The First National Cryptocurrency is Here. But is it Working? 0 5502

A few months ago, Venezuela became the first nation to adopt a crypto as their primary currency.

Announced in December 2017 and launched in February, the Petro became official legal tender on April 9th. Unlike many tokens, the Petro is reportedly backed by natural resources. And it’s not gold. Each token sells for the price of a barrel of oil (about $74). President Nicolás Maduro claims to have raised $735 million in the initial sales of pre-mined coins, but has offered no supporting evidence.

The maneuver could pave the way for other countries to officially adopt cryptocurrencies. But the unstable situation in Venezuela makes the Petro’s future far from certain, even by crypto standards.

Petro’s Problems

The Petro, which ICO bench rates at a dismal 1.4 out of 5 stars, is “an instrument for the Bolivarian Republic of Venezuela’s economic stability and financial independence.”

Though allegedly backed by the country’s estimated 5 billion barrels of oil, the Petro’s legitimacy on global markets is shakey. President Trump reinforced US sanctions with Venezuela by signing an executive order to ban all US citizens from dealing in Petros. US officials were quick to call the cryptocurrency a scam, and some major media publications have stepped up to circulate that party line.

Vote for Petro

The Petro also faces resistance within Venezuela, notably from the opposition-lead National Assembly, part of the government’s legislative branch. The Assembly declared the ICO illegal and unconstitutional, saying Maduro did not receive their approval to launch it, a step made necessary by Venezuela’s own laws. They went even further, warning potential investors of threat. National Assembly deputy Marialbert Barrios publicly decried Petro promoters as “smoke peddlers,” while fellow deputy Jorge Millán stated “this is not a cryptocurrency, this is a forward sale of Venezuelan oil. It is tailor-made for corruption.”

So who voted this in? President Maduro, who some say fraudulently re-elected himself in May for another 6 year term, pushed the program through himself. He hasn’t pretended the Petro isn’t a way to circumvent international sanctions, calling it a crypto that can take on “Superman” (e.g. the US). But critics aren’t buying it. Some assert that in addition to not really being a cryptocurrency, Petro isn’t even backed by oil.

Can Petro Feed Venezuela?

The ICO is ostensibly a last ditch effort by the Maduro regime to salvage Venezuela’s destitute economy, which has been teetering toward total collapse over the past few years. Inflation went up 4,068 percent in 2017. Some hungry Venezuelans are crafting handbags out of the worthless banknotes they can no longer use to buy food and medicine, trying to literally weave some value out of their paper money.

The people of Venezuela continue to protest, flee the country, or struggle to survive ordinary life. Jonathan Wheeler, a former Goldman Sachs employee and Bitcoin enthusiast, has taken it upon himself to “teach Venezuelans ‘how to fish’” by sending them a Bitcoin infusion.

Clearly, a solution needs to arrive yesterday. Petro may or may not be it.

The World’s Eyes on National Cryptocurrencies

If the Petro doesn’t work, does that mean national cryptos generally won’t work? Not exactly.

Japan already accepts Bitcoin as legal currency, and many stores accept it as payment. Russia, China and Israel are all exploring the potential of a national crypto.

Tunisia was early to the table. Though not a cryptocurrency, it launched a digital form of its national currency in 2015. Sweden is developing the e-Krona for release next year.

The Petro will be a coin to watch not because it’s a good investment, but because of the larger implications it could have on the international stage. When other nations are putting the blockchain to work, we’ll get a clearer picture of the intersection between global governance and decentralized currency. But for now, we have Venezuela as the world’s first example.

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A tribal member of the Choctaw Nation, Brian grew up in the Silicon valley under the technological mentorship of Steve Wozniak. He's lived, worked and traveled all over the world, and now writes from the Pacific Northwest.

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The Block Talk Awards 0 104

The first inaugural Block Talk Award nominations are open now. The 2018 Awards will recognize the influencers that are pushing the industry forward through innovation and analysis. Nominations will be accepted from August 13, 2018 to September 1, 2018 at 10pm PT. To qualify, influencers should have at least a cumulative following of 10,000 across social media platforms, or similar readership across relevant blogs and web properties.

