A Russian company run by President Vladimir Putin’s technology right hand man Dmitry Marinichev is planning to launch an ICO (initial Coin Offering) in the region of $100 Million. This ICO is meant to help push Russian entrepreneurs to be able to rise up to the challenge and match the exploits of blockchain entrepreneurs in China who are specialized in mining bitcoin.
The intended ICO, Russian Miner Coin (RMC) will let investors buy RMC tokens with either Ethereum or Bitcoin. Holders of this new token will be entitled to 18% of revenue generated through the usage of the company’s mining equipments – this is according to a presentation on the company’s website.
As a result, RMC will be making use of Russian designed semi-conductor chips usually used in satellites to reduce the amount of power consumed by mining set-ups and computers. This was made known by Mr. Marinichev.
“Russia has the potential to reach up to 30 percent share in global cryptocurrency mining in the future” Marinichev stated. He further disclosed that $10 million from ICO proceeds might be used to develop their processors to make for more cost-effective mining.
In recent times so many start-ups have towed the ICO path to raise funds to power their ventures. This is mainly due to the less stringent requirements associated with launching an ICO as compared to mainstream IPOs. Unlike IPOs investors do not buy shares in these blockchain start-ups, instead investors are allocated tokens specific to the start-up project and these tokens increase in value if the projects are eventually viable and successful.
Due to this proliferation of ICOs, the US Securities and Exchange commission issued a caution last month that it might begin to consider ICO tokens as securities with a possible resultant scrutiny of the space. They however stopped short of declaring a clamp down.
Lately mining for bitcoins requires special computers that run on chips with high processing power but consumes minimal power. Bitman Technologies in China is one of the globe’s leading producers of such bitcoin mining equipments. There are other notable companies in China and in other parts of the globe who are playing a pioneering role in bitcoin mining.
Russia seeks to have some of its start-ups play a leading role in the cryptocurrency mining space so as to rub shoulders with the Global leaders especially those in China. Russia has 20 gigawatts of excess energy capacity and a low electricity consumer price which is as low as 1.30 cents per kilowatt hour. This implies that the cost of electricity in Russia is actually cheaper than in China and RMC will be leveraging this. RMC seeks to make use of their competitive advantage with respect to cheaper electricity to take pole market position and possibly topple China’s Bitman Technologies Ltd.