Venezuela's Oil-backed cryptocurrency is a giant scam, here's why.
Image by Beto
Petro is the first state issued cryptocurrency, readers should know that the Venezuelan government didn't come up with this out of a good will, but rather with the intention of bypassing sanctions imposed by US and European agencies against Venezuelan government officials that have violated human rights, engaged in terrorism sponsorship, drug trafficking, racketeering, human rights violations and money laundering.
Venezuela has nearly incomprehensible forex controls which make nearly impossible for common citizens to procure foreign currency to participate in the purchase processes of the Petro asset, only a few Venezuelans who are brave enough to give their personal data (making themselves open to extortion) are opening Petro-wallets while signing a dodgy-commit-to-buy contract with a government widely known to commit foul play.
The chavista regime rounded up a sordid cast of characters to come up with the Petro:
Photo by AP
- Gabriel Jiménez: A nerdy-looking goofball opportunistic kid who went from ardent chavismo opposer that worked for the US Congress that pushed sanctions against the chavista regime during the Obama administration to become the Petro developer team head honcho with a low-rent tech start up that just imitates what everybody else is doing.
Photo by Zeus Exchange
- Denis Druzhkov: A shady russian businessman with a dubious reputation in the trading business, whose company Zeus Exchange is set up to avoid regulatory authorities and the Know-Your-Client anti-money laundering regulations.
Image taken from youtube, jump to 55:34 the guy holding the smartphone is Denis Druzhkov
- Fedor Bogorodskiy: A Uruguay-based Russian businessman that claims that his company, Aerotrading is "the biggest blockchain consultancy company".
If this company is "so big", then how come it created it's website only a day after the Chavista administration announced february 20th, 2018 that they're partnering with them in order for Petro to take off?
You can't make this stuff up.
These guys are so shady and clumsy that it's impossible for them to cover their tracks in the internet.
It is also both interesting and annoying that there's Russians helping develop the Petro when the Russian authorities have aborted state emissions of cryptocurrencies fearing that the Russian Central Bank can lose power.
So from a geopolitical point of view, Venezuela is a lab experiment, and it makes a lot of sense because the Russians are aware that the Bolívar's worthlessness is due to the fact that the Central Bank of Venezuela has been financing the government's fiscal deficit by printing banknotes. This fact, along with the dependency of chavista regime from Russian loans has made
Venezuela the perfect scenario to try out a state-issued cryptocurrency.
Petro's failure to launch
Even to the most cryptocurrency freaks out there, that know everything that there is to be known about crypto, Petro's launch is completely confusing.
The launch of the Petro has gone through many changes, stumbles, inaccuracies, and meaningless explanations from the authorities who are responsible of it.
Petro's first whitepaper release was delayed in January 2018, riddled with grammar errors and mistakes it explained that this cryptoasset would use Ethereum's ERC-20 token, a gold standard amongst different ICO projects around the world.
That same whitepaper pointed out that only 100.000.000 Petros would be emitted. Evidence shows that more Petros are being emitted even as we speak.
Petro's whitepaper pointed out that 38,4% of pre-sale tokens would be available through a website and the people who bought those tokens would get a discount. Petro's development crew never announced how the discount would be calculated.
That pre-sale was scheduled for February 20th, 2018.
On February 20th, 2018, the Petro development team announced that the tokens wouldn't be based on ERC-20. They'd be based on mosaic tokens from the NEM platform.
Creating tokens in NEM is a lot easier than in Ethereum because NEM doesn't requiere you to have a lot of programming and coding knowledge, while Ethereum requires the developers to program the contract, it is a lot simpler with NEM, for the smart contracts required can be payed and have them pre-programmed and delivered to the user.
In order to do this, a commission fee is payed in XEM and the tokens are deposited in a wallet.
Why change from ERC-20 to NEM?
The answer is simple, Jimenez's team lacked the know-how.
Petro's first website had a lot of issues, javascript errors made it nearly impossible to register, email confirmation would take hours because the Laravel PHP web framework was poorly implemented, and many users complained in twitter about his.
That same day a lot of scams took place in the block chain, in which several fake Petro tokens were sold based on ERC-20 from shady coin exchanges. The government propaganda agencies quickly did a PR campaign to point out that these wallets were fake, although not a single spokesperson within the Cryptoasset Superintendency made a statement about this. A source I contacted for information on this issue didn't know if this was because of fear that any statement would cause panic amongst investors or just internal foul play.
The day that the government claims Petro was launched all you could do was register in a faulty website and sign a contract that committed you to buy X amount of petros, but there was no way to buy the cryptocurrency or set up a wallet.
The chavista administration boasted that the Petro raised over 700 million dollars on its launch, an amount so large that would have put the Petro development team in the top three valuations for ICO's, way above teams with a good reputation and backed by venture capital firms.
The Petro development team isn't living up to what they wrote in their whitepaper
Communist propaganda isn't compatible with reality, and you just can't make stuff up in things like the blockchain: There hasn't been a single transaction within the Petro blockchain ledger that doesn't belong to the developers, all they've done is create more tokens in different accounts.
The very fact that Petro developers are a sordid cast of characters that aren't living up to their word in their whitepaper, along with unexpected changes without any logic, concrete and coherent explanation on why these changes are taking place and a corrupt administration would make any investor go away.
Venezuela's economic downfall is the product of corruption, mismanagement, forex controls and price caps. The International Monetary Fund projects Venezuela's inflation rate for this year to be 18,000%. A cumulative fall of the gross domestic product since 2013 caps at 50%.
With a failing Oil Industry that makes up about 90% of exports and riddled with foreign debt, approximately 200 billion dollars, not including other compromises that could add up to another 100 billion, the Maduro administration is desperate for cash.
According to the government whitepaper, one hundred million Petro tokens were to be issued at a price of 60$ US dollars, so assuming all petros are sold, that would only add six billion dollars to the Venezuelan treasury, not enough to patch the hole of the debt.
With the improvisation that characterizes this administration, the initial offering of one hundred million tokens simply won't satisfy the financing that Maduro's tyranny requieres, so his crypto minions decided to release more tokens.
Ever since the NEM Petro wallet was created more than one hundred and sixty nine million more Petros were created in addition to the first one hundred million initially outlined in the whitepaper.
The amount of tokens created with these has been multiplied by multiple wallets and is now susceptible to change. Petro advocates claim that these wallets are tests and that maybe they wouldn't be used in the future but it isn't up to april, when the Petro team starts depositing tokens to the people fool enough to buy them that we'll know.
If you want to help Venezuela, support the Venezuelan community on steemit and stay away from the Petro, for it is a disguised, non congressional approved public debt offering which is intended to bypass the regulations imposed on the Venezuelan regime so some chavistas can launder their ill-gotten dollars.
Thank you for reading.
Que viva Venezuela
