Press "Enter" to skip to content

Petro Gold Spawned After El Petro’s $735 Million Sales

NewsBTC

Venezuelan president Maduro announces countries second commodity backed cryptocurrency ‘Petro Gold’ the day after ‘El Petro’s’ initial private sale raised $735 Million.

Maduro Doubles Down With Petro Gold

Once again President Nicolas Maduro took the podium to announce a government-owned cryptocurrency. This time instead of oil its the Petro Gold which is to be backed by precious metals.

“Next week I‘m going to launch the petro gold, backed by gold, which is even more powerful, that will strengthen the petro,” Maduro said in a televised speech. The Petro which launched on Tuesday is reported to have raised $735 Million dollars on its first day of private sales.

Scheduled to be capped at 100 million tokens with an initial sales price of $60 – roughly the price of a barrel of oil – the government could raise up to $6 billion if the Petro succeeds in selling out. So far 824 million tokens have been made available.

It is not yet clear whether the Petro Gold is to be backed by gold held in reserves or the countries gold resources. In fact, no details about the new currency were given besides that it would launch next week. This sudden announcement doesn’t help the already highly criticized Petro and the Governments intentions for creating it.

Problems With The Petro

Widely seen as a poorly thought out solution to boost the floundering Venezuelan economy, where the fiat currency has been in a free fall for several years and inflation rates are as high as 600%, the Petro has been called a ‘stunt’ and ‘bogus currency’ by financial experts.

“The Petro is really a top-down hierarchically controlled asset, and its much more akin to a new way to tokenize oil. When the first gold ETF appeared, they weren’t considered gold, but a different way of packaging the commodity. With Petro, we really have a new wrapper around oil.”

Chris Burniske of venture capital firm Placeholder told Bloomberg.

Maduro himself now admits that the Petro was created in part as a way to skirt US backed economic sanctions against the country. While the US Treasury Department has warned investors that by buying the Petro they themselves could become subject to the same sanctions as creditors to the government.

The Petro Gold is not the first cryptocurrency backed by gold. The RMG backed by the Royal Mint in Britain was first announced in 2016 and the Perth Mint in Australia is set to launch their own in the coming year. But as critics have said in reference to the Petro, a digital currency is only as valuable as an investors faith in the issuer.

The post Petro Gold Spawned After