In the early morning of February 20, 2018, specifically at 00:00 am, the Vice President of the Bolivarian Republic of Venezuela, Tarek El Aissami, announced the official launch of the first stage of Petro’s implementation, a currency legally backed by Petroleum.
This stage consists of the private pre-sale of 38,400,000 Tokens at a reference value of USD 60 (the value of oil on the international market). This would, in theory, give the country a monetary inflow of 2,304,000,000 USD.
In this context, opinions have not taken long to appear from those who rely on the currency, those who support the convenience of tokenizing an oil futures contract and those who expect the currency to fail because they distrust the Socialist-oriented Government (with one of the biggest corruption perceptions index according to international studies).
The United States had previously frozen the country’s ability to conduct monetary transactions through U. S. banks, which was one of the causes that motivated Venezuela to seek decentralization as a way out of the power of the United States and other centralizing agencies to directly or indirectly determine the country’s policies.
The existence of Petro (if successful) could represent a bypass to U. S. sanctions on Venezuelan politics, which could mean a precedent for other countries to follow, leaving Third Parties without the possibility of diplomatic and/or economic interference and practically reducing their pressure on the military and commercial sphere.
To avoid this, the United States had already issued a series of declarations warning investors that if they were to buy such tokens against the will of the United States, they would have to do so at their own risk, facing the possible consequences of conflicting with their official interests.
However, the Venezuelan government had mentioned that given the condition of anonymity and convenience involved in the use of a cryptocurrency, it could attract investors from European countries, as well as Turkey, Qatar and even the United States itself.
In the midst of this atmosphere of contradictory declarations, this morning, after the announcement, the official Petro website was updated, with a banner announcing its pre-sale. Links were also published so that interested investors could register, as well as a series of documents that would allow them to learn more about this Process: A buyer’s manual, and an Anti-Money Laundry Compliance manual (both documents, for now, available in Spanish).
Although this announcement has captured the interest (positive or negative) of a large number of users of cryptocurrencies, as well as Venezuelans in general, for those with a little more experience, it turned out to be at least a little surprising two new features that were announced:
(1) NEM as the best option for Smart-Contracts
The discussion of ETH vs NEM has been common in forums and social networks. Each technology has its supporters, however, while Petro’s WhitePaper mentioned that presales would be issued through Tokens ERC20 on an Ethereum Network, the Buyer’s Manual stated that they would use the technology provided by NEM. This seems to be a move in the right direction since many people believe one of the advantages of NEM over Ethereum is that it makes the development of Smart-Contracts easier and safer.
This announcement could also explain the mysterious interest of NEM developers to make themselves known in Venezuela when a few days ago they announced their first Meetup in the country.
A comparison between NEM and ETH can be viewed here:
(2) Open registration to invest
Although according to the WhitePaper, the first stage would consist of a private pre-sale of tokens, which would later burn to become Petros at the time of the public ICO, many Venezuelans were amazed to see the possibility of opening a registry to acquire Petros. It is not yet known if they will be able to acquire the tokens in the presale or it will be a registration to be able to buy Petros at the time of the ICO.
According to the Buyer’s Manual, the process is very straightforward: simply register so that the system sends an email with the download link for a wallet. After installing the wallet, click on Sign Up, then click Simple Wallet, then Click on Ready, then Next, Then put a name on the Wallet, Click Understood, Download the personalized wallet, click on Show Private Key, copy it and keep it on a safe place (because once finished, the key will self-destruct). Click on “I have my Private Key and Password”, Agree, Sing in onto your wallet and then go into your account information in order to see the wallet address.
Once this process is finished, it will not need to be done again (unless you want to create a new wallet)
According to WP, the issuing will be this way:
At the beginning of the Pre-sale process, the entire existence will be in the digital wallets of the Republic.
When the presale starts, at 08:30 a. m. (time of Venezuela, -04:00 UTC), there will be placed for sale the whole thirty-eight million four hundred thousand (38,400,000) tokens. During the process, degressive discounts will be applied to stimulate early investment.
Prior to the ICO, the 100 million (100,000,000) Petros will be pre-mined in the Petro blockchain (being Petro a PoS crypto).
This Initial Offer, whose closing depends on the total sale of the Petros created, guarantees the Venezuelan State the total fundraising corresponding to the selling of all available Petros Tokenized (82,400,000 PTR).
During the ICO, four levels of degressive discount will be applied for every five million (5,000,000) of Petro until completing and, finally, a fifth block of twenty-four million (24,000,000) of Petro to complete the total destined for the Initial Offer process, that is, forty-four million (44,000,000) of Petro. The sooner someone buys Petros, the less they will cost and the bigger profit they could imply.
At around 8 o’clock the same night, Mr Maduro, accompanied by an important group of national authorities and international private investors and businessperson, held a press conference in which he made the following announcements:
In just 20 hours since the time of the Pre-sale start-up, Petro was able to collect the following figures from international investors (the same amount in equivalent currencies):
CNY: 4.777 billion
EUR: 596 million
USD: 735 million
This success is in sharp contrast to the pessimistic view of some analysts, especially those who were sympathetic to the policies of Donald Trump, who bet on the failure of this initiative.
Signing of two agreements to promote crypto money’s security and its global adoption
Nicolás Maduro announced an agreement with the NEM platform for the technological development of Petro. The administration of the platform will also be done by the Russian company Zeus Exchange (https://zeus.exchange/).
He also announced an agreement with The Social Us (www.thesocialus.com) a company run by young Venezuelans entrepreneurs to coordinate with exchanges the process of trading and adoption of Petros, both physically and virtually.
Venezuela formalizes and promotes the use of cryptocurrencies as legally countrywide accepted payment mechanisms
With a vision to boost the use of Petro as well as that of cryptocurrencies in general, President Nicolas Maduro made other important announcements
Announced the creation of a School for Crypto Miners and Blockchain development
He ordered the creation of a Cryptoactive Treasury Department and appointed Abraham Davis Landaeta Parra (bachelor’s degree in statistical studies, with studies in Beijing and Madrid) as its highest authority.
Also, the opening of a set of currency exchanges was ordered throughout the national territory, with physical and virtual presence.
He also ordered PDVSA (the main oil producer in the country and Latin America) PEQUIVEN (the main national producer of petroleum derivatives) and CVG (a holding of iron, steel, aluminum and derivatives producers) to make a percentage of its purchases and sales in Petros and other cryptos.
He received the proposal from the National Association of Airlines for accepting payments in Petros and other cryptos for fuel and associated services to airlines in Venezuela. The proposal was formally approved. Subsequently, the respective Official Decree will be issued.
He authorized the acceptance of cryptocurrencies and Petros as means of the payment for tourism services, hotels, inns, tours, etc.
Also, he announced that he received a proposal from the more than 1400 savings banks of the country, requesting to integrate PETRO and other cryptos as means of payment and value storage to benefit more than 6 million workers. This request was approved, as well as the proposal to use Petros to finance the construction of digital mining farms in order to increase worker benefits.
Venezuela also authorizes the acceptance of Petros and other cryptocurrencies as valid means of payment for consular services.
Also, he authorized the acceptance of Petros and other cryptos in Venezuelan gas stations bordering Colombia.
He also announced that crypto mining farms would be installed in the various universities of the country.
Likewise, also was announced that mining rigs will be produced through the company VIT
Finally, he concluded by announcing that after studying the successful behavior of Petroleum in its first 24 hours, Venezuela could study the issuance of a cryptocurrency based on tokenization of its gold reserves (pretty much as an official Venezuelan “DIGIX”). The concept of Petro-Gold remained on the table as a very interesting topic to discuss later.