Interviews

"Blockchain is a new reality that can not be stopped! 

  Sukhum. 6 November. Apsnypress. Elena Poluyan. The previous conversation with Minister of Economy of Abkhazia Adgur Ardzinba about the formation of a full-fledged digital economy in the country with the use of crypto-currency and blocking technology aroused great interest and new questions among the readers of Apsnypress. We addressed them to the minister and continue the "hot" topic.

 Adgur Amiranovich, usual money is known to be provided by gold and foreign exchange reserves, but what is the nature of the crypto currency that provides it?

 I do not want to disappoint you, but world currencies have not been provided with gold for a long time. The so-called reserve currencies, primarily the US dollar, which accounts for more than 60% of the world's foreign exchange reserves has not been converted into gold since 1971.

 In fact, the currencies of countries in which the issue of the national currency is tied to the reserves in US dollars or other world reserve currencies are nothing more than derivative financial instruments. In other words, modern fiat money ( red. legal means of payment in a country ) can be exchanged for goods and services in the issuing countries. The value of money itself regulates the market at the intersection of demand and supply.
   
 Thus, the attractiveness of a currency is determined by the level of economic development and the scale of the domestic market. It is for this reason that the US dollar is the most popular currency. This country accounts for more than 20% of world GDP. Although, there are also grounded expert opinions about the inverse relationship of the US economic well-being, but this is a different topic.
   
 As for the crypto currency, it also provides the attraction for investment or use as means of payment, guaranteeing the possibility of exchange, in our case, for goods and services in the Republic of Abkhazia. With the growth of the economy, the aggregate value of goods and services, the attractiveness of the Abkhazian crypto currency will spur the growth of its value. Unconditional differences and comparative advantages of crypto-currencies include security, transparency of transactions while maintaining a sufficient level of confidentiality, security and reliability.
   
 For example, early in 2012, all the distributed computing power of only the Bitcoin network used to operate the system exceeded the computing capabilities of any supercomputer in the world. It is also important that the turnover of crypto-currencies is practically non-existent, and the speed of transactions is incommensurably higher than any existing alternative types of movement of financial capital. There is no such thing as a human factor and it unlike the banking one, operates 24 hours all year round. And finally, it is an excellent tool that allows you to bypass any sanctions, because if you want you can keep the anonymity of the holders of crypto currency, while preserving the security guarantees of saving the capital and transactions.
  
  If Abkhazia will create its own crypto currency, how can it be attractive for investors?

 First, if we manage to do this quickly, which I very much hope for, then we will be the first country in the world to issue our national crypto currency. Many countries are moving very actively in this direction. For example, not so long ago, the Minister of Communications and Mass Media of the Russian Federation Nikolay Nikiforov announced plans to create a Cryptoruble in Russia in the near future.

 I understand and accept the position of many skeptics and people who are wary of such ideas. But it is important to understand the main thing when these technologies are clear and accessible to all when the largest countries become issuers of their own crypto currency, the window of opportunities for Abkhazia will close and we will miss our historic chance.
  
 Only now, in a period of global uncertainty, we at the expense of our dynamism, can easily get ahead of many. The world is moving swiftly in this direction and we have the choice to remain outside observers or try to make a bold step forward. And given the absence of our financial system in the classical sense, the risks for us are minimal.

 The attractiveness of Abkhazia for potential investors should be based on the fact that we will create the most comfortable conditions for turnover and incorporation ( red. inclusion, incorporation into something) of crypto-currency assets. We are just now working on creating such solutions with the involvement of external experts.

According to experts, owners of various crypto-currencies are not interested in increasing the number of its varieties. Will Abkhazia be able to withstand competition in this market?
  
 As I said above, the attractiveness of Abkhazia and its competitiveness depends entirely on the dynamism and timeliness of decision-making aimed at creating the most comfortable conditions for the introduction and use of blocking technologies in our country ( red. the block is an information packet containing all the previous information and some new ones, and the whole chain is a database distributed between a plurality of participants and operating without centralized control), which, according to our estimates, can be done in a relatively short period of time with a view to minimizing risks.
  
 Also, it should be noted that there are already companies and rating agencies that specialize in providing consulting services and assessing the risks of certain projects emerging on the ICO ( ICO- the "initial coin offering" - a form of attracting investments in the form of sales to investors of a fixed number of new units of crypto-currencies obtained by a single or accelerated emission), investments in ICO along with high profitability potential are characterized by high risks. There are many examples when the initiators of projects simply disappeared after fundraising. In our case, there are no risks for potential investors. For our part, we guarantee that all the funds raised at the first stage will be directed to the development of Abkhazia's economy, the modernization of infrastructure, which in turn will lead to economic growth of our country and, accordingly, to the growth of the value of the Abkhazian crypto currency in world markets. Targeted use of funds and quality of projects will be provided by a special decision-making system on the allocation of funds raised under the ICO. Investors will retain full control over spending of funds, voting for their allocation for each separate project according to the rules of the DAO (decentralized autonomous organization acting on the basis of rules of smart contracts).


And most importantly, Adgur Amiranovich, as you noted, the value of the crypto currency is in its decentralization. Is it possible that international financial institutions and bankers will simply surrender their positions and release control over the movement of capital from their hands? What is the lifetime of the crypto currency?

 I have already said that blocking technology is a new reality that can not be stopped. Theoretically, this can only be done by disconnecting the Internet, which itself sounds ridiculous. The leaders of the world financial market understand this very well and have already started a full-scale study and implementation. For example, two years ago, JPMorgan Chase, one of the world's largest financial holdings, announced plans to invest $ 9 billion in innovative technologies, including robotics and blocking. In August of this year there was news that Vnesheconombank of Russia and Ethereum foundation signed an agreement on long-term partnership, within the framework of which it is planned to hold joint development of educational programs and training of specialists in the field of blockchain for state companies and authorities.  

 In this connection, answering your question about the life cycle of crypto-currencies, I can cite the famous saying that the stone age ended not because the stones ended, but because mankind has learned to extract and use metals. Likewise, the life of the crypto currency will end only when people create more advanced technologies that will exclusively displace the crypto currency, but in no other way.
  
As for control, from the point of view of ensuring security and protecting the rights of market players, the advanced countries are actively creating regulatory strata to regulate the turnover of the crypto currency, and we will send significant funds for this purpose, attract international experts and use the best practices of other countries.