The Petro and Venezuela: heaven and hell of cryptocurrencies

Venezuela, that country that announced the creation of the first cryptocurrency backed by a state, the Petro. For years, one of the countries with the largest mining community and Blockchain in America and from the first of September of this year is the first State to anchor the minimum wage per worker to a cryptocurrency. It is also one of the countries where Bitcoin has grown the most, first and then all the cryptocurrencies, since hyperinflation means that, even with volatility, it compensates for its use, even on daytime.

But the sky gets here … from this point the shadows begin

On August 30, the Reuters news agency, in a special, well-documented rebroadcast, announced that the Petro did not exist and that de facto could not buy or sell. Even in this excellent repotaje there are clear and dark as for example, that in this the fact that the Petro is still in fact an ICO (Initial Coin Offering) is ignored and as such there is still no blockchain linked to the Petro, that is, until now only a series of tokens based on the NEM blochain that correspond to anonymous investors.

But on the other hand the rest of the report makes clear that the Government of Nicolás Maduro has not created, from its first the publication of the Petro White Paper, no infrastructure beyond those available in the network to acquire Petro’s tokens, or the announced agencies that will regulate the crypto-currency, or the
resources or commodities that should support it.

The support that Petro has, primarily, is based on the future exploitation of the oil fields of
Atapire located in the central area of ​​the country that at the moment are abandoned waiting for exploitation, but above all are waiting for an investment that the government of Caracas can not afford at this time.

Although it is also backed by a basket of commodities that the Government owns, such as gold or diamonds, that basket is also in jeopardy because of the turbulent economic situation that Venezuela is experiencing because of the galloping hyperinflation that the country is experiencing.

The Government of Maduro refuses to give reliable information on the current state of the Petro, although Nicolás Maduro has instructed national banks to adopt Petro as a “unit of account”, thus reflecting their balance sheets in Sovereign Bolivares and in Petro simultaneously, which would be excellent news for the petro and the cryptocurrencies in general, but the bottom line is that the Petro, at this time has a completely arbitrary value set at $ 60, since that value has not yet been exposed to the market since the list of exchages authorized to sell the token is almost nonexistent, and the null capacity of the Government of Caracas to back it, in addition to many other doubts that at this moment lurk to the Venezuelan cryptocurrency.

Maduro’s bizarre economic policy does not help much either. To an unprecedented extent, the President of the Bolivarian Republic of Venezuela decided to address a so-called “Monetary Reconversion” and redenominate the Bolivar to Sovereign Bolivar and in that process the currency lost five zeros, that is, something worth 10.000 Bolivares is now worth 1 sovereign Bolivar.

“You dollarize the prices, I control the wages, I have decided to implement a new minimum wage based on
anchored in the Petro, that’s why I set the minimum wage for all salary tables Bs S 1800 or 0.50 Petros,
base for the salary update, petrolizando salary “indicated Maduro

The president said that the new accounting unit, the petro, has a value of 3,600 sovereign bolivars, or
360,000,000 bolívares fuertes, so the salary equals 0.5 petro.

Seen this scenario what could have been the news of the year in the world of cryptocurrencies has become an immense unknown with dyes of “cheating the solitaire” as it is impossible to know at this time how much the Petro will be worth despite the strong bet that Caracas government has done.

How can this situation affect the ecosystem of cryptocurrencies?

It is frankly difficult to predict. in the first place it is one more of the findings that the chains linked to states can not function given their natural tendency to centralized control, in clear counterpart to philosophy, more or less generalized, decentralization of cryptocurrencies.

On the other hand it is also quite clear that for any state it will be much easier, cheaper and more transparent to adopt any of the existing blockchain.

It also seems clear that with the Petro, the hopes of combating hyperinflation will vanish. But in this case, as always, the people have already made the decision by adopting cryptocurrencies as a refuge for the inflationary monster.

The blocking measures of the omnipresent US giant vetoing its citizens the purchase or sale of Petros are undoubtedly a factor to be taken into account as well as the huge campaign of discrediting and counterinflation that there is about anything that has to do with Venezuela. The dangerous equating of “Venezuela equal to” failure of cryptocurrencies “will always be in the air and is undoubtedly a threat to the cryptocurrency ecosystem.

However, the opportunity for cryptocurrencies to be a very valuable tool in combating suicidal monetary policies in failed countries is there and is an opportunity that the Crypto community and the Venezuelan people can not afford to lose.

Enric Martí

Enric Martí

Economy fan, hangued, hooked on crytocurrencies and junkie of audiovisual stuff...on rehab