Category Archives: Maduro

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Venezuela to Airdrop Petro for Christmas

  • Venezuela is conducting perhaps the first official government airdrop of a cryptocurrency

Venezuelan President Nicolas Maduro has announced that workers, retirees, and military personnel will be receiving 0.5 Petro each for Christmas. This may be the first official government airdrop of a cryptocurrency.

Currently 0.5 Petro is worth USD 30, and this is actually a significant amount of money in Venezuela, equivalent to 1.364 million Sovereign Bolivars. Hyperinflation has ravaged the country in recent years, so this airdrop has the potential to make a difference for Venezuelan families during the holiday season.

In order to be eligible for the airdrop Venezuelans will have to download the PetroApp. In theory, this should increase Petro adoption, since the PetroApp can be used to buy and sell Bitcoin, Litecoin, and Dash. Venezuelans who receive the airdrop can trade the 0.5 Petro for the equivalent of these major cryptocurrencies.

Although the Petro itself has had a controversial history, apparently 400 businesses now accept the digital asset, so it can be used as a currency to buy real goods and services.

 

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Venezuela Mandates That Petro Be Used for Housing Initiative

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The President of Venezuela, Nicolas Maduro, has mandated that the Petro cryptocurrency be used for constructing affordable housing under the Great Housing Mission Venezuela. This Venezuelan initiative plans on building the most affordable homes in Latin America, with 4,740 houses already under construction and another 4,000 houses to be constructed using Petro funding.

This is not the first time that President Maduro has mandated that the Petro be used for official government functions. In October it was declared that worker’s salary bonuses would be paid with Petro, and also Maduro called for workers to invest their savings in Petro. In September 2018 it was mandated that passport fees be paid in Petro.

The likely reason for these mandates is in order to create demand for the Petro, so that it circulates as a currency. The Petro supposedly is backed by oil and a basket of precious metals, but cannot be traded for other cryptocurrencies, and is actually illegal in most of the world since the United States has sanctioned it. It is actually unclear how the Petro exactly works within Venezuela, and there is still no solid proof that it is truly a cryptocurrency.

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State-Backed Groups Start Trading Venezuelan Petro

Trade Petro

A new Bitcoin.com report claims that it has unearthed new evidence to show that maligned cryptocurrency Petro, backed by the current Venezuelan government, has already started trading activities, thanks to several state-sanctioned exchanges and over-the-counter (OTC) groups.

Venezuela sits in the throes of hyperinflation, today at over 1,600,000%, ensuring that its national currency bolivar loses value every hour, making it virtually worthless. President Nicolás Maduro had creater Petro as an oil-backed cryptocurrency and has been slowly trying to decommission the bolivar in favor of Petro. It was for instance used to pay salary bonuses since October 2018.

However, it suffers from many management issues, not least the lack of a working block explorer, a lack of listings on public exchanges, a lack of a free market and even sanctions by the US government. To date, most Venezuelans still have yet to see any usable value for Petro.

Previous reports had shown that government agency Sunacrip in February made a list of exchanges trading Petro and also sanctioned a platform for crypto remittance for Bitcoin, Litecoin and others. It also said it would release a fully functional block explorer at the end of this month.

According to the latest Bitcoin.com story, authorized trading platforms include Cryptoexca.io, Afx.trade, Amberes, Bancarexchange.io, Cryptiaexchange.com and Criptolago.com.ve. After verification, Petro can be exchanged for a rate between USD 30 and USD 40.

In addition, tag sale groups called El Perolero are springing up on Facebook with plenty of sellers that will readily accept Petro. One of the biggest has over 290,000 members with over 9,000 unique ads daily.

 

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Venezuela’s New Crypto Bill Now Law, but for How Long?

Venezuela’s New Crypto Bill Now Law, but for How Long?

Venezuela’s new cryptocurrency legal framework originally introduced by the country’s Constituent National Assembly came into force on 31 January. But will it last?

The question now remains how long will the legislation hold in its current form due to civil unrest, and most importantly a possible change of power; one which could introduce a path to a more liberal attitude toward cryptocurrencies if Juan Guaidó‘s pro-crypto stance is translated into action.

