Yes, late Venezuelan President Hugo Chávez lives on — in the form of rampant inflation, widespread shortages, and now a “socialist” cryptocurrency named after him. One wonders how the creators reconcile his 21st-century socialism with the highly individualistic, deregulated technology bordering on banking anarchy.
Could it be another scamcoin? Fraudulent or fake currencies appear all the time.
So far, nobody who’s anybody in the bitcoin community takes this project seriously. The little information available can be found on Twitter, Facebook, and a website that appears to have been created in a rush.
Its creators describe it as “a digital currency with a socialist ideology and an established north; a new economic model for the free world, decentralized and independent from the traditional banking system.”
To learn how a Chavista cryptocurrency is even possible, I contacted the team behind its inception.
“Like Satoshi Nakamoto,” bitcoin’s alleged creator, they said they’d rather remain anonymous.
“Our identity is what matters the least once the coin is issued and the peer-to-peer network becomes fully operational. The source code will be published so anyone can see it, audit it, and update it, if necessary,” they explained in an email.
Despite their open support of Hugo Chávez, the creators claim to not be interested in involving themselves with politics “in any way,” since they don’t want to “politicize” a currency named after … a politician.
The socialist aspect of the coin lies in its distribution, according to the creators: “It will be distributed freely to any person, no matter their race, religion, or political ideology.” Nevertheless, 60 percent of the coins will be reserved for Venezuelan citizens who register on their website.
“We want to help the Venezuelan people; this project was born precisely out of the existing problem in Venezuela of getting foreign currencies. That is the reason for [creating] this tool, a currency that can be exchanged easily to any other currency, without having to go through so many external entities,” they added.
Why Not Just End Currency Controls?
The creators of the chávez coin have stated that this digital currency will allow Venezuelans to bypass government-imposed currency controls, since it doesn’t require any permit or authorization whatsoever.
The curious thing is that the so-called socialists maintain that “the price of the digital currency is completely independent of a country’s economic or social situation. It is based on the free-market principle of supply and demand: the more people adopt and use it, the higher its price becomes.”
“In no way does the chávez coin aim to replace the bolívar,” they assured. “On the contrary, we’re offering an alternative to get foreign currency and help improve the country’s economy.”
From the technical point of view, this digital currency does not represent any progress or improvement, as it was created with existing source code. It uses a combination of different algorithms already implemented by another one, Dash. Further, its nationality-based distribution method has been previously tested by auroracoin in Iceland.
“To obtain bitcoins, you need a specialized computer system known as a miner, which is very expensive for the common individual. Yet, the distribution of the chávez coin is much fairer and easier,” they explained. “We will distribute it in equal parts to everyone who registers in our site.”
Clearly, the causes of the current crisis in Venezuela are lost on them, as they argue their currency would “avoid dependence on centralized entities that control the worldwide economy.”
As it stands, it remains to be seen why Venezuelans would hand over what little income they have for this snake oil.