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On today's show:
Venezuela Releases Petro Whitepaper Ahead of their $5 Billion ICO
This has been coming for a little while now, it’s just a case of getting more details on exactly how it’s going to roll out.
The ‘Petro’ is a cryptocurrency that the Venezuelan government plan to launch and back with the country's huge oil reserves.
Almost sounds like an alternative to the ‘Petro Dollar’ does it?
Dangerous territory if you ask me. The US tends to get upset when anyone challenges the dominance of the dollar.
The Petro is going to use Ethereum, but only to conduct the ICO. After that the Ethereum based ERC20 tokens will be swapped to native tokens on the PETRO platform.
The president of Venezuela Nicolas Maduro has now officially signed off the whitepaper for release.
And if you don’t believe me head on over to elpetro.gob.ve
Because here you can download and read the whitepaper for yourself.
This is a significant milestone in crypto history. The first example of a nation state doing an ICO, did you ever think we would see it?
Unfortunately they are not using a public blockchain but it’s progress nonetheless.
I mean, an actual government opting to participate in a new economy built by the people of the world? I think that sets a big precedent. It’s the first domino.
Feel free to read the official materials yourself but I’ve picked out a few highlights for you.
There’s always this question of how a cryptocurrency acquires value.
Here is the answer.
It gets better…
I’ll say it again, that is NOT going to go down well the US government in my opinion.
It’s a shame they didn’t opt to build the whole thing on Ethereum because then it would be unstoppable.
The downside is such a path means the Venezuelan government giving up a bit too much control, plus Ethereum doesn’t currently have the capacity they’d need.
Now I said a minute ago that the PETRO acquires it’s value because the government will accept it as payment for taxes, but that’s more the answer as to where demand will come from.
It’s value is derived from the value of a barrel of oil.
The initial price of a PETRO is set to be around $60. Then if the price of oil rises, the PETRO should follow.
It’s basically tokenised Venezuelan oil, except it’s so much easier for the average person to acquire. It levels the playing field in exactly the way we have been waiting for.
I say the average person can acquire it, however there’s a caveat
So who knows which exchanges will be selected and what kind of limitations there will be on who can trade it.
In conclusion then:
Suffice to say, I have my reading material for today. I shall duly digest the whitepaper and see what else I can find.
One fact to bear in mind, is that Venezuela has the highest amount of proven oil reserves in the world.
More than Iran, more than Canada and than Saudi Arabia.
The other fact to note is that the hard cap for the PETRO ICO is $5b.
That’s 4.5% of Ethereum’s market cap at today’s price.
That could cause a major pump in the price of Ether so bear that in mind as we move towards the launch of the pre-sale on the 20th of February.