While Maduro hopes Trump’s threat of intervention doesn’t force a change of leadership in Venezuela, current legislation remains in place. The new Constituent Decree on the Integral System of Crypto Assets being one, sets a new set of rules for miners, crypto entrepreneurs, and regular traders.

The bill essentially outlines that all these operators must be licensed and those who operate without approval will be fined. It also defines crypto terms and confirms that national crypto watchdog Sunacrip will now monitor all cryptocurrency activity with a view to controlling “creation, emission, transfer, commercialization and exchange” within the space.

The registration procedures for crypto exchanges, wallets, and mining entities are outlined in the latest document and introduces the concept of several types of licenses, which would be issued according to different types of managed assets. Penalties for violation of regulations could incur prison terms up to three years and fines between USD 3,000 to USD 6,000.

Regarding mining, the new law permits Sunacrip to inspect mining companies and also confiscate equipment. The hardware would then be used for “social purposes”, although it is unclear exactly what this means. The new laws regulating the industry could be short-lived if Maduro begins to lose his hold on power, an outcome being predicted by many countries around the globe who have openly backed a Guaidó-led new government.

 

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Venezuelan Turmoil Sees $10 Million Spurt on LocalBitcoins

Venezuelan Turmoil Sees  Million Spurt on LocalBitcoins

With the country in turmoil and Venezuela‘s future more uncertain than at any point since 1999 when Hugo Chavez first became president, the trade in Bitcoin has peaked, recording USD 10 million in trading on P2P platform LocalBitcoins in just seven days.

In the past week, the country was thrown into turmoil when Juan Guaido proclaimed himself unofficially as the country’s new president. With Nicolas Maduro still incumbent, Bitcoin P2P trades hit their second-highest weekly total ever. The cryptocurrency, albeit driven underground by the Maduro regime, has been supporting many of those nationals choosing to remain in the country rather than fleeing to neighboring Columbia in order to escape poverty.

As the situation becomes more explosive by the day, and with both Iran and Russia warning the US, who have backed the Maduro presidency, to stay out of Venezuela, nationals are again putting their faith in Bitcoin. In the last week, more Bolivars for Bitcoins were traded than ever before, despite the weakness of the national currency.

It can’t be confirmed if perhaps some of this activity may be due to Guaido’s liberal stance on cryptocurrency and the possibility of a new regime, but the rush on Bitcoin, coinciding with a dump of the bolivar, is unprecedented.

Maduro’s attempts to withdraw the country’s gold supplies this week, having already expelled US diplomats, was thwarted by the Bank of England who currently holds Venezuela’s USD 1.2 billion reserves. As Harvard economist explained, having communicated with Guaido:

“The first rule of business as we speak is to stop the Maduro government from liquidating international assets of the country and steal them.”

 

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The Road Ahead for Venezuela: Is There a Place for Cryptocurrency in Rebuilding a Failed Economy?

BitcoinNews began following the situation in Venezuela early last year and had since then tagged it as a potential humanitarian disaster. Where does Venezuela turn as it sits on the cusp of a complete breakdown of its political system and its economy while facing the challenge of a new era of effective government?

Bitcoin, albeit driven underground by the Maduro regime, has been supporting many of those nationals choosing to remain in the country rather than fleeing to neighboring Columbia in order to escape poverty. Many have found solace in Bitcoin and Dash which may have at least to this point delivered what they promised.

However, Petro — the national crypto brainwave of Nicholas Maduro which was introduced in December 2017 as a solution to the country’s ever-deepening national crisis has failed. The Venezuelan crisis was started by the much-adored Hugo Chavez and his extreme social programmes which eventually bankrupted the country before his death from cancer. Backed by tangible assets like gold, oil, and diamonds Maduro tried to convince a nation of a solution which was ill planned. It is no accident that the introduction of the Petro came at a time when Bitcoin prices were soaring.

