Venezuela’s efforts to use cryptocurrency to get around its now worthless fiat currency are meeting with the same inept management issues that plagued the fiat currency. As many predicted, the state crypto is looking more and more like just another crap coin.
|The Venezuelan Government Is Doing an Ethereum Token Sale to Support Its New Cryptocurrency|
Controversy has surrounded the Petro, the price of which will be pegged to the value of Venezuela’s oil per barrel—roughly $60 in early January, according to Reuters—since day one. Opposition legislators in Venezuelan Parliament see the currency as an “illegal” attempt by President Nicolás Maduro to essentially get advance payment for the eventual sale of its oil reserves. Cryptocurrency enthusiasts, meanwhile, have argued that a centralized government creating a decentralized currency defeats the purpose of the technology entirely.
The Petro white paper, released on Tuesday, will only add fuel to the fire of criticism. (The Petro site was offline all morning, but government-supported news outlet Alba Ciudad uploaded a copy, which we’ve re-uploaded below in case that goes offline too.) The white paper reveals that prior to the Petro’s launch, Venezuela will create a token on the Ethereum blockchain and sell it. Tokens are not cryptocurrencies, like the Petro will be—they’re digital assets created out of thin air and their value is only whatever people are willing to pay for them.
Most token sales on Ethereum (events known as Initial Coin Offerings) are used to raise money to fund development, but the real fundraiser for Venezuela will be the public offering of Petro itself. Instead, according to the white paper, the token pre-sale “will promote and guarantee demand for the Petro Initial Offer, which will be made later.”
|Read More at Vice|