Shitcoins on behalf of the state – or a new era in the history of national currencies?
Marshall Islands. Image of Keith Polya via Flickr.com. License: Creative Commons
With the sovereign (SOV), the Marshall Islands are the first land in the world to plan a cryptocurrency as an official currency. This follows the Venezuela micronation, which publishes an oil -covered currency with the Pedro. Turkey and Iran are also said to be in the starting blocks. Will the ICO become the new instrument with which states fill its cash registers? And does that mean that the cryptorevolution has now arrived at the level of the nation states?
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The biggest problems of an ICO are usually not in technology, but in marketing: How do you manage to build so much trust that people give real cryptocurrencies for tokens that are virtually unable to get out of the air, and that in almost all cases, with at best windy and vague promises on return? Why should someone invest real crypto money in it?
The problem is likely to be known to anyone who has already dealt with state generation of money. Here, too, money is created from air, and the market is required to trust the state to exchange sufficient goods for real goods for the notes that are worthless in themselves. Unlike the creators of the ICOs, the state has the advantage that it has a mostly decades, if not centuries -old history, armed forces, economic resources and a personnel stick. A state has enough to maintain a advance of trust that is usually sufficient to give the banknotes created by it.
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Now it seems that some states are discovering that they can use this trust great to fill up the state treasury via ICO. After Venezuela has submitted with the supposedly oil -covered Pedro, the Marshall Islands now want to start their first own currency as a cryptocurrency with the “Soouweign (SOV)”. The project is quite ambitious.
The sovereign (SOV)
With 72.000 inhabitants and a land area of 181 square kilometers, which are scattered on more than 1220 islands, are part of the smallest states in the middle of nowhere between Australia and America between Australia and America. The Republic is still suffering from the consequences of the massive nuclear and hydrogen bomb test that the United States carried out in the 40s and 50s on formerly inhabited Atolls of the country, and does not have a rosy future prospects: the economy is growing weakly and is strongly dependent on the support of the US can make uninhabitable.
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The Marshall Islands do not have their own currency; So far, the dollar has been used. Now the parliament of the island, the so -called Nitijela, has decided to introduce its own currency for the first time: to introduce its own cryptocurrency. This is to be assigned by ICO and then circulate as an official means of payment in addition to the dollar.
More specifically, the parliament has passed the following plan: There should be a total of 24 million SOV, which are ever divisible in 100 subunits. In front of the ICO, the Republic receives 12 million SOV, of which it sells 6 million. The proceeds and the remaining 6 million SOV are to be distributed to various funds, including funds for dealing with climate change and nuclear pollution. Then the money supply will grow by 4 percent annually. The new coins, which are newly brought into circulation, either go to the miners or are distributed by the financial minister. All citizens and retailers of the country should be supplied with the necessary technical means to use the SOV.
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The ICO is organized by the Israeli startup Neema. With it, the country “Blockchain enthusiasts who have nothing to hide, risk capitalists, banks and other financial institutions would like to have a participation in forming the first economy based on crypto.“Unlike all other known cryptocurrencies, the sovereigns integrates the identification of the users into the protocol. The “Yakwe Framework” will bind every wallet to an identities that are verified by passports and fingerprints. The identity of the user is saved on the blockchain, but so encrypted that only it can reveal it. With the SOV, the country would like to operate the “huge need for a non-anonymous blockchain system that works in regulated environments,” hopes Minister David Paul. Because the currency has the advantages of Bitcoin without the disadvantage of anonymity.
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Further leading technical specifications will not be revealed. If the currency will be a token on a blockchain like Ethereum? Or if it becomes its own blockchain – and if so, it is generated by proof of work or proof of stake? You can only be excited. Here we are now looking at other state blockchain projects.
Türkiye and Iran
There are tender indications that both Turkey and Iran are planning to issue their own cryptocurrency in the coming months.
After all, there are some information for Turkey by an article from Al-Monitor. So the small partner of Erdogan’s AKP, the party of the National Movement (MHP), stands behind the idea of developing a Turkcoin. “The world enters a age of a new digital system. Turkey should form its own digital system and its own digital currency before it is too late, ”says the party’s deputy chairman, Ahmet Kenan Tanrikulu, the magazine.
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Tanrikulu previously presented a 22-page, surprisingly innovative report on digital currencies. In it he explains that the use of digital currencies and the earnings of profits by mining and the trade in cryptocurrencies are not punishable. The spread of cryptocurrencies in the trade increases rapidly, according to the report. In order to prevent tax avoidance, the escape of capital and money laundering, it is proposed to build a state-controlled Bitcoin exchange.
With regard to its own currency, Tanrikulu says that Turkey should build the infrastructure for its own blockchain database. Turkey’s own currency should be based on the “Wealth Fund”. The politician is conforming with Mehmet Simsek from the AKP, the deputy Prime Minister of Türkiye, who is responsible for the supervision of the economy and chairs the central bank. This already terminated in an interview on 7. February that the government would make preparations for the start of a national cryptocurrency based on the “Wealth Fund”. This includes large state assets, such as the Turkish Airlines, the Istanbul stock exchange, the gas company Botas, Turkish Telekom, Ziraat Bank and the National Lottery. These serve as a kind of value anchor for the digital currency of Türkiye.
