Oil Backed Cryptocurrency - Venezuelan President Issuing First 100 Million Petros

in cryptocurrency •  last year

Venezuela has experienced years of economic downturn as a result of hyperinflation, which has caused the population to turn to Bitcoin as a means of transaction. This is not uncommon, with many African countries experiencing hyperinflation following suit.

In light of this Bitcoin takeover, the Venezualan President Maduro announced on Friday that he will launch the nations's own cryptocurrency:

"I’ve ordered the notify of a hundred million Petros, in response to nationwide wealth. Every Petro will luxuriate in the price of a barrel of Venezuela’s oil."

The officials in charge of launching the Petro are set to have a meeting on January 14th to discuss the currency - this will coincide with the release of the Petro whitepaper. Moving forward from here, the President has stated as much as 3 billion barrels of Venuzeula's extensive oil reserves will be retained for backing the Petro.

The future of the Petro is set to be an interesting one, with Maduro explaining that while the cryptocoin will remain valued at one barrel of Venezuelan oil, further minting will be backed by oil, gold, gas and diamond reserves. The end result may be the first country to adopt a cryptocurrency as its national currency - something Bitcoin has aimed to do for nearly a decade.

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Honestly speaking, I would think the citizens of Venezuela distrust the government and won’t be quick to adopt the oil backed crypto. I think it’s more likely that they’ll continue to turn to Bitcoin or other alternatives. Just my opinion


You make a fair point I had not given much thought to. The main reason I would say BTC is unlikely to be able to take over a country's monetary system is the insane transaction fees. Given enough time, all the BTC would have been transferred to the overseas miners.

Maybe a different crypto altogether is more likely?

I wonder what kind of consensus algorithm will be used, if it is centralized it will be hackable! If it is decentralized they can't control it totally and then it is a EXTREMELY interesting experiment!

I see the benefit for the Venezuelan state here, but I don't see the benefit for anyone else that would entice them to use it. Can anyone shine some light on that for me?


Assuming the state does not cheat the system, it's a pegged currency. Those are hard to come by these days, since fiat abandoned the gold standard wholesale.

But doesn't it violate the whole point of cryptocurrency that is Decentralization. If government and the oil companies are controlling it then we can't consider it as crypto..


I mean, USDT is backed by a centralised bank account. It's still a cryptocurrency, just not a fully decentralised one as the value is centralised.


Fair enough..


It will be a coin supported by a market. There are many like that even the not too famous Pot Coin. There are, as now, Cryptocurrencies: 1384 / Markets: 7540
Market Cap: $827,531,880,944 / 24h Vol: $46,449,067,514 / BTC Dominance: 34.7% (Few months ago, it was above 50%).


Thanks for the insight...

Another coin coming out of the virtual mint. If this trend continue, countries will start using cryptos rather than fiat currencies. The banks won't be very happy if that happens. Thanks for the informative news.


Good - the banks have been digging us into a deeper and deeper hole of debt based economy for too long.


Banks are not going to suffer, they are already planning to have their own coin. Western Union and Paypal are weaker than banks in my opinion. Transfering money from one side of the world to other zone of the universe is faster now. "THE INTERNET IS GOING TO EAT YOUR BUSINESS." Andrea was so right in this phrase!

I think Venezuela has nailed it. The future of money is cryptocurrencies. Backing cryptocurrencies with commodities patches an inherent flaw and places cryptos on a firm path to dethroning fiat money.

Nice @dutch..

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how do you think or your prediction about bitcoin price in 2018 whether it will be increasing or going down.
I just want to survey some people's opinions


Up. There are only 21 million bitcoins to share and lately people are getting the news: 1 bitcoin is worth over $15,000. Right now there are close to 17 million coins in use. So the more demand for the coin, the higher the price will go. It could go as high as $50-$100,000 this year. Although there is a big oposition and the competition is extraordinary. Ethereum is promising two forks to increase its value, so competition will be tough. Those high transaction fees is doing a big harm too. Miners are trying to retain them as much as possible too.

how do you think about the price of sbd and steem in early 2018 this?

Oh that's not going to end well...

We want it decentralized, the crypto owned by Government is not acceptable by me.

I do not trust Maduro's desire. For once, each time he opens his mouth he competes with a donkey. Once he was having a special meeting in Brazil's capital and he told his pilot to go to Rio, where nobody was waiting for him. Maduro for sure knows nothing about Blockchain and Bitcoin. And on the other hand, I doubt he has any big reserve of oil. Chavez gave a lot of petroleum to Castro and the old man sold it and put all the money in European Banks.

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