What can we learn about Petro?
OPINION
By Juan F. Bolaños On Jul 10, 2018
The Petro (PTR), the cryptocurrency launched by the Venezuelan government, arose from the idea of former President Hugo Chávez Frías to create a strong currency backed by raw materials. The dream of the non-aligned countries (MPNA) whose president pro tempore is Nicolás Maduro, has been to have an international currency that directly competes with the US dollar with the aim of balancing the global economic hegemony that the United States has.
What is Petro?
Paraphrasing the introduction of the white paper -white paper- by Petro, he says that the chain of blocks allows the transfer of information and value without the participation of intermediaries, making possible the development of financial platforms that are transparent, efficient and non-discriminatory.
The Petro is a sovereign cryptocurrency backed by oil assets and issued by the Venezuelan State as a spearhead for the development of an independent digital economy, transparent and open to the direct participation of citizens. It will also serve as a platform for the growth of a fairer financial system that contributes to development, autonomy and trade among emerging economies.
The Petro will have the ability to overcome blockages, delays and limitations of the traditional financial system , favoring the growth of a new economic ecosystem based on trust, integrity, transparency, efficiency and speed that guarantees the technology of block chains.
Value backed by oil
According to the same white paper, Petro will back on the future price of crude oil extracted from reserves not yet exploited - Venezuela is the country with the largest oil reserves in the world - and will enjoy the status of legal tender for the country. payment of taxes, fees and other obligations to the Venezuelan treasury.
In other words, the value of Petro is tied to the willingness of the Venezuelan government to pay its creditors.
Given the history of irresponsibility in financial management and economic decision-making, there is no certainty that the Venezuelan government will honor its commitments.
We do not know with certainty if one day these oil reserves will be exploited in view of the large investment required to start producing these fields. The scenario could be compared with the hypothetical case that on Mars are discovered huge gold reserves that could not be exploited due to its high extraction cost. Likewise, Venezuelan oil production has been decreasing consistently since Chavismo came to power 20 years ago.
The nature of the block chain
I feel the need to repeat something I wrote earlier in the article The nature of the chain of blocks, taking into account that, in order to understand Petro's nonsense, it is necessary to first know what a chain of blocks is, the same as it must strictly comply -from the point of view of the purists, among which I include myself- with the following attributes. A blockchain must be:
- Open
- Without Borders
- Transnational
- Neutral
- Resistant to censorship
Open
The software that gives life to the chain of blocks is open source, therefore, nobody must pay licenses or royalties or ask permission to use and improve it. In the same way, any individual can participate in the network by downloading a partial or total copy of the block chain and acting according to the previously established consensus rules.
Without Borders
It is no longer about nation states as intermediaries of trust, it is a "redcentric" trust -according to the term coined by Andreas Antonopoulos, author and guru of Bitcoin and blockchain-, that is, based on computing, on software code , in the accuracy of mathematics. Without intermediaries, the network is the trusted part per se.
Transnational
The network works distributed in different geographical locations around the world in nodes that run an exact replica of the chain of blocks, thus preserving, the same state unanimously, the same truth that can not be modified arbitrarily by any of the nodes without there being a generalized consensus.
Neutral
It does not serve the purposes of any State, organization or institution. Each member of the network - called a node - follows the rules of consensus neutrally and, if not followed, is simply expelled. It does not matter who is the sender or receiver of the transaction, nor the value or the data that is being transmitted. In other words, it is a non-discriminatory network.
For a system to be open, without borders, transnational and neutral, it must defend these characteristics of any actor that intends to censor, freeze, modify, revoke and restrict transactions, or prevent the participation of users or countries.
Does Petro meet any of the characteristics mentioned above?
The answer can easily be inferred by the reader.
The value of the Petro is zero
From my point of view, the value is zero Petro considering that is backed by natural resources -even without explotar- of Venezuela, which means that the value you have this cryptocurrency absolutely depends on confidence in the Venezuelan government the which historically has given clear signs of uncertainty and of not honestly fulfilling its creditors.
Who trusts the Venezuelan government?
A cryptocurrency in the hands of a totalitarian and corrupt government is a perverse tool of social control. The government would have the ability to track and confiscate the funds with a "click", an attribution that could be used to persecute and extort opponents and dissidents.
The reaction of both the media and the investors, in general, has been negative for two main reasons:
His white paper demonstrates a lack of knowledge of blockchain technology. It is not entirely clear in which chain of blocks Petro will operate, whether in Ethereum or in NEM, among other confusing technical aspects.
The Venezuelan government has not fully complied with the economic obligations acquired with its creditors.
On the other hand, I believe that the fundamental and real reason why the Venezuelan government has launched such a crazy adventure is its urgent need to overcome the international credit blockade to which it is subject. In order to cover its excessive public spending, the government requires liquidity - which it does not have - despite having abused the issuance of bolivars to cover its fiscal deficit. The direct consequence of this uncontrolled monetary issue is hyperinflation and the aggressive loss of the purchasing power of its population.
Would you entrust your money to a government that has shown total irresponsibility and negligence in the administration of public resources?
For some years now, Venezuela has been going through a deep economic, humanitarian, political and institutional crisis that has forced more than four million Venezuelans to flee their country in search of a better future.
https://www.academiablockchain.com/2018/07/10/que-podemos-aprender-sobre-el-petro/
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