Venezuela is “banking” on their new crypto asset, the Petro (PTR), to help shore up the country’s finances.
The Petro got issued by the state and backed by the country’s sizeable crude oil holdings. Venezuela is filthy rich when it comes to proven oil reserves, with nearly 300 billion barrels. The vast oil reserves and other subsidies make the country the home of cheap energy production. That means Bitcoin and other cryptocurrency mining in the nation has a cost advantage over almost all other worldwide competitors. Mining cryptocurrency has been going on there for years but is only getting legalized as the Petro comes to market.
The Petro Could Help Spur Mass Adoption
For Bitcoin users, the adoption by Venezuela could signal a boon in mass adoption. The country will start accepting taxes and fees in cryptocurrency, and will also settle oil purchases using digital currency. These moves will provide a lot of liquidity to worldwide crypto markets. The country is offering a pre-sales ICO and has released a white paper that outlines the project in detail.
Speculators are taking note of the project, largely because a sovereign country is using hard assets to back a cryptocurrency. Not only that, they will need to create confidence in the Petro (and by extension other cryptocurrencies) to usher in a new way of doing business. However, not everybody is happy with the project. There are many political opponents to the leadership of the country, and it’s more accurate to say that that PTR is backed not by barrels of crude oil, but by the inflation-ridden Bolivar.
Pay Attention to the Details
Even more critically, you cannot get much further away from the concept of decentralization than by having a government-issued coin. The Venezuelan government has the sole authority when it comes to setting the value of the PTR. That means the Petro is not going to be a cryptocurrency in the sense most people think of the term. Despite these drawbacks, numerous investors are very interested in the Petro directly because nothing more than faith backs Bitcoin and other highly-valued cryptocurrencies. Yes, a natural resource and sovereign-country backing are preferable to that, they surmise.
Proponents of the project are hoping that the Petro can overcome these early objections to become a valuable, local currency for Venezuelans. For potential investors, it’s crucial to read the White Paper. There are a number of concepts circulating about the PTR without merit when you read that document. The most critical detail to keep in mind is that these tokens will never represent ownership in crude oil resources. Setting a value for the crypto-coin and allowing for redemption is up to the sole discretion of the Maduro government. That means investors need to believe in the vision of that government both for managing their country and their new altcoin.
Considering how controversial XRP is because its managed by a company and is a solution for banks, it seems likely that the PTR will be a subject of intense interest and debate in the crypto community. The scale of the project is immense. That alone is enough to warrant observation and study. If the project were to succeed on a significant level, it would push many other sovereign states to consider their options. At the very least, government-issued cryptocurrencies will help draw more people into the overall markets. You can learn more by visiting the pre-sale page. Like all ICOs, this one carries a significant degree of risk and may not be available in your jurisdiction.
It’s worth pointing out that visiting that page is the only way to get involved with the ICO. Some illegitimate sources are offering the Petro for sale, so be careful of who you choose to conduct business.