A laughable crypto that is doomed to go down to the toilet

 You may recall that I told you that bitcoin has become a life saving vehicle in Venezuela when its economy has collapsed and its fiat money is evenworse than the toilet paper. Now their President Nicolas Maduro has got a wild idea to cope with the disaster of its economy under his watch by  announcing  two weeks ago the launch of their blockchain cryptocurrency called “petro” which is backed by oil reserves. I must applaud for Maduro for his “vision” and nerve to get into the crypto world when most of the other governments are scared to death and don’t know what to do for the fast invasion of this burgeoning new technology into our life.  But I must say this Venezuelan government “Petro” crypto is doomed to go into the toilet very soon.  On a small scale, who dare to trust this socialist president and government that has turned the once among richest countries in Latin America into one of the poorest by “robbing from the rich to give to the poor”? There is no such thing as free lunch by simply redistributing wealth without personal responsibility and efforts and expecting the whole society will survive long with prosperity. Petro will just be another toy for Maduro to play with, hoping to continue and prolong his extreme idealism.  It will fail miserably as well with certainty before long!!

On a big scale, what’s the fundamental difference between a cryptocurrency represented by bitcoin vs the fiat money? It is not physical paper money vs digital money or even the technology behind the currency. The fundamental difference is the trust on the centralized fiat currency that can be manipulated by government and can be created out of thin air and debased without controlled vs decentralized currency that cannot be manipulated and created willingly just by someone. Just think about how much purchasing power your money (any fiat money you may hold) can maintain over time. US dollar, the world reserved currency has lost 99% of its purchasing power in the past century but no other currency is better off in reality. It has become a worldwide epidemic that every government in the world is freely printing their own money without any control. It is just a matter of time that the fiat money experiment will bring unprecedented financial disaster eventually if we simply let it continue as it is. The blockchain (BC) based bitcoin or something in the same nature is the first hope we are seeing now that may save the world in this sense! But don’t get it wrong that anything based on BC is created equally. Actually we have started to hear a few governments like Singapore, Canada and Sweden that are thinking to create their government-backed BC-based cryptocurrency. The question is what’s the difference between the current fiat paper money vs such crypto in terms of centralization and expansion control? Not a bit! The government can create and expand their fiat crypto reserve at their wish at any time without any control, just like what they are doing for the fiat paper money. The purchasing power of such fiat crypto will go down to the toilet in the same fashion for sure. So don’t get excited and believe that the government issued fiat crypto will be safer and more valuable. They will be inflated to nothing eventually as well! It is just a matter of time!!