"Venezuela: Crypto Nation"
Venezuela has been in the media spectrum for a while now, mainly because of the country’s controversial government and the country’s economic problems. This is not the only reason why the country is making headlines nowadays. Nicolás Maduro´s government saw no other alternative in their economic problem and decided to launch a digital currency named Petro. The digital currency will be available starting this November 2018, and it will be a valid form of payment for goods and services in and outside the country.
Although, I believe Petro was created out of desperation; seeking to create wealth or at least stabilize Venezuela’s economy. I believe this is a great starting point to see how crypto works on a national level in a country. Many interesting things can be analyzed once it begins to circulate.; seeing the adaptation of the Venezuelan people to this new form of currency and eventually compare the economic impact that this cryptocurrency is having in the country. Regardless of the reasons why the government decided to launch their national digital currency, it may be the starting point to initiative other country’s to give it a try.
According to The Guardian, “Nicolás Maduro informed that each Petro coin will be backed by one barrel of the oil-rich nation`s petroleum. Apparently, this coin was designed to raise fiat cash and to function as a payment method for foreign suppliers now that most transactions have been blocked by financial sanctions imposed by the United States in 2017”. The government has expanded this and Petro is eligible to be used in foreign and national transactions.
Other announcements according to Diariobitcoin regarding this matter “Among the announcements made was the inauguration of the new physical headquarters of the National Superintendence of Cryptoactives and the Treasury of Cryptoactives, organizations responsible for the administration of the digital currency promoted by the Venezuelan government."
There are some differences in the way Petro will work. All crypto go thought the mining processesto validatea transaction and add it to the blockchain. In the case of Petro, “Maduro announced that the digital currency will not be worthless since its value will be fixed by the price of reserves of oil, diamonds, gold, iron, and aluminum." At first, this was strange to me because the whole background idea of crypto, starting with Bitcoin is the fact that it’s in a decentralized network with no third party interference. Having only the Venezuelan government regulate this may be alarming for people whose faith in the current government has been shut down.
Nonetheless, there can be a lot of speculation on how Petro will work or how it won't work, but I believe this is a process, and let's hope that things get done the right way and crypto is used and regulated fairly.
Hope you enjoyed it, feel free to comment.