Kolion: Local Farmer In Russia Starts Own Cryptocurrency (KLN Coin)
The very nature of blockchain technology lends itself to use by underrepresented populations and new applications. Especially in those areas of the world where access to traditional financial resources may be extremely lacking, cryptocurrencies can offer a unique opportunity to get involved in a booming economic sector.
This is exactly the market usage being employed by some farmers in Russia. Mikhail Shlyaobikov is largely known as the cryptocurrency’s creator, and it has been adopted by an untold number of farmers near the small town, Kolionovo, after which it is obviously named. The town, only 80 miles from Moscow, often sees the coin used for transactions by its residents—as well as farmers in nearby towns.
The currency has been employed in various ways throughout the community. In many ways, the cryptocurrency community ought to embrace this unique type of application of blockchain technology; there is an innate ideological benefit to using a decentralized technology to skirt the traditional economic powers that exist in countries like Russia. The story of the community’s hidden little crypto-secret is extensive, but helps to characterize a modern struggle to get the coin off the ground and into a changing market.
Russian Farmer Humble Beginnings
Almost ironically, the digital currency original began as a traditional paper bill. The bill was called the Kolion, and it was banned in 2015 by a Russian court, citing economic reasons for preventing it from being used henceforth. Deciding that perhaps the ruling was due in-part to the competition in the world of fiat currency, Shlyapnikov took to online technologies to try to convert it into a digital currency.
The first step in securing support for the coin was to follow the beaten path of hundreds of altcoins in the past few years—he created an Initial Coin Offering. The offering was surprisingly successful, raising over $500,000 USD for his new currency.
But as the international community became interested in the prospect of a farmer-led decentralized currency, the price of the coin eventually skyrocketed. According to the farmer, Shlyapnikov owns millions in the Kolion coins, which persist as a currency to this day.
Kolion KLN Coin Ecosystem
One of the most unique aspects of the coin is how users obtain it. It cannot be gained by mining, but can only be purchased, or “plowed.” Plowing is a process by which consumers assist residents in close towns to the origin-point of the currency. Consumers can earn the currency by helping others farm or do construction work.
It is estimated that nearly one hundred farmers currently use the currency. Its founder has outlined how the currency may impact the way that people do business within Russia. Specifically, Shlyapnikov believes that his currency lets local farmers escape the traditional economic system of Russia, including an aggressive small business loan structure.
One notable obstacle to expansion is that the currency is likely to face significant regulatory scrutiny on the part of both local and state governments within Russia. Shlyapnikov himself has been clear on his reluctance to expand the currency, citing a fear of new “obligations” imposed by the powers that be.