Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
Venezuela's Petro Isn't Oil-Backed. It's Not Even a Cryptocurrency (Opinion)
Source: Investopedia
Venezuela's Petro Isn't Oil-Backed. It's Not Even a Cryptocurrency (Opinion)
By David Floyd | Updated January 16, 2018 — 2:06 PM EST
On Dec. 3, Venezuelan president Nicolás Maduro announced that the country would create the "petro," a "cryptocurrency backed by reserves of Venezuelan wealth – of gold, oil, gas and diamonds."
The announcement preceded the erstwhile Long Island Ice Tea's pivot to cryptocurrency mining – they're called Long Blockchain Corp. (LBCC) now – and Eastman Kodak Co.'s (KODK) initial coin offering, but the three should be seen in the same light: drowning entities splashing towards an island of dumb money. Kodak hasn't turned a profit since 2013, the year it emerged from bankruptcy. Long Blockchain has been losing money for even longer. Both firms saw their stocks surge by triple digits following their crypto announcements.
-snip-
The Petro isn't Anything-Backed
In a fawning interview that appears on Venezuelan state media, computer science engineer and blockchain entrepreneur David Jaramillo told Celag, a sympathetic think tank, that the petro's value
The idea that commodity prices – themselves subject to pretty sharp fluctuations – will dictate the price of the petro is absurd. Even if Maduro's claim that the cryptocurrency (we'll call it that for the moment) is "backed" by natural resources meant anything, that stabilizing influence would hardly still the needle amid the rapidfire booms and busts of the cryptocurrency market. The claim that cryptocurrency investors are clamoring for commodity-backed coins is also strange: it's been tried, because everything has, but prior to the petro the topic was fairly niche.
-snip-
By David Floyd | Updated January 16, 2018 — 2:06 PM EST
On Dec. 3, Venezuelan president Nicolás Maduro announced that the country would create the "petro," a "cryptocurrency backed by reserves of Venezuelan wealth – of gold, oil, gas and diamonds."
The announcement preceded the erstwhile Long Island Ice Tea's pivot to cryptocurrency mining – they're called Long Blockchain Corp. (LBCC) now – and Eastman Kodak Co.'s (KODK) initial coin offering, but the three should be seen in the same light: drowning entities splashing towards an island of dumb money. Kodak hasn't turned a profit since 2013, the year it emerged from bankruptcy. Long Blockchain has been losing money for even longer. Both firms saw their stocks surge by triple digits following their crypto announcements.
-snip-
The Petro isn't Anything-Backed
In a fawning interview that appears on Venezuelan state media, computer science engineer and blockchain entrepreneur David Jaramillo told Celag, a sympathetic think tank, that the petro's value
"won't be defined by market speculation, which often provokes large up-and-down fluctuations. The petro's price will be related to the international price of gold, gas, oil and diamonds. This is what the digital currency investment community has been craving for a long time."
The idea that commodity prices – themselves subject to pretty sharp fluctuations – will dictate the price of the petro is absurd. Even if Maduro's claim that the cryptocurrency (we'll call it that for the moment) is "backed" by natural resources meant anything, that stabilizing influence would hardly still the needle amid the rapidfire booms and busts of the cryptocurrency market. The claim that cryptocurrency investors are clamoring for commodity-backed coins is also strange: it's been tried, because everything has, but prior to the petro the topic was fairly niche.
-snip-
Read more: https://www.investopedia.com/news/venezuela-petro-not-cryptocurrency/
1 replies
= new reply since forum marked as read
= new reply since forum marked as read