Many Venezuelans, turned on by the hype of Bitcoin through the media, and then its actual applications – its “real-life” workability when they could lay their hands on it, were equally turned off by the near-invisible and highly impractical Petro. This was made even more ludicrous by the arrival of “Petro Gold”, each one backed by a barrel of oil, which took the application of using cryptocurrency as a fix to an economic disaster into the realms of the theatre of the absurd.

Now, Venezuela’s economy has shrunk in half within five years, and it’s hyperinflated, unsupported by oil output which has fallen by almost two thirds since 1999. To worsen the situation, it has to deal with US sanctions, which very quickly ensured that no Americans could own the Petro or Petro gold. Chavez inherited an oil boom and squandered it. Maduro, faced with the challenge of addressing an economic meltdown, introduced a national cryptocurrency and mismanaged it. This begs the question, can a proven cryptocurrency such as Bitcoin find a place in Venezuela’s economy should Maduro go, given that Venezuelan’s may have a little stomach left for cryptocurrency after the Petro fiasco.

Many Venezuelans may have observed that Bitcoin has at least proven itself as an alternative to the worthless Bolivar and the almost unobtainable US dollar during the turmoil of Maduro’s term as President. Juan Guaidó, the country’s President of the National Assembly-come interim unofficial replacement for the still incumbent Maduro, will give some encouragement to nationals. In August 2014, he announced the launch of Bitcoin exchange Plataforma Sur Bitcoin, the first exchange allowing Venezuelans to buy Bitcoin using Bolivars at a time when they still had value. Guaidó would almost certainly write off the Petro as the failure that it is and look for other options for the much-devalued Bolivar as he has long been the national cryptocurrency’s greatest critic.

If Guaidó is to promote the use of Bitcoin on the streets of Venezuela he has a real challenge ahead in terms of logistics, infrastructure and changing the thinking of a whole nation. Data released by the country’s national telecom providers shows that there are only 11.9 million mobile devices in Venezuela, a country with a population of 30 million people.

Currency controls mean that this number is dropping even further because no one is importing smartphones into the country to sell so that the devices in circulation are often unbranded or not up to date. Some cities are completely disconnected from any communication system, some going without access to calls, SMS, text, 3G or even cable internet with no connection beyond city limits.

Educating Venezuelans about the actual applications of cryptocurrencies in the wake of Petro is another challenge if Bitcoin is to find a place. There have been some inroads into this of late with non-profit blockchain firm Cripto Conserje and US company Horizen (formerly ZenCash) collaborating to create an education program for refugees fleeing the country to neighboring Columbia. Cripto Conserje’s Alpha Project has been set up to increase cryptocurrency adoption in Latin America, especially in the border town of Cucuta, and is hoping to encourage more Venezuelans to turn to crypto, as spokesman for the project commented:

“Together we are providing ZEN paper wallets and education to those in need, ensuring they have secure ways to access and control their money no matter where they are and what situation they are in…We are also onboarding 100 local merchants to begin accepting ZEN as payments.”

With over 2 million refugees crossing into Columbia since the economic crisis began, cryptocurrencies such as Bitcoin and Dash have been Venezuelans only viable and usable method of purchasing daily necessities. The US dollar is hard to come by; although, in November of 2018 a hyperinflation expert Steve Hanke teamed up with a Mexico City-based blockchain powered currency platform in order to get financial aid into the country via an airdrop. Hanke, also a professor of applied economics at Johns Hopkins University, and AirTM, launched “AirdropVenezuela” in order to raise cryptocurrency donations up to USD 1 million.

US-based cryptocurrency exchanges have been offering limited support to beleaguered nationals, but every effort of this kind has significant PR value as it proves to Venezuelans that well-managed cryptocurrencies have the capability of changing the well-being of recipients. Although many might argue that this on its own is not enough, Coinbase donated USD 10,000 in ZCash (ZEC) during Christmas period in 2018 through GiveCrypto.org, a non-profit organization that distributes cryptocurrency to people living in poverty. The funds were donated to the wallets of over 100 families living in the Venezuelan border town of Santa Elana de Uairen, located in Bolívar state near the border with Brazil and Guyana.

