By Gaurav S. Iyer, IFC Published : February 23, 2018
Ethereum News Update
Venezuela’s attempt to create a state-backed cryptocurrency is one of the weirdest experiments in blockchain, but apparently, Turkey finds it alluring.
I think it makes Ethereum look more feasible.
Of course, it’s not exactly clear what Venezuela accomplished with its national token. Details are few and far between. All we really know is the cryptocurrency raised $735.0 million in its initial offering. And even that is suspect.
Ethereum Price Chart
According to some government officials, Venezuela issued the “petro” token as a means of skirting international sanctions. (Source: “Maduro Sets Venezuela’s Debut Cryptocurrency Sale for February,” Bloomberg, January 30, 2018.)
This puts the Venezuelan crypto in stark contrast to Bitcoin and Ethereum, both of which are aimed at decentralizing financial power. Bitcoin, in particular, came out of the experience of the 2008 financial crisis.
Having lost faith in the global financial system, Satoshi Nakamoto (whoever he/she is) designed a network that would splinter the authority of existing power brokers. The idea of a state-backed cryptocurrency runs counter to that very idea.
Nonetheless, new reports suggest that senior Turkish officials are looking to establish a “Turkcoin.” (Yes, that’s what they want to call it.) And as with the Venezuelan example, details are scarce on the ground. (Source: “Turkey mulls ‘national’ bitcoin,” Al-Monitor, February 22, 2018.)
Some analysts find this trend disturbing. Insofar as the welfare of Turkish and Venezuelan citizens is concerned, I agree that state-backed cryptos are probably a bad idea. However, there’s a reasonable chance that the petro and the Turkcoin are good for Ethereum.
Think about it. Officials in the U.S. and Europe are still skeptical about decentralized currencies. But if they see authoritarian regimes co-opting blockchain technology, they might decide it’s better to play with the lesser of two evils.
We can already hear alarm bells ringing in Washington D.C.
The Foundation for the Defense of Democracy (a Washington D.C. think tank) launched a research project to investigate the petro’s anti-democratic uses and pro-corruption uses. A few streets away, the Center for a New American Security is doing roughly the same thing.
These ivory tower discussions might seem like a distant world from the one you see on CoinMarketCap, but believe me, one impacts the other. Think tank papers are used to support political stances in Congress, changes to regulation, and even presidential decisions.
What’s my point?
Simply that Venezuela and Turkey might end up clearing red tape for ETH prices. They represent a much more dire threat to global finance.
Over the last 24 hours, ETH prices moved up 8.6% against the U.S. dollar.
This brought the Ethereum to USD rate to $882.20, which is still a long way from our Ethereum price forecast of $1,500 by the end of Q2. However, I still believe that target is within reach.