Nicolas Maduro announced that Venezuela will have an official cryptocurrency called Petro backed by gold, oil, gas and diamond reserves.
Venezuela is the country where defective, refining and hydroelectric bottles are manufactured that do not work because of lack of talent and where there is a crisis of teachers and food. This idea may never take off.
But let's assume that yes.
Cryptocurrencies such as Bitcoin are digital assets based on algorithms that give unique access to a value in a distributed and decentralized database called Blockchain. That unique and transferable access is the value that can be transferred. A more complete explanation is in our video of what Bitcoin is and the Bitcoin and Blockchain Course.
If the Petro is backed by reserves of gold, oil and other physical goods, it implies that it will come pre-mined and with a limit. So mining new tokens would not be possible.
In this scenario, it does not need to be crypto or take advantage of decentralization and trust based on algorithms. It can only be a MySQL in a Miraflores server. Something like that already exists: a status bonus. The Petro would be the same without guarantees or intermediaries. And Venezuela has already gone bankrupt of its bonds in November 2017
Ecuador is a country close to Venezuela, with shared ideologies and an electronic currency two years ago. How was it for them?
Ecuador and e-money, the Ecuadorian electronic currency
In Ecuador, Bitcoin is illegal. Ecuador is in the process of converting its money into an electronic currency since 2015. Moving from a dollarized economy to a more rigid control over people's money. This allows him to exercise monetary control parallel to the dollar (which they do not control) and deanonymize all transactions in the country.
But this only works if the currency is used. Two years after it was launched, 71% of Ecuadorian money is not used at all. And in a country of 16 million people, only 402,515 have e-money accounts.
The cryptoeconomy of Venezuela with bitcoin.
Venezuela is one of the countries that most Bitcoin mine in the world. To the point that it is a crime since electricity is subsidized.
Since November 14, 2017 the economy of Venezuela is considered bankrupt. 2015 had 100% inflation, the highest in the world. Breaking record 2016 with 800% inflation and 80% of its population living in poverty. At the beginning of the year, 75% of Venezuelans had lost 8.5Kg of weight for literal lack of food. A million children in Venezuela do not go to classes because of hunger.
Delcy Rodríguez, the president of the National Constituent Assembly denies that there is a humanitarian crisis and calls those who suggest it traitors.
It is illegal for a Venezuelan to exchange Bolivares Fuertes for dollars without explicit permission from the government. So investing in Satoshis and Bitcoin is the only way to ensure a future where each person's finances are worth something.
Meanwhile, the government of Venezuela does not stop printing money, the assured way of collapsing the economy.
And in a country with constant electrical system failures and daily blackouts, how would an electronic currency work?
There is no logical reason or sufficient evidence that Venezuela can issue a cryptocurrency, beyond the most fraudulent ICO we have seen and the first created by a government. When a whole country collapses and no one lends you money, why not launch an ICO?
It does not mean that for Venezuelans there is no hope. Both Argentina and Egypt went through periods of control and hyperinflation, floated the currency freely in international markets and although there was a time of inflation, it does not come close to the crazy percentages of Venezuela.
No currency in the world is backed by gold in our time. Neither the dollar, nor your pesos, none.