All such experiences illustrate clearly that cryptocurrencies, used in an innovative way, can help address Venezuela’s current decimated economy and can in fact change lives for the better, but as yet, Bitcoin and other major digital currencies have only just scratched the surface.

Many now wait to see if a new regime is possible and if it is, and Maduro bends to international pressure and gives way to a self-elected new President. If Guaidó does inherit the great challenge of tackling Venezuela’s massive economic problems it remains to be seen if he also selects the challenge of choosing Bitcoin as one of many available tools to begin rebuilding an economy destroyed by two successive leaders.

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Venezuela’s Guaidó Backs Bitcoin, Not Petro

Guaidó

As Nicolás Maduro fights for survival, still refusing to relinquish power to would-be president Juan Guaidó, Venezuela’s crypto community can at least be hopeful of saying goodbye to the hapless Petro under new leadership.

Guaidó’s self-proclamation as new interim president in Venezuela is recognized by major powers, including the United States and United Kingdom. Those hoping that a place for Bitcoin under a change of government are at least buoyed by the potential of a new leader who has been an outspoken promoter of Bitcoin over the past years.

In August 2014, he announced the launch of Bitcoin exchange Plataforma Sur Bitcoin, the first exchange allowing Venezuelans to buy Bitcoin using bolivars when they actually had value. Guaidó, who has been serving as President of the National Assembly of Venezuela since 5 January 2019, is no Petro enthusiast either.

While Bitcoin has been used to prop up areas of the country’s severely hyperinflated economy over the past few years, the national cryptocurrency, the Petro, was hailed as the legitimate panacea to Venezuela’s financial plight by Nicolas Maduro, but rarely seen.

It is estimated that if Maduro finally takes advice from his critics and hands over the reins to new leadership, Bitcoin transactions could soar under a cryptocurrency-friendly leadership over the next weeks as trading emerges from underground.

Currently, Maduro retains the support of Venezuela’s military forces, while Russia, China, Mexico, and Turkey are supporting the current regime, with Russia claiming that the installation of Guaidó violates international law.

 

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Zen Finds a Place in the Lives of Venezuelan Refugees

Refugees fleeing financially crippled Venezuela are finding some solace after being introduced to cryptocurrency with support from two blockchain companies.

Non-profit blockchain firm Cripto Conserje and US company Horizen (formerly ZenCash) have combined to create an education program for Venezuelan refugees fleeing the country to neighboring Columbia.

Hyperinflation is rampant in Venezuela and as a result, Bitcoin trading volume keeps hitting new records each week. Meanwhile, authorities are scratching their heads on how to rein in the burgeoning, albeit underground industry, including attempts to crackdown on the import of cryptocurrency mining equipment.

Yet again, cryptocurrency has become the go-to method of circumnavigating the all but worthless local currency, the Bolivar, with Zen becoming the latest to appear on the Venezuelan market. With over 2 million refugees crossing into Columbia since the economic crisis began, cryptocurrencies such as Bitcoin and Dash have been Venezuelans only viable and usable method of purchasing daily necessities.

Cripto Conserje’s Alpha Project has been set up to increase cryptocurrency adoption in Latin America, especially in the border town of Cucuta, and is hoping to encourage more Venezuelans to turn to crypto. A company statement has said:

“Together we are providing ZEN paper wallets and education to those in need, ensuring they have secure ways to access and control their money no matter where they are and what situation they are in…We are also onboarding 100 local merchants to begin accepting ZEN as payments.”

The solution to the country’s economic plight was thought to be President Maduro’s launching of the Petro, a national cryptocurrency backed by Venezuela’s oil wealth, but the Petro has been rarely encountered, is untradeable, and consequently rendered completely ineffective to deal with the ongoing crisis.

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Maduro Raises Petro Price by 150%, Revealing Lack of Free Market

Maduro Raises Petro Price by 150%, Revealing Lack of Free Market

The President of Venezuela, Nicolas Maduro, has announced that the price of the Petro (PTR) will be increased from 3,600 Sovereign Bolivars (VES) to VES 9,000. This announcement coincided with a 150% increase in the minimum wage for Venezuelan workers.

