Donald Trump USA Bans Nicolas Maduro’s Petro Coin

The USA’s President Trump has officially banned the Petro Coin.  This is actually encouraging and not unexpected.  To me it speaks volumes that it can work but is working, otherwise there would be no point in banning it.  Apparently it will also be possible to exchange Petro for the Russian Ruble.  As I suspected I feel strongly that the initial funding largely consisted of China, Russia and Iran and that more support will be ongoing once the coin is launched.

As an investor I am a bit frustrated with this ICO (as I am with most these days) because it took way too long to find information about it and individual investors have been locked out.  They really do risk alienating the audience they were targeting as I am getting frustrated and losing interest fast.  However, the prospects for this first state backed coin remain high and will either boom or bust I predict.  And there will probably be a lot more booming considering what is at stake and the support that Venezuela has.

If the US thought the Petro Coin would be worthless and had no hope of succeeding it’s unlikely they would ban it.  Regardless of what we may personally feel, this is a strategic tactic by the US to stop the first country to try to evade sanctions placed on it.  It will be another precedent if Petro succeeds and other sanctioned countries can freely trade in this similar way or ecosystem created by Venezuela.

Ironically Venezuela is helping to keep the cryptocurrency dream alive which is becoming your own bank and that no one has the right to freeze, take or prevent the spending of your money.

Washington Org Warns Of Petro Coin Threat

Based on an article from Brookings Institute they have a dire warning for all cryptocurrency users!  They first take a shot at the very idea of it helping Venezuela in the first paragraph “the idea that the petro can ameliorate an economic crisis rooted in the bolívar’s volatility seems unbelievable”.  It goes on to say it is a threat to all cryptocurrency “petro will not only fail to cure Venezuela’s economic woes but will also weaken the integrity of cryptocurrencies writ-large”.  And my last but most favorite quote is what I think it’s really about “As Turkey, Iran, Russia, and other sanctioned countries deal with their severe economic impacts, they might pursue the same fraudulent strategy as Venezuela: create a cryptocurrency tied to a government-controlled asset, raise money in violation of sanctions, and proceed to manipulate that cryptocurrency’s value to maximize profit.”

While they do make some valid points governments around the world create their own currency usually without any backing of gold or resources out of thin error and continue to manipulate their currencies all the time.   To call Petro Coin over any other coin or ICO doesn’t seem to be based on anything other than political views. I think the article is highly biased and that Brookings is essentially the mouth piece for Washington and cannot be taken seriously.

The fact that Petro raised over 700M USD is significant and is less likely to be a scam than the other 90% of ICOs out there.  If I want to offer criticism of Petro I am frustrated that they don’t have their own top level domain for it and that they didn’t allow individual investors to get in on the coin.  As an investor when things are difficult and information is not easy to find I get frustrated and lose interest.  I think that is really the biggest risk to the Petro Coin.  I also disagree with larger countries sanctioning smaller countries who do not do their bidding since it just ends up creating poverty and suffering for the average person.

I am long Petro Coin if they can get more organized and get out better information.  Petro Coin stands to succeed if not for the reason that there are powerful backers of it.  Historically this been enough for the weakest of states, currencies and assets to continue floating on.  It’s also the same principle of what makes Bitcoin work, people have invested into it in different ways and it continues to be used although I do agree all cryptocurrencies essentially need an overhaul and they are certainly lacking in ease, functionality and security but his will be resolved in time.

 

Petro Coin Is Venezuela’s Nicolas Maduro’s Sanction Hot Cryptocurrency Backed by Gold, Oil and Diamonds

The Petro Coin is a very exciting project announced by Venezuelan President, Nicolas Maduro.  What makes this project interesting is a bunch of firsts, this coin would be the first staterun cryptocurrency and is also backed by physical assets, namely 5 Billion Barrels of Crude Oil, Gold and Diamonds.  This is a solid coin and currency in its own respect.

Back in the days when fiat currency was significant, valuable and important, there was the “gold standard” where essentially the amount of currency in circulation and value was a direct reflection of how much gold it was backed by.  If executed as promised, the Petro Coin would achieve exactly this as a first in the crypto world.

Why do I think this coin will succeed if executed and implemented as marketed and planned?

Russia, China and Iran.  2/3 (Russia and Iran) are currently sanctioned and China has been threatened with sanctions.  Since the Petro Coin was founded as a way to restore wealth, prosperity and escape the sanctions guess who, as an ally of Venezuela and also parties with a vested interest would both profit directly and indirectly from the Petro Coin’s success?  I anticipate massive amounts of money would pour in from Russia, China and Iran even if it is discreet and indirect.  If I am right I would expect that this coin could be hugely successful and a top coin.
On top of this President Maduro has recently asked allies in the region to get on board with the Petro project.

What are some downside risks?

Judging from social media some are very averse for various political reasons to this coin.  Another risk would be that this coin would almost certainly have trouble, be outright prevented, or removed from any Western based exchange.  Being listed on major exchanges is a key success because if no one can buy or trade your coin then it’s not going anywhere fast.  However, there are enough overseas exchanges to take care of this issue, and I suspect Venezuela would have enough resources to create their own exchanges to solve this issue. *Update Petro Coin’s ecosystem will apparently allow you to exchange and trade in physical assets, cash and other coins so the problem appears to be solved from the outset.  However, the boycott and difficulty in trading this coin are potential risks, especially if as I anticipate, some governments would simply just make it a crime for their citizens to hold or trade in this coin.  It would be interesting to see where this all heads.

It’s also been reported that Venezuela’s Congress (the opposition) has declared this currency and coin completely illegal.  However, it also appears that this has no legal bearing and will not prevent the project from moving ahead.

Should I invest in this coin?

I can’t answer that because only hindsight can clearly show us.  I am planning to invest in it as long as the project is executed as marketed and planned.  Politics aside I think this could be a win-win for people inside and outside of Venezuela.  If this coin helps Venezuela escape sanctions this would almost certainly lead to an improvement for the people of Venezuela since sanctions mainly end up hurting the people (especially the poor).

Early Success

Apparently Petro has raised nearly 3/4 of a billion USD in their initial private sale.  I’m again calling this as a positive sign and I highly suspect numerous state Sponsors from around the world contributed the funds even if indirectly.

In that sense Petro could be an incredibly strong and long-lasting cryptocurrency.  The funding behind it is already proof of concept.

On top of that Venezuela seems very serious about making their country a haven for all things crypto.  This coin could stabilize their economy and also make them the new “Singapore” of the cryptoworld if they continue to play this right.  Despite some negative comments and feedback, this point cannot be denied or overlooked in terms of investment.

My feedback

It’s been very difficult to find details about this coin, I’ve read various news articles and only recently found the official website.  They really need to do more marketing and make a proper URL/domain for this coin and not just a government subdomain.  I am certain fraud with this coin has already gone on with so many fake Petro sites that I’ve found which seem to be collecting coins.  They should pay particular attention to this as I imagine a lot of people will be calling Petro a scam because of these fake sites.

It also hasn’t been made clear of their plan but from my reading of the official site it appears initially Petro will be sold as an Ethereum token that will then be converted to their own blockchain and wallet once they have completed it.

Another risk is that people like me may begin to lose interest or even forget about it because I was hoping to get in on the private sale.

With that said, I’m not investing in any ICOs for the most part but Petro is one I am interested in for many reasons stated earlier in this post.

Where to find the official website

It took a lot of digging but here is the official Petro Coin website: http://elpetro.gob.ve/index-en.html