I’ve been bashing the Petro a lot lately, including in my very last blog post just a few days ago. I am still not a fan, not even a little bit. But, I have started to realize a few good things that may come from the Petro launch. Before I take that turn towards the positive, let me be clear about why the Petro is crypto-garbage:
- It is not really backed by oil
- Even if it was backed by oil, there is no reason to trust the Venezuelan government to honor it
- The white paper shows that the Venezuelan government can set the value of the Petro to whatever they want
- The Petro has no blockchain yet, and only the most basic technical details have been announced
- The Venezuelan government made a last-minute and suspicious switch of blockchains
So, what good could I possibly see in this mess of a digital asset? Here are four things:
(1) The Petro is bringing new international attention to the situation in Venezuela.
Part of that attention is coming from the cryptocurrency and blockchain community, much of which is interested in developing real solutions for countries like Venezuela that have failed currencies. That audience will see right through the Petro-crap and will hopefully be inspired to provide legitimate ideas for Venezuela and other countries that live under oppressive and incompetent governments.
Also, since the Petro will (at least initially) be on the NEM blockchain, it will allow for an unprecedented level of transparency into the actions of the Venezuelan government. It may be that by making this move the Maduro regime will reveal more than they intended. (Note that as of this writing, the actual asset on the NEM blockchain has not yet been officially identified, although there is a “mosaic” that seems to fit the description.)
(2) It has helped to educate crypto newcomers.
The Petro has led to a lot of discussion that should help educate some of the masses who entered the cryptocurrency space recently. Key points include:
- The simple fact that just because something is on a blockchain doesn’t make it good. There are plenty of bad ideas in the space, and also plenty of outright scams.
- There is a difference between “native” cryptocurrencies like Ether, XEM, and Bitcoin versus “tokens” that are issued via smart contracts on blockchains like Ethereum or NEM. (The current Petro is a token on the NEM blockchain with a promise to transition to a native currency on its own blockchain in the future.)
- Putting something on a blockchain doesn’t mean it is decentralized. Any person, entity or authority can use smart contracts to issue and distribute digital assets with centralized control.
- The censorship-resistant nature of decentralized blockchains like Ethereum and NEM applies to anyone who wishes to use them. In other words, we must accept that they may be used by people we don’t like and those people may do things we don’t approve of. What makes the technology revolutionary also makes it potentially dangerous.
(3) Everyone has a chance to experience Madurismo if they want.
The Petro does have some highly vocal supporters. Most of those supporters fall into one of a few buckets:
- Venezuelan government cronies (hint, their pro-Petro arguments tend to focus on history and political rhetoric rather than technical facts)
- “Armchair socialists” from around the world who see the Maduro regime as a force that is fighting a class or economic war with the US / Europe / wherever
- Speculators who may see the pushback on the Petro as a “bad PR” opportunity.
The Petro will eventually give all those groups a valuable lesson about the real nature of the Venezuelan regime. It may be that the Petro (if and when it is actually distributed) will spike in price much like almost every ICO did in 2017. But, once the promises start falling apart it will collapse quickly. (Petroconnect?!?) Hopefully learning that lesson the hard way will help to change some minds. Welcome to the Petrolivar.
As part of my Petro-bashing, I got the idea that we should have an Arepacoin instead of the Petro. (An arepa is the centerpiece of Venezuelan cuisine – if you haven’t tried one, go now!) I had been reading up on ERC20 tokens, and that joke inspired me to give one a try. So, I created an “Arepacoin” on the Ethereum blockchain. It’s symbol is “ARPA” and you can see the contract here.
I used tokenfactory.surge.sh to make the contract using Metamask and Chrome. Now that I’ve taken that first step, I plan to learn about designing, coding and deploying more complex tokens. It was a great learning experience and has made for some fun jokes and jabs at the Petro. It also helped me make some new connections online, and together we want to use Arepacoin as a sort of “protest token” to help raise awareness for the situation in Venezuela.
Note: Since I created my Arepacoin ERC20 token I’ve become aware that there is an existing Arepacoin project with it’s own blockchain. It is not clear to me the status of that project or where that Arepacoin might be traded, but it is completely separate from my Arepacoin ERC20 token (ARPA).