Bitcoin has a history fraught with ups and downs. From what started as an experiment by Satoshi Nakamoto in economics. It has blossomed into a worldwide phenomenon. However Like any new technology it has been riding a tumultuous cycle. Initially much of the interest in the coin was as an investment more so than a currency. Since then the block chain has seen adoption in vast number of industries and underlying many trust mechanism, from inventory tracking to data storage and smart contracts. This is actually what makes it so suited to solving many of the current issues in international markets, these are issues that directly impact people’s lives and the global economy. One of the greatest of these but also a disadvantage of the blockchain is that historically it has not been pegged to any commodity. This has allowed its value to fluctuate as the value items on the open market should naturally however there was also heavily affected by the amount of transactions more so than an intrinsic value. It’s instability cannot be blamed on pure laissez-faire capitalism, as demonstrated in many countries such as Venezuela, Iran and even China, which have tightly government controlled currencies. It’s especially interesting that many of the countries which are experiencing these economic downturns are also the exporters of oil and gas. One interesting note by my paranoid schizophrenic security specialist from the darknet is that, they also seem to in many ways share the same ally which is also the world’s largest consumer of oil and gas products. The instances, so he says, these were the equivalent of vassal states who are paid by their ally to carry out propaganda and destabilization operations which ironically,  would increase their profits from oil. But in the long term has actually made Winnie the Pooh’s oil addiction much cheaper to fulfil. While simultaneously increasing their power in trade. Yes much of these Devaluations are caused by US sanctions, but then again. The pooh crew knew that the United States would strike back with sanctions before they launched this strategy, which was the effective manipulation, funded through black and grey markets in which the pooh  state is able to exercise a surprising amount of control. But enough about the ravings of a madman. There seems to be a lot of that going around these days. Maybe it has something to do with adulterated food in the global supply chain, who knows.winni the communist


     Back to the point, much of Venezuela’s money woes are due to direct intervention in the currency in a haphazard way. Venezuela has also chosen a very interesting solution which is the creation of the petrocoin. This is done in an attempt to reign in the rampant inflation of the bolivar. This speaks to a deeper urge to modernize the Venezuelan economy. Many economies face the same challenges of digitizing without becoming beholden to international finance. Many places in the world have been experiencing mass migrations not just Venezuela and Syria. This is resulting in an environment where in both identities and currencies are the walls in what should be a borderless world and in this way the coin gives hope to the less fortunate. Venezuela for example was producing 2.8 million barrels per day of oil in 1999 but only produces 1.3 million barrels now.  So it definitely has capacity to grow and fill market needs but is stymied by the poor advice of its frenimies, which seem to have resulted in almost a decade of economic turmoil. For other countries the commodity could be different, such as avacados, or coffe or even security services. Bitcoin itself is also facing turmoil and a crisis of legitimacy. It seems quite a few countries are dealing with these types of dilemmas. Meanwhile China has not had any issues evading sanctions in these countries.
     This means that Venezuela could become a hub of block chain development if it’s able to convince libertarian socialists who may have experienced their own economic turmoil by getting into the bitcoin arena a little too late for the early and easy profits. This means that there are many people with blockchain skills in the coin and blockchain industry who might also consider moving to a place with a vastly lower cost of living if only they can ensure they are paid in a currency that would be easier to exchange internationally than bolivars. Since Maduro favors the structure of collectives and the coin is all about decentralization, it would be possible for him to create a Venezuelan petrocoin collective to manage the digital aspects of the currency to ensure they could be traded on the coin markets with the likes of potcoin, bitcoin and other coins, preferably those whose value is pegged to a commodity.
     In essence this would create a basket of coins that mimics many of the aspects of international commodities markets and their interaction with international currencies. This would go a long way to legitimizing bitcoin as a viable store of value. Initial development of these aspects could probably be done to outsource technical aspects, however maduro would be wise to require the long-term that these technical workers relocate to Venezuela while ensuring they are housed in safe and secure compounds or develop the talent locally, I heard puerto rico is trying to get rid of a buch of thse people. By utilizing blockchain for internal transactions, or creating a system similar to Chinas mobile payment system, something similar to getgems, which allows the coin to be transferred over a messenger of choice, or some type of electronic ID system like estonia has.

