GOSTCoin: The History of the First Cryptocurrency on I2P
The internet is filled with countless videos and articles about cryptocurrencies. The surge in popularity of anonymous digital money in the public consciousness began around 2016, largely due to the active use of Bitcoin on underground marketplaces. Because of the open nature of the technology and the widespread use of buzzwords like “crypto” and “blockchain,” a flood of short-lived cryptocurrencies appeared. These coins would artificially inflate in price, attracting both business investors and curious onlookers. The classic scheme was simple: create a bunch of worthless tokens, pump up their price on any exchange, and then sell them at the peak, pocketing real money in exchange for useless digital assets.
By 2018, cryptocurrencies had shifted in the public mind from a panacea for anonymous transactions to a tool for speculation. Hundreds of these short-lived coins had died off, and Bitcoin’s price had shown wild swings, offering the chance for both huge profits and devastating losses.
This article is dedicated to a cryptocurrency born at the height of the technology’s popularity. Unlike other no-name projects, this one was developed by a reputable team and was never promoted on Instagram accounts with millions of followers. Below, you’ll learn about the world’s first crypto coin fully adapted to work through I2P—with no need to access the regular internet, where requests can be intercepted, analyzed, or blocked.
AnonCoin and GOSTCoin
The development of the first cryptocurrency designed to work over the anonymous I2P network began in 2013 by a Norwegian programmer known as Meeh. This was AnonCoin. At the time, cryptocurrencies weren’t widespread, but those in the know saw special potential in a coin operating through a hidden network. In 2015, orignal—the founder of the i2pd project—joined AnonCoin, followed by several other anonymous developers with recognizable nicknames in certain circles. Gradually, the PurpleI2P group, developers of the I2P router in C++, joined the project.
AnonCoin had a bright future—if not for one issue. The main developer suffered (or perhaps enjoyed) a drug addiction. As a result, his lack of critical thinking made him ignore advice. Eventually, Meeh disappeared entirely. As old-timers say, he burned out. With most developers disagreeing on many project details, it became impossible to continue. The Russian-speaking part of the small community decided to fork the project and develop it separately. The new project was named GOSTCoin. At the time of the split, AnonCoin still couldn’t function properly over I2P.
GOSTCoin is a cryptocurrency that uses Russian government cryptographic standards and was initially designed to work over I2P. The project was founded in 2017, marking the effective end of the previous project.
The first thing that stands out is the “GOST” in the name. GOSTCoin is based on GOST R 34.10-2012 and GOST R 34.11-2012: 34.10 is a digital signature function, and 34.11 is a hashing function. The 34.10 digital signature standard is similar to the foreign ECDSA algorithm (elliptic curve signature), and the 34.11 hashing function (Streebog) is similar to SHA256 and SHA512.
While the use of GOST might seem like a joke, the choice of the Russian standard was deliberate. All Bitcoin forks used the same secp256k1 curve for signatures, which theoretically made them equally vulnerable. At the peak of crypto’s popularity, many specialists were eager to experiment with various attacks. If a complete dictionary of digital signatures on the secp256k1 curve existed, it could compromise almost all cryptocurrencies. Using the GOST R 34.10 signature set GOSTCoin apart from the crowd. Today, it’s not the only coin using a non-standard signature, but such coins are still rare, while specialized software for generating Bitcoin-like addresses is becoming more common.
Russian cryptographic standards directly mention the Federal Security Service (FSB), which raises some concerns. On the other hand, it means GOSTCoin uses the same security standards as Russian government agencies. In truth, common foreign cryptographic standards are also directly or indirectly affiliated with European and American security agencies. It’s just the way of the world: cutting-edge technologies are first adopted by law enforcement.
You can find information online about audits of these Russian standards and conclude that theoretical weaknesses exist in everything, but exploiting them in practice to attack GOSTCoin is pure fantasy. There’s no communication with the FSB when using GOSTCoin.
Who and Why?
After splitting from AnonCoin, a lot of work was done to make GOSTCoin a functional tool for anonymous financial operations. Notably, the development of a stable coin working over I2P was fueled solely by the developers’ enthusiasm. This is common for open-source projects, but in GOSTCoin’s case, there’s an extra factor: the developers could have profited from their creation—it’s not just a cryptocurrency, but an anonymous user’s dream—yet you’ve probably never heard of GOSTCoin. That’s because it was never widely advertised. From its first release and even four years later, GOSTCoin is traded on only two or three exchanges, one of which is on I2P.
Initially, the price rose above twenty rubles per “gost.” At the time of this article’s publication, it hovers around two rubles. The fact that the currency has existed for several years at a low price, with the same people still involved, supports the idea that the goal was anything but quick profit. Most likely, it’s about ideology, a drive for privacy and anonymity—the core of old-school anonymous users’ beliefs. For the record, this article was created by me on a voluntary basis, and at the time of publication, I hold 100 coins, mined for fun on a 1GB graphics card. That’s less than 300 rubles, so my interest is also purely out of enthusiasm and research curiosity.
The developers’ enthusiasm in 2017 wasn’t just “for its own sake,” to use Kant’s phrase. Their weekend hobby had clear horizons. According to one active community member, there were discussions among developers that their coin, using standardized Russian cryptography, might attract the attention of a major Russian financial player like Sberbank or VTB. To get noticed, they created a Reddit thread (which was banned due to lack of moderation) and published a couple of Russian-language news articles. At the time, cryptocurrency wasn’t legally recognized as a payment method in Russia, though the technology was already well-known. Perhaps the group hoped the world was on the brink of crypto-anarchism—but alas. Judging by the current state of digital money, it’s safe to say that an anonymous coin never really had a chance in a world where financial transparency and total control are paramount.
GOSTCoin’s established niche is quite modest: the only place it’s practically used is an anonymous marketplace on I2P. There you’ll also find one of the few exchanges where users buy and sell “gost” for Bitcoin and other cryptocurrencies (no link provided for ethical reasons, as the exchange also trades controlled substances). The coin’s mining hashrate is quite low. At the time of writing, it’s comparable to mining on sixty average graphics cards. Despite this, a mining pool is still maintained on the network.
GOSTCoin in 2021
After reading this, you might want to check out the coin for yourself. It’s easy to do. Start by visiting the official website, where you’ll find all the useful links. Pre-built wallet binaries for Windows and Android are available in the official GitHub repository, while users of other operating systems will need to build the wallet from source. Instructions are provided. Note that to work over I2P, you’ll need an I2P router with the SAM interface enabled, as explained on the main page of the official repository. In i2pd, SAM is enabled via the configuration file with the parameter enabled = true in the [sam] section. Mining software is also open source and easy to find.
To back up your wallet, save the wallet.dat file from the application’s working directory. In Unix-like operating systems, this is usually ~/.gostcoin/, and in Windows it’s %AppData%\Gostcoin\.
This article is based on the text from a video. This material is not a call to action to buy the mentioned cryptocurrency. Any financial operations with GOSTCoin are done at your own risk.