2018 was, in general, a terrible year for crypto. Venezuela, a little third world country in South America, experienced a cryptocurrency rebirth that took these instruments from almost unheard of to something in the public debate. Sadly, this knowledge did not seem to cause a betterment for the population, and the government forcibly introduced its own state-backed crypto, the Petro. In a four part series, CoinSpice.io examines the year from the perspective of someone there, on the ground, who experienced it all.
January: Pre-Petro ICO Blues, Petro Declared Null By National Assembly
Venezuelan president Nicolas Maduro began the year with an initial coin offering (ICO) called the Petro. It’s the first national cryptocurrency in the history of the world, and he takes pride in asserting as much. A mixture of commodities will supposedly back the effort, including oil, gold, and diamonds, the most important natural resources available in the country. He sets the ICO presale for February, and Petro can only be purchased using foreign hard currency or other cryptocurrencies.
Venezuelan opposition, who have the majority of the seats in the National Assembly, declare the project illegal on the basis natural resources of the country cannot be sold without presenting to the Assembly first. Maduro leverages his political power and the ICO continues unabated, and government specialists say they will issue more than 100 million Petros to start.
February: Petro Launches with Great Fanfare, Last Minute Changes, International Community Doubts, and EatBCH Emerges
The Petro presale is launched on February 20 at 12:00 AM with great fanfare from the government. The vice-president, Tarek El Aissami, gives a speech about the strength of the coin. This is indeed the first national cryptocurrency, and the first also backed with natural resources. However, there is a last minute change: the whitepaper defined the Petro as an ERC20 Ethereum token, and the now launched coin is a NEM-based token. For cryptocurrency experts such a change showed a real lack of preparation and professionalism.
The government still celebrates the launch and calls it a success. President Maduro claims there are zillions in secured offers for the crypto asset — more than 290,000 offers to buy the Petro, the government claimed, and most of them willing to spend dollars and bitcoin. The international community, however, starts seeing the Petro as a debt bond. Bloomberg publishes an article about how the Petro is just another “way to hide new international debt behind crypto mumbo-jumbo.”
EatBCH, a charity that has now extended to South Sudan, surges in Venezuela as a way of helping ailing and hungry people to get a meal. It’s sponsored by several people donating Bitcoin Cash (BCH). These were the humble beginnings of this organization for our friend José.
March: Russia, Russia, Russia!, US Citizens Banned from Buying Petro, Bitfinex Denies Listing
Time magazine unveiled a bombshell article, declaring the Petro is nothing more than an attempt by Russia to undermine the power of US sanctions. They claim Russian collaboration was a pivotal in creation of the Petro, and Putin was directly involved in the idea. Even prior to the revelations, Trump had already banned US citizens from buying Petro or any new Venezuelan crypto asset.
Using an executive order, President Trump had indeed banned the Petro from US markets and exchanges. His action was mostly due to it supposedly being designed as a “bond” to sidestep US sanctions and get a stream of fresh foreign currency to alleviate the already difficult economic situation in the country.
In the midst, with Maduro stating that some renowned exchanges would list the Petro, Bitfinex released a statement thwarting rumors regarding a potential listing. “We have never had plans to include the PTR or similar tokens in the Bitfinex trading platform. In light of the U.S. sanctions and the other clear sanctions risks of dealing in these products, Bitfinex will not list or transact the PTR or other similar digital tokens,” the exchange explained. It was a crazy first quarter.
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