The Petro has every opportunity to put the digital currency market at its feet. The rules with which the Venezuelan digital asset is programmed must respect the best standards of the cryptocurrency community to generate confidence and security.
Venezuela's announcement about the creation of a digital currency placed the country at the forefront of technology and global finance. Petro aroused strong enthusiasm in the cryptocurrency investor community and generated huge expectations about how the international financial system will evolve. From Celag we spoke with David Jaramillo, engineer in computer science and entrepreneur blockchain, to understand key elements of the new cryptocurrency. The expert said that Venezuela was smart and understood one of the main needs in the world of digital assets: offering a guarantee in natural resources. This implies that the price of Petro will not be linked to the whims and speculation of the market, but will be associated with the value of real assets such as gold, gas, diamond and oil. He mentioned that there are important perspectives for obtaining unconventional sources of financing, avoiding the blockages and sanctions of countries such as the United States and being able to counteract the tensions of inflation and corporate shortages
- What advantages does Petro have with respect to other cryptocurrencies (digital assets)?
The cryptocurrencies take advantage of the best of internet and mathematics to allow money transactions between countries and people without anyone being able to intervene or manipulate them. Petro retains this key element of digital currencies, but adds other features that enhance it. Its value will not be defined by market speculation, which often causes large fluctuations both upwards and downwards. The price of Petro will be related to the international price of gold, gas, oil and diamonds. This is what has been asking for a long time in the digital currency investor community. There is a history of a company that issued a digital currency backed by gold. This is the case of Digix. But the Petro is a project of much greater proportions. This is the first time that a country decides to issue a digital asset backed by real-world resources. The expectation is very high because having a state behind, there will be large amounts of raw materials guaranteeing the issuance of the currency, which implies that the scale and volume of transactions that the market can take is unlimited
- If the Petro will have the value of the raw materials, why not buy them directly?
The investor who wants to have part of his capital tied to the price of oil, gold, diamonds and gas, could buy these resources directly and store them. But the physical transfer from Venezuela to anywhere in the world of oil barrels or diamond ingots is expensive. The investor has the option to buy a derivative in international exchanges that represents the value of the raw material he wants to acquire. But in that case there are high intermediation costs. The wonderful thing about the world of cryptocurrency is that the cost of transfer and commission tends to be zero. It is a way to democratize financial movements, regardless of the countries or the social strata of the investor. This is possible because of the blockchain technology used by digital assets, in which the decentralization of information allows a market without intermediation or
Venezuela will get more financing in the world?
The Petro has every opportunity to put the digital currency market at its feet. The rules with which the Venezuelan digital asset is programmed must respect the best standards of the cryptocurrency community to generate confidence and security. An efficient and skillful development ensures a huge flow of investments for the country, from many parts of the world. Investors in the universe of cryptocurrencies have been asking for a long time to buy a part of their assets
that is tied to the real world, that is, to the price of raw materials, and be able to diversify part of their risk. Petro responds perfectly to that slogan because it allows this increasingly larger community of cryptocurrencies to acquire raw materials (real assets) without leaving the digital world. Specialists from all over see the proposal with strong enthusiasm. One of the first to make it clear was Max Keizer, an expert in finance and technology at Russia Today. On the same day of the announcement, he said that Venezuela took an enormous step to have a revolutionary financing mechanism, in which no State could prevent or impose sanctions to
Does Petro help to break the blockade and the sanctions of the United States?
The Petro, like the rest of the digital assets, will operate based on blockchain technology. It is an innovation that uses mathematical functions such as hash, the ability to make computer accounts and the global internet connection to automate money transactions without the need for an intermediary to certify whether the movement was made or not. The best way to think about it is that the blockchain allows you to have an intelligent money, which does not need humans to make sure that the movement from one account to the other was successful. In the world of cryptocurrencies, there is no need for a transaction processor like the Swift, nor are there possibilities for powerful countries to change the rules of the game, manipulate financial movements or impose sanctions on other countries or individuals. The blockchain technology is in charge of leaving the rules clear for everyone and the one who wants to participate has to adapt to this idea of decentralization, in which nobody has the possibility of putting the board in their favor or of causing harm to others. The Petro, therefore, will allow Venezuelans to carry out financial operations with other countries and even among the inhabitants themselves, without having the controls or warnings of the United States, which can not impose its rules. To cancel the blockchain the United States should disconnect internet in the world, an impossible. To the extent that this technology is massified in Venezuela will also open a range of possibilities. From the issuance of debt contracts in Petro to the use of the blockchain and digital assets to face inflation and shortage maneuvers. You can have, for example, a cryptocurrency that only serves for the purchase of food. The future arrived and Venezuela has all the conditions to take advantage of technology to face economic tensions
