Gold in London, confidence, bitcoin and the crisis in Venezuela

Maduro could not dispose of the gold that Venezuela has in London, political reasons abound in his explanation

By Alex Vallenilla / @alexvallenilla

The economic crisis that Venezuela is going through has an impact on the global debate of digital assets. Recently, the madurismo has reclaimed to London, where there are reserves in gold of the Venezuelans, the return of at least 1.2 billion dollars in the precious metal, to which the Londoners have refused.

The reason for the custodians is that there is an uncertain political situation in the South American country. In Venezuela there is a political confrontation that has resulted in the Western bloc not recognizing the powers of President of the Republic to Nicolás Maduro, after making an election that was not recognized, as convened by the National Constituent Assembly (ANC).

The ANC is also illegal, according to the political positions of Western countries that do not recognize their legality, but also because the Constitution says so. And it is that the ANC was appointed without the participation of the opposition in Venezuela, after it was convened without the prior consultative referendum indicated in the constitution.

The above justifies pointing out Maduro's illegal exercise of the presidency in Venezuela.

Trust and gold

Venezuela can not dispose of physical gold, although there is an argument that justifies the Londoners to make the determination, for the purposes of the sector that claims the money represented in the ingots, this allows to determine that the precious metal is not safe.

To move digital assets, only access to public keys is required, with control of private keys. Assuming that a country uses decentralized digital assets, as part of its international reserves, the current technology allows the use of multi-signatures and an empowered council of power to make transfers, would authorize the operation.

In the above, a wide and bitter debate may arise. Although the circumstances that Venezuela has, it is subject to value judgments, according to the political position of each person, the use of physical gold does not guarantee anyone and a State that has disposition of money, as is the case with this case .

The power centers of the world, both political and financial, have been fierce enemies of Bitcoin for the simple reason that they have no ability to control it.

In the world, criticism arises against London, considered until then one of the most important financial centers in the world. That the transfer of assets to a State has been denied, makes others think that they do not trust gold and whoever is in custody, regardless of whether there are reasons for Maduro to have them or not.

The criticism that has arisen is based on the fact that a country that is not aligned with the United States could not have its reserves in the financial centers in which the West exerts influence, which will undoubtedly have consequences later on.

Bitcoin and ethics

Seeing the opposite, the use of Bitcoin in such a case has implications in the moral aspect. It has been said that the cryptocurrency, due to its characteristic of privacy, allows transactions that can not be supervised by financial authorities, therefore it is linked to exchanges outside the framework of the Law.

If a country like Venezuela and in the case under discussion, had instead of physical gold, bitcoins in international reserves, for Maduro and his bureau it would not have been enough but the simple use of private keys to dispose of the assets. You have to remember that bitcoins are in the database known as the blockchain, and this does not have a physical location.

There would have been no need for an authority in London to decide whether or not to deliver the securities, as has happened with gold, under the criteria set forth.

But for a majority sector of western society it would have been very bad seen that the madurismo had disposed of the reserves in case of being in digital assets, then there are complaints in the world of the worst corruption ever seen in any country.

From Venezuela there are at least some 350 billion dollars that were stolen from the nation. The money of all Venezuelans. Sums trapped in accounts that are frozen, and under international investigation, although the amounts reported so far are very few compared to what was the size of the looting of the Venezuelan nation.

It is a debate that will mark the world, which will set precedents in the future of the use of physical gold as a reserve asset, of the power that political and financial elites have, of the use of decentralized digital assets that can not be supervised by authorities.

What can be concluded prematurely, is that Maduro could not use gold and that is good news for those who face him, while any citizen who uses cryptocurrencies, has its resources immediately, without intermediaries, this allows to deduce that in In the future, bitcoin would be safer than gold for many, although the ethical issue remains latent.