Let’s look at the concept of Bitcoin mining in Venezuela. It is a dangerous trade to say the least and so far, a lot of people have landed themselves in prison over it. Venezuela’s own government have subsidised electricity. This means when miners are trying to use cryptocurrency to smuggle their own goods into the country, the government will then try and track and chase them by finding out how much energy they are using. When they are found, they are then either forced to go to jail or they have to pay for a bribe to try and get the charges lifted. So now is the currency embracing cryptocurrency? This makes the whole thing sound wonderful. Benites recalls how his company was shut down because he was a target for extortion. This was being done by public employees and even by the police intelligence agency as well. One of their officials from the agency was treating those who mined Bitcoin as being terrorists. They even came out to say that miners who were physically taking Bitcoins to the border to exchange them should also be arrested. The national intelligence agency have also come under fire by saying that there is a physical Bitcoin now so there isn’t even anyone to try and sustain the network. One Petro at the moment is supposed to get you around $60. This is the equivalent to around 3600 bolivars. They are backed by oil barels and these are produced by the oil company who are known as PDVSA. The catch is that the PDVSA also have a lot of debt and this amounts to around $45 billion. In real life, Petro doesn’t actually exist. At the end of the day, it is possible to have a single Petro circulating at all. This is especially the case when you look at the smart contracts and even the rules of the token as well.
In a way of course, the Petro is like a trick that is being pulled by the government in the 1920’s. They chose to invent the Retenmark to try and end the constant hyperinflation. They also tried to make it stable by then choosing to back it with a mortgage on all agriculture and businesses. Back then it did work and this is because property was something that Germany could understand. It was also something that they could hold onto as well but this time the whole thing is complete nonsense. When you back up a fiat currency with a cryptocurrency you will soon find that these are tied to something that has a ton of debt and they also can’t pay it either. So as you start to look into this, you will soon see that the whole situation is much more unstable than it first looked.
So when you look at Germany, you will soon see that the Petro is an attempt to raise funds. The ICO has already raised the equivalent of, apparently, $3.3 billion. This may be a stunt but by the looks of things, this stunt is working. This comes from Dickie Armour who works at the ICO consultancy at the Corre Innovation. The question here is that who are they working for? Are they working for the President? Or are they working for the people of Venezuela?
Cryptobuyer has been helping the people right from the start and they have been offering people gift cards for a ton of online stores. This includes shops like Amazon and they give you the chance to pay with cryptocurrencies. You can buy food, medicine and so much more all of them are priced in dollars as well. They would not be accessible in a country where the government are constantly trying to keep tight tabs on the currency exchange. They have stated that they are going to issue their own token through an ICO and this comes from Farias himself. When you look at Petro you will see that it is a functional and even a tangible product as well. It also has real demonstrational uses and to this day it has shown not to be one thing or even another. For some reason, it is banned from the international market.
When you dangle the prospect of a new currency you may find that this gives a lot of people false hope. Once you see the excitement is gone you will soon see that the people think that the Petro is exactly the same as Bitcoin but the truth is that it isn’t. Petro is a currency that is being issued and it is also being controlled by a corrupt government as well. A lot of people believe that the government is going to cause a lot of issues but it is safe to say that not much else can happen.
It is somewhat ironic because cryptocurrency is volatile and it is also very unstable as well. That being said, it is a completely unstable and it is a new concept. It is really supposed to rescue a fiat currency and you could say that there are desperate times when you have a starving population, that desperate action needs to be taken. This comes from Jonathon Fry who is from a company called Team Blockchain. He has come out to say that cryptocurrencies are not good at all, or at least all of them aren’t. If the government have managed to peg the bolivar to Bitcoin but it is safe to say that things might happen differently. This is because Bitcoin is not decentralised at all and this means that hackers won’t be able to take over it properly even if they tried. A lot of fans also argue that the essence of money is not about having any kind of connection to a central authority or even a central bank. When you look at Bitcoin you will soon find that the state cannot take it away either but with any fiat currency or even with Petro, it absolutely can.
So does it really matter if the Petro is a smoke screen? Why does this even matter? Caracas has formally launched the currency and now Russia and even Iran are considering some of the benefits of creating their own fiat currency, but it would have to be digitally based. All of these countries have the same things in common and they are authoritarian and they are also under a lot of sanctions as well. The co-founder of the blockchain institution has shown that there is a case in point, but there is no telling what is going to happen.