The only thing going up in Venezuela today is the inflation rate, homicide rate, institutionalized corruption and cost of living. Medicine, food and respect for human rights are rapidly vanishing, and the poor people that this revolution once claimed to represent have no institutions to run to. The regime has destroyed the institutions of this former democracy to keep its EU and US-sanctioned officials in power, the people be damned. Several books can be written about Venezuela’s historical economic and democratic collapse, but our aim is to look beyond that and to the day after, when free elections are held and the people can freely decide their future.
As a terminally ill economy with untrusted institutions and a worthless currency, Venezuela will be the best Petri dish for the “cryptoNation” experiment. To court investments, bring back its diaspora, and jump-start the fourth revolution, Venezuela’s challenges will be billed as the opportunity of a lifetime to build solutions. The dream is to evolve from a nation known for its Petroleum and Gold, to one know for its Digital gold and energy, that is our future.
Unfortunately, Venezuela’s Dictator, Nicolás Maduro, got word of that future and ran to hack its own version to keep himself and his cronies in power. We strongly advise anyone reading this to stay away from this kleptocurrency and wait for the day after.
The persecuted and virtually powerless political opposition in Venezuela has already declared this digital currency illegal, and kudos to President Trump for moving fast to sanction it. It’s no secret to the world that the Petro will be a tool for corruption, money laundering and terror financing — it wouldn’t be the first time. The “crypto-community” must therefore stand behind the people of Venezuela and reject this mockery, this centralized tool conceived to keep Venezuelans under communist rule.
The Petro is not a cryptocurrency, it is not decentralized and it is not anonymous, it is simply a trendier and shadier way to raise debt. Allegedly backed by 5 billion oil barrels under the Ayacucho Block Camp 1 of the Orinoco Belt, holders of Petro won’t be able to exchange it for Oil. It also has a mutable supply, meaning the regime can arbitrarily “print” as much virtual currency as it has Bolívares (Venezuela’s currency) — a currency so worthless, you can’t even buy Petros with it. If today the market will pay $USD 0.000004 for 1 Bolívar, then imho that is exactly what the market should pay for this pseudo-crypto currency.
The minimum salary in Venezuela today is around US$4/month, yet because electricity is cheaper than in China, a thriving community of crypto-miners developed over the past few years, desperate for access to foreign currency. Unfortunately, even though the Petro won’t be mined, police forces have raided and expropriated several mining farms -who got detected due to their increasing energy use to mine bitcoin. The regime is forcing miners to register in a database, or risk extortion and jail, effectively nationalizing the local industry. This is cryptowarfare.
If the Petro manages to raise funds, it would allow the regime’s elite to circumvent international sanctions and remain in power, all the while mining other cryptocurrencies with confiscated machines. Countries like China and Russia don’t have the need to experiment in such haphazard way with digital currency, but they are paying close attention to how this “cryptowarfare” unfolds in Venezuela, the results of which can permanently damage the reputation of the Bitcoin Evolution.
The day after this communist regime is gone, Venezuela will have to decentralize power, get investments flowing in, and empower the people. That’s when the real experiment of a cryptoNation will begin -and the Petro may not be such a bad idea if done transparently and truly decentralized- but until then, don’t bet your money on it. Stay true to the ideals of bitcoin.