Interested in hearing opinions here on the newly announced plans from Venezuela of a new crypto caled “Petro”.
In many ways first of it’s kind. To be issued by a Government, back by valued assets (oil & gas reserves and gold) and with a significant user case.
Will it get off the ground? How will/could it work? Any thoughts?
It’s exciting. I hope they don’t screw it up.
Making a cryptocurrency backed by an asset sounds like it will be difficult to maintain and allow for too much manipulation - they can print more currency under the claim that they’re producing more oil. If the Petro is going to maintain its value, “Backing” should simply mean that they accept the Petro in exchange for oil, but make the Petro’s monetary policy or inflation rate have nothing to do with oil production.
They’ll at least have to make it open source. If not, then only an idiot would hold this currency. This is not something that a government is likely to do since it forces them to be honest and give control over to the node operators and miners. You can also count on a large premine from a government, but if it’s within reason like less than 5% of total supply (assuming fixed maximum supply) then it may be still be worth holding.
Investing in Petro and trowing your money on the garbage are in almost every way similar, the difference is that when you throw it in the garbage you’re not supporting a tyrannical dictatorship.
As Brent pointed out they can print more currency under the claim that they’re producing more oil, which is more than likely, also there is a great change that Maduro will just take all the money from the ICO and run away. Petro is advertised as a way around the economic sanctions on the Bolivar, but in reality this is just a scheme to take foreign money and then default. Don’t forget who you’re dealing with, the Venezuelan Dictatorship already defaulted 2B dolars on the Brazilian Development Bank and Goldman Sachs (I don’t know how they aren’t a meme by now) just lost 400M after US sanctions on the bolivar.
My point is, investing in Petro is has three possible outcomes, and here they are ordered from most likely to least likely:
.Venezuela defauts (and all your money goes to a cruel dictatorship)
.Sanctions on the Petro are put in place (and you can’t acess your money that is now on the hands of a cruel dictatorship)
.You make some money (but a cruel dictatorship will make more)