This implicitly indicates that there is no free market for the Petro, which is more evidence that the token is not an actual cryptocurrency. Actual cryptocurrencies are traded on exchanges and their price is set by free market dynamics; centralized parties can no longer arbitrarily adjust their price after allowing their tokens to trade on the open market.

The Petro is the official national cryptocurrency of Venezuela and is supposed to be backed by oil. An in-depth study published on Reuters found that the oil backing PTR is, in fact, a speculative reserve located underground near the town of Atapirire. There is no drilling infrastructure in place for this oil and it is unlikely to be brought to the surface for many years. Further, the Venezuelan government has presented no evidence as to how the Petro is actually linked to oil reserves.

The fact that the Venezuelan government can set the price of the Petro is just the latest piece of data among an array of evidence which suggests the token is not a genuine cryptocurrency. The Petro block explorer has no block or transaction data, besides a block counter at the bottom which does not correspond to its 1 block per minute settings. Also, the wallet for the Petro is unavailable at this time, making it impossible for anyone to download and run a node.

Those who have bought PTR received a paper certificate but no actual cryptocurrency. It appears the Petro is just another form of fiat currency easily printable by the Venezuelan government. This is further proven by Maduro’s decree that only Petro purchased in 2018 can be exchanged for fiat or other cryptocurrencies, with a ban on trading for tokens purchased in 2019 and beyond. It would not be possible for Maduro to do this with a fungible cryptocurrency, since each unit of a fungible cryptocurrency is indistinguishable from the rest of the circulating supply. It is only possible to enact a ban like this for non-fungible paper certificates.

That last point ties right back into the subject of this article. If the Petro were a fungible cryptocurrency, then there would be trading pairs for it on cryptocurrency exchanges, and Maduro would not be able to set the price. All evidence indicates that the Petro is not a cryptocurrency and is a non-fungible fiat currency.

 

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Redesigned Petro to Go on Public Sale 5th November 2018

Venezuela’s troubled state crypto, the Petro, won’t allow itself to be forgotten as Venezuelan President Nicolás Maduro announced it is to go on sale to the public on 5 November 2018, a day celebrated by anarchists worldwide.

Maduro also revealed during the announcement that Venezuela has redesigned the Petro and released a new white paper.

The most obvious detail change is Petro’s backing. At first, the token was to be a cryptocurrency backed by Venezuela’s oil reserves, now it is supposedly backed by 50% oil, 20% gold, 20% iron, and 10% diamonds. The government is pre-mining 100 million Petro, 49% of which will go on sale to the public for USD 60 each, and 51% will remain with the treasury. The price is roughly the cost of a Venezuelan barrel of oil, so it is unclear how the gold, iron, and diamonds are factoring into the price. Supposedly, after the sale is complete, the price of the Petro will begin to float with the price of the commodities, as if it’s actually backed by them.

Based on the new white paper, it appears the Venezuelan government is really launching the cryptocurrency this time. Reports in the past have been quite confusing, with the Venezuelan government already saying it was launched and then an investigative report finding out that Petro doesn’t really exist.

The Petro will be a hybrid of Proof-of-Work (PoW) and Proof-of-Stake (PoS) and will have 4 mb block size and 60-second block times. This makes it quite similar to Dash. It will use the X11 algorithm and have masternodes, making it ideal for secure and anonymous transactions, which is what the token needs to be able to circumvent international sanctions.

Additionally, the white paper talks about Petro’s instant send feature, which allows for transactions to be confirmed within five seconds, similar to that from Dash’s code.

The good news from all of this is that the Petro is about to become a real cryptocurrency and it is possible the Petro won’t be printable by the government. The local fiat currency, the Venezuelan bolivar, continues to experience hyperinflation, with roughly 250% inflation since August 2018, according to the Café Con Leche Index.

There is a dire need in Venezuela for a real currency and if the Petro is not printable by the government, it could become quite valuable despite all the controversy surrounding it.

 

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