya Rosta, Titov wanted to create an active community based on the blockchain. To do so, he contacted Sasha Ivanov, CEO of the Waves Platform – a blockchain application that allows anyone to create and distribute their own blockchain tokens, which can represent anything the issuer wants and is prepared to honor.
Having raised 30,000 bitcoins (at the time, around $16 million and now closer to $38 million, thanks to the virtual currency’s soaring value), Ivanov is something of a celebrity within Russia’s blockchain scene himself. The two met and discussed the potential to apply the technology Waves offered to Titov’s cause. “He’s crazy about blockchain,” Ivanov recalls of the meeting.
The result of the collaboration is Upcoin. 10 million digital coins were created on the Waves platform – a process that takes only a few clicks and minimal cost. Everyone who registers on the project’s portal, http://ludirosta.ru, receives an e-wallet. Upcoins will be distributed for participating in community activities, such as volunteering at party meetings.
These Upcoin’s can then be used to acquire a discount from partners for educational programs, yoga classes at the club and various other services. “Unlike usual loyalty program development and implementation, the implementation of a blockchain token costs very little – it’s several times cheaper. Furthermore, such technology provides benefits such as the full transparency of the system, low friction ecash payments and a permanent, unalterable record of transactions,” comments Ivanov. The Upcoin system won’t just be used as a parallel form of money or loyalty token, though. The blockchain allows secure online voting, allowing decisions to be taken quickly and safely without the need for participants to visit a polling booth – something Titov wants to see his party use as a matter of course.
As the very first example of such a social project using blockchain, in Russia or anywhere else, Upcoin is ground-breaking and a signpost for how distributed ledger technology might come to be used in the future. “For those who have been working in this space for years, aiming to increase blockchain adoption, it’s a vindication of our efforts,” says Sasha. It’s also great to see Waves, the ‘blockchain for the people’ platform we designed for mass adoption, being used for exactly the purpose it was created for.”
It will be exciting to watch the growth of these technologies both now and into the future.