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About Iran we only have a Coindesk article that refers to a Persian message from the central bank. This says that the central bank is developing a cryptocurrency that is managed by the government. More details are very rare or. evaporate in trivalies.
Venezuelas Pedro – a single story of lies?
Meanwhile, criticism of Venezuelas Pedro. In particular, an article of a Venezuelan member of the crypto scene circulating on Steemit does not leave good hair on the currency project of the socialist country, which supposedly covers a token with a barrel of crude oil.
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According to the article, ICO, as President Nicolas Maduro claims, did not take $ 750 million – but no tired cent. There would have been no start, just a sloppy website that does not know exactly which blockchain of the coin is running, uses bad SSH certificates, emails only sent with a six-hour delay and had amateurous JavaScript bugs. There is still no wallet, just as little the opportunity to buy tokens. “Damn, I was even able to confirm that the government has not yet developed a smart contract and has not yet published a token.”
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Maduro has pulled all the registers. For example, he said that he met with representatives of the NEM Foundation, which was not true at all and became a PR altitration for the foundation. The author also considers the price of $ 60 for a pedro – which is supposed to represent a barrel of crude oil. Venezuelan oil does not achieve this price when it is loaded onto a freighter, and especially not when it is still in the Earth of Ayacucho, a fully undressed oil field through which Maduro covers the pedro.
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All of this does nothing but a pure fraud for the Venezuelan author. Another in the history of fraud and do not lie poor government Maduro.
Nevertheless: Venezuela rises to cryptocurrencies?
Whether fraud or real – the ICO of Venezuela has an exciting side effect: the president recently announced that all cryptocurrencies, including the pedro, are completely legal. In view of the previously hard restriction of foreign currencies and strict capital controls, this is a big and surprising step.
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Maduro has commissioned the various authorities to accept cryptocurrencies for their services. This includes all the services of consulates and messages around the world. The national airlines should also sell tickets against cryptocurrencies and pay kerosene with them. In addition, tourists should soon be possible to pay services and hotels with digital currencies, as well as the petrol stations that Venezuela in the country and at the borders maintain colombia, as the large state oil and gas companies are supposed to accept cryptocurrencies.
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It is difficult to say what exactly the government prompted the train. It is due to the expectation to get great income in cryptocurrencies thanks to the ICO in the near future? Or actually the country has already large sums in Bitcoin, Ethereum and Co due to the unofficial advance booking of the tokens. receive? This could be a good reason for full legalization. It would also be conceivable, however, that Venezuela is trying to advertise the ICO through the comprehensive acceptance of the Pedro and other cryptocurrencies – one could also say “pumping” – or that the country is simply looking for a functioning money after your own currency, the Bolivar, is more or less unusable by hyperinflation. Venezuela may also simply try to shake off the oppressive capital controls by contributing its part to replace the dollar as a leading currency for international trade with cryptocurrencies.
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Shitcoins
At the end of this overview of the state crypto ambitions, we have to come back to the category of shitcoin mentioned in the heading. The shitcoin is an esteemed expression for a cryptocurrency. Most of the time, representatives of dominant cryptocurrencies, especially Bitcoin, strive to wop off other crypto projects unseen. However, this does not mean that it would have no value as a category.
Shitcoins means cryptocurrencies that basically have no other existence authorization than to make their founders and the crypto whales rich. They are a bad investment because they are not innovative and have no good developers behind them. In addition, they mostly gave the founders an incredibly high bonus by enabling the founders by enabling them to maintain a particularly large number of coins in one way or another. On the cryptoma markets, the liquidity of shitcoins is so low that the old coin whales manipulate the course through pump’n’dumps and thus enrich themselves at the expense of newcomers.
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If you create the category of shitcoins on the state cryptocurrency projects, it does not look particularly good for them. With a premining of 50 percent and the missing developer community, the sovereign (SOV) is already suspected of being a shitcoin. However, it could be with the 70s.000 inhabitants of the Marshall Islands have a lively user community and have a real economic added value as an alternative to the dollar. Finally, the project seems to be driven seriously and transparently and also with a real, albeit questionable innovation – the abolition of anonymity. The SOV should not be a real shitcoin.
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With the Pedro, the situation is of course different. The coin fulfills significantly more criteria of the shitcoin: advertising with non -existent collaborations, the blurred and confusing technical descriptions, the bad website, questionable claims about income, the missing developers – there are many red flags. If the Pedro had not the Venezuela bonus, you could only advise investors to continue running as quickly and wide as possible. But you also have to say that the coin, if he should be online and open source, can still be a progress. Because worse than with the Bolivar, the largest shitcoin of the fiat currencies, it can hardly happen.
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Overall, the development of state ICOs should be observed with a certain skepticism. Apparently it is often the motivation of the government to fill its cash by letting the trustworthiness of a state out of the cryptoma markets with digital gold. The state ICOs also show that a money issued by the government has not yet been able to keep up with the high standards that the markets have in good crypto money. If the government did not exist, both the coins of the Marshall Islands and Venezuela would not be interesting.
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However, the planned cryptocurrencies make it exciting again. Perhaps you mark the downfall of the Fiat money by showing how little state can compete with private money-and maybe you are a milestone in the evolution of the fiat money, which, after centuries of paper and virtual databases, you are finally becoming firm and stable with cryptography.