If you’ve been staying up to date with the latest crypto news throughout this year, there’s a big chance that you heard about Petro, Venezuela’s national, oil-backed cryptocurrency.
When it comes to describing Venezuela’s current financial situation, saying that it is experiencing difficulties is nothing short of an understatement. In short, Venezuela is currently on full-scale financial ruin.
Insight on how the Petro came to be
The hyperinflation and a lot of other factors have transformed what was once one of South America’s richest countries into a country whose national currency (the Venezuelan Bolivar) is practically worthless.
President Maduro took the world by surprise when it announced the Petro which was “marketed” as a national cryptocurrency that should, at least in theory, help with Venezuela’s poor financial situation. According to Maduro, this situation in Venezuela is due to the multiple U.S. sanctions and even went on to further explain that the cryptocurrency will be backed by the natural resources of the nation.
The Petro will be backed by the following Venezuelan natural resources: oil (50%), gold (20%), iron (20%), and diamonds (10%). Furthermore, the Venezuelan government has confirmed that it will promote the use of Petro in PDVSA, as well as in other public and mixed companies. The government intends to make Petro available for all Venezuelans to help them make both national and international purchases with it.
Few details about the Petro Coin
According to the official whitepaper, the national cryptocurrency will be using both PoW and PoS technologies. The state will be keeping 51% of the initial Petros that will be created. There will be 100 million Pedros, of which 49% will be sold. In addition, the reward distribution will be 85% for masternodes and 15% for PoS. At this moment in time, the reward amount per block is still unknown even though a return of 0,01% is highly probable.
Even though the PTR was initially announced as being an ERC-20 token (based on Ethereum), it later changed, and it is based on NEM, which has been the platform of choice for the recent ICO. Interestingly enough, the Venezuelan government states that although the total number of Petro is finite, it still has the right to make new emissions backed by its reserves within the following ten years.
How to buy Petro
Users looking to invest in Petro Coin need to know that the coin can be purchased through the Venezuelan government’s official website. Maduro also announced that Petro would soon be available on the six largest cryptocurrency exchanges in the world. According to the website, Petros can be officially purchased starting November 5th, 2018.
Is Petro legit?
While the whitepaper explains various aspects of Petro, according to various experts, it doesn’t do a very good job at providing detailed information about the project as a whole, at least when compared to other typical crypto projects. There are others that believe that Petro’s whitepaper is more or less a copy/clone of Dash’s whitepaper.
The frail economic and political situation in Venezuela doesn’t do Petro much good on an international scale and from an investor’s point of view. Finally, it’s important to know that the coin has tons of unknown variables. After all, the project did end up changing its technology three times before its launch. Additionally, it’s still unclear if the supply will be finite. While the government states that it will be finite, it also states that it has the right to increase it over the following ten years.
In short, there aren’t still enough available details to make Petro a hidden gem for any serious investors. Currently, Petro Coin can be considered a highly speculative offering, at most. However, it will be interesting to see how will Petro fair against other international cryptos and if it manages to help Venezuela recover from its crushing financial crisis.