     This would enable redeeming petrocoins for other currencies through coin markets or organizations which purchase commodities such as oil. This brings me to another important facet. There is a possiblity of a measure of regulatory control by the government administering the coin, which is to prevent foreign mining of its coins, possibly by creating IP restrictions for miners. The reason for this is to prevent manipulation by pooh’s minions. This would also require a modification of the coin protocol so as to allow the government to issue coins a.k.a. generate on demand as commodities are produced. This represents quite a technical hurdle however resolving this issue may also resolve some of the scaling issues in the coin which revolve around the amount of computing power required to confirm transactions in long lived block chains, such as technies that utilize smart contracts. This is controversial because it would basically require the creation of government sanctioned and controlled mining nodes which would be specially authorized to generate new coins with reduced computations of mining. These would be a kind of supernodes which are designed to defend against 51% attacks, Or some form of sharding, while simultaneously allowing the value coins to be expanded by the guarantor of the coin’s value which is pegged to the national commodity, possibly through smart contracts.  I think the advantages outweigh the costs and increase the viability of the country specific coins with commodity specific smart contracts. Certainly, it would be possible for Venezuela to undermine the value of its coin if it manipulates in the same way it has with the bolivar, and  generates them without regards to the value of its pegged commodity. However this would be easy to detect due to the transparency afforded by the blockchain which would then impact the willingness of trading in that particular coin. This also means that Venezuela or any country taking this approach, the nation would be able to still create price controls utilizing national currency and pay people in that currency while allowing them to exchange the currency at a favourable rate for their countries coin when purchasing goods internationally. This means there would be 2 exchange rates, the national currency to the national coin, and the national currency to other coins. This is where pegging the digital currency to a commodity really makes a difference. The national currency could be issued in emergencies, such as natural disasters, without destabalizing exports and trade. This two tier exhange rate system would actually create additional stability for international markets as it creates a sort of buffer between the value of a national currency and the trade\exports.
     This means that Maduro would be able to create agreements with the collective that manages the coin to guarantee certain exchange rates between the bolivar and the coin which would be different from the public exchange rates which would make being paid in bolivar’s more palatable to developers or investors. Otherwise they could be paid in petrocoin.. This dual currency system would enable products to be sold on the international markets, to not be tied to a country’s national currency. By creating a two-tier system, the cost of naively produced and consumed commodities can be controlled while still being competitive in international trade, which can be crucial countries experiencing a falling standard of living due to other market disruptions. This also gives rise of the possibility of normalizing the value certain commodities such as across multiple countries, this would further stabilize international markets because the prices of commodities would be more stable, the capacities of various producers would impact the availability of their coin instead of the price of the commodity. This also means the quality\quantity of commodities will more closely tied to the intrinsic value of the commodities instead of cost of living in the country in which it was produced.

     In a way, this allows the creation of a cost controls around internal economics which would serve to protect certain renewable resources which are intrinsic to a country and cost of living such as rents or services, from manipulation by corporate raiders or the whims of capital flows. This could become a new development model for many developing countries which have the need to artificially lower the costs of living while simultaneously exporting goods or services, while limiting exploitation by currency manipulators. I don’t know how much more legitimate the coin can become then being an arbiter of international trade while simultaneously enabling the possibility of price controls for non-commodity items internally which really is any countries sovereign right. This aspect of transparency would enable for investors to have more trust that they will not themselves be exploited and thus increase the attractiveness of foreign investment in that countries businesses for longer term projects. In essence what Maduro has done in his gamble to modernize the Venezuelan economy is to create a prototype of something that the EU has wanted to do but was unable to with the creation of the euro zone and a common currency, it seems that the dreams of a multispeed or multitrack Europe may be realized in Latin American countries first through this creation of a multiple currency per country system, which enables the separation of internal and export development while minimizing the possibility of exploitation. This could allow countries to rebuild trust internationally that has been eroded over many decades.