February 26, 2019

Russia Proposes New Oil-Based Cryptocurrency To Replace Petrodollars

The past week has not really been rich in developments on the crypto market. Some news from Russia, however,  are calling for attention in the community. The lower house of the Russian Federal Assembly, the “Duma”, is scheduled to carefully review and approve a new crypto regulation next month. What is even more interesting: the Energy ex-Minister Igor Yusufov has reportedly suggested the development and the introduction of an oil-backed cryptocurrency. Furthermore, the Energia corporation, which Yusufov is currently managing, is at the final stage of the oil-backed crypto project’s roadmap.


Recently interviewed on the matter, Igor Yusufov pointed out several positive things that the adoption of a crypto settlement system would bring. First of all, it would result in the avoidance of costs related to the use of currencies that are not backed up. Secondly, the exchange rate fluctuations associated with fiat money will no longer be an issue that adds up to the oil trade related risks. Last but not least, the new settlement system would potentially result in a decrease of trade restrictions and commissions.

According to the former Energy Minister, the blockchain will have the capability of checking and verifying every single oil barrel in the whole chain, and this will be absolutely free of charge. What is even more intriguing is that the new system would potentially be used not only for crude oil and gas trades, but for any other exchangeable resource.

Last week, the crypto community also witnessed the launching of a new startup named CasperLabs, whose main goal is the development of a new blockchain based on proof-of-stake, the protocol commonly associated with Ethereum. CasperLabs announced that Vlad Zamfir, the main researcher of the Ethereum Foundation, is appointed a lead protocol architect of the startup and that his research work on PoS will be sponsored by the company.


"CasperLabs is launched to develop a new blockchain based on proof-of-stake protocol"


Proof-of-stake is a consensus model made to validate transactions without the use of proof-of-work mining, where users compete to solve complex mathematical problems, running a computationally intensive and random process, providing answers on a trial and error basis. Implemented by Zamfir in the early development stage of Ethereum, the Casper Correct by Construction (CBC) is just one among various methods to implement the idea within the PoS model.


In an event a few days ago in New York dedicated on the launch of the startup, Vlad Zamfir spoke about his work on the process of “sharding” - the defragmentation of a distributed system - in the Casper CBC framework context. The latter saw its development together with the Casper the Friendly Finality Gadget (FFG), the creation of which was credited to the Ethereum founder Vitalik Buterin and the researcher Virgil Griffith. These two recognizable frameworks draw solely on the same research and are based on slashing conditions and validator reward staking.


While the FFG model had been fully implemented on the Ethereum blockchain, back in the days the Casper CBC was considered a version in progress which still needed extensive testing. Now Zamfir will focus on the Casper CBC aiming to develop it into a completely decentralized, sharded and scalable blockchain of a new generation. The startup has already been promised funding of $20 million from investors like Galaxy and BlockTower. Confirmation of the funding details are expected from the startup in the near term.