Corrupt Venezuela & Its Petromoneda
Venezuela is a country in South America that has become a totalitarian hellscape. It has been under the rule of the dictators Hugo Chavez and now Nicolás Maduro for many years, and they have destroyed Venezuela’s economy. The Bolívar Fuerte, the currency of Venezuela, experiences thousands of % of inflation per year due to the government printing money out of control to pay their debts. Now, the country has launched what appears to be another scam called Petromoneda.
Before we discuss what “Petromoneda” is all about, let’s do a quick recap of what’s been going in this isolated country. Essentially, the government of Venezuela is stealing all the money held by Venezuelans each and every year; the exchange rate has gone from 10 Bolívar Fuerte per USD to over 100,000 per USD in less than a decade.
Desperate Attempt At Launching National Cryptocurrency
The national currency of Venezuela has literally become unusable. In an attempt to make a new national currency, Venezuela has released their own cryptocurrency called Petromoneda. It is branded as the sovereign cryptocurrency of the nation, in order to restore Venezuelan economic freedom. It is 100% premined and about 80% of the coins were supposedly sold by the government for billions of dollars, although there is no firm evidence of this.
The technical whitepaper kept changing before launch and the block explorer is impossible to view at this time. There is no guarantee that this crypto is a decentralized cryptocurrency; it could easily be a centralized digital ledger controlled by the totalitarian dictatorship of Venezuela.
Tall Claims From a Highly Corrupt Government
Supposedly Petromoneda is backed by oil. While it is not impossible for a cryptocurrency to be backed by physical assets like oil or gold, it does require sophisticated technology and documentation. And, even if it has all that, it is still easy to manipulate such a system since the resources have to be held by a centralized authority who can go ahead and lie about their reserves.
There is nothing in the cryptocurrency’s whitepaper describing a system for properly linking oil reserves to the cryptocurrency. Moreover, considering Venezuela’s awful track record as a totalitarian dictatorship that lies to its people for a living, it is possible that this crypto is not backed by oil at all. Venezuela pegged the price of its crypto to the price of oil during the initial sale, which doesn’t make any sense, and it is shocking if anyone fell for such an obvious scam.
Just A Scam?
Thus, Venezuela’s Petromoneda could possibly be the worst cryptocurrency ever created. That’s if it is actually a cryptocurrency and not just a centralized digital ledger. There is no visible block explorer to prove it is a functioning cryptocurrency. The technical whitepaper notably changed a bunch of times during the launch, and it is probably not backed by oil which negates its entire premise and value.
Additionally, President Trump banned Venezuela’s crypto and it has become unavailable on any normally used exchanges; it isn’t even searchable on CoinMarketCap.com. Just like the national currency of Venezuela, the Bolívar Fuerte, “Petromoneda” could be on the fast track to being absolutely useless and just a pathetic tool to make money for a totalitarian dictatorship.