Winners in each category will receive a $1500 media credit on The Block Talk, access to a network of TBT Award honorees, and VIP access to TBT events in 2019.

Nominate yourself or your favorite influencers in the following categories:

  • Best ICO Analysis & Commentary
  • Most Engaged Community
  • Favorite Blockchain Blogger
  • Best Crypto Journalist
  • Innovative Female Founder
  • Best Podcast Host(s)
  • Favorite Blockchain Event Host
  • Top Crypto Speaker
  • Most Innovative Blockchain CEO
  • Top Social Entrepreneur

Submit Your Nomination

VEZT Wants You to be Able to Own Shares of Your Favorite Songs 0 66

Mr. Cheeks has been producing music since the early 90s, under the mentorship of his late uncle, the legendary Gil Scott-Heron. He started with the Lost Boyz, won a Grammy for his work with Stephen Marley, and has released a handful of solo albums since.

Now, royalties for his singles will be available to his fans, thanks to the blockchain. Mr. Cheeks’ songs will be available on a platform that allows fans and investors to claim a slice of the rights to pop music they believe in. When the song is licensed for use, in advertising or film for example, you, the investor, get a cut.

It’s made possible through an app called VEZT, which is positioning itself to revolutionize the way music relates to money as the world’s “first music rights marketplace.” VEZT partnered with a long time Mr. Cheeks producer, Bink, to offer shares of the song “Lights, Camera, Action” which is currently available on the company’s website.

The Problem of Selling Music

Mixing music and markets is an old problem. How should musicians get paid? Who pays them? What about their support teams? How do we keep track of the flow of money and make sure everyone’s fairly compensated? Among the music world’s financial obstacles, one of the biggest issues is navigating licensing and royalties.

In Austin, for example, one of America’s most proficient music hubs, almost a third of musicians make less than minimum wage, and 70 percent are earning less than $10k per year on their work. That’s below the poverty line even for a household of one. It’s been like pulling teeth trying to get royalties from companies like Spotify, who generate income off their songs. Meanwhile even more expensive lawsuits pile up, or go completely unpursued from lack of funds, as marketers continue to ape good music with copyright infringing fakes. It’s a constant headache for musicians, producers and labels, and it makes it prohibitive to eke out a living in the music world.

Under VEZT’s model, royalties are simple. Music is intellectual property owned by the artist. The artist can sell a portion of those rights to fans, who become investors when they purchase a percentage of shares. Fans and musicians make an agreement to co-own the songs they both care so much about. If you love a song and want to see it do well, you invest. If it does well, you have a share in the artist’s success. Royalties are split based on percentage of ownership.

The concept comes from cofounders Robert Menendez, a former Wall St. financial trader/analyst, and Steve Stewart, an industry regular with entrepreneurial tendencies, whose accomplishments include ushering Stone Temple Pilots to fame in the early ‘90s and managing the band for a decade. They say they founded VEZT as part of a vision to “detangle a lot of the financial problems in the music industry, and connect fans more directly with the music they love.”

And now, they’ve expanded across the Pacific from VEZT’s headquarters in Los Angeles, and opened an office in South Korea.

‘The Perfect Environment’

“The fans of music in Korea are quite possibly the most enthusiastic and active fans on the planet,” says Stewart. “Combine this with a robust tech community and a government leading the way in adopting blockchain technologies and you have a perfect environment for VEZT.”

The ROK’s new legislation legitimizing crypto exchange, Dapps, and blockchain systems will take the peninsula farther into a brave new technological world, where many others have so far feared to tread. Combined with their now-world-famous maximalist pop industry, and it’s not hard to see why VEZT moved in.

Construction recently finished on their new 2500 square foot office in the Gangnam district of Seoul. VEZT has enlisted a host of professionals to their C-Suite, including veterans of major Korean record labels, Kpop producers, marketing and PR executives and, of course, tech experts.

Fixing Music With Blockchain

If their model works in Seoul and LA, VEZT could bring a more harmonious rhythm to an industry still trying to find its groove in the digital age. The world needs music, and musicians need to get paid. As with anything blockchain, cutting out some of the middlemen could be the Occam’s razor with the solution. When fans are directly invested in their music, everyone will want to see it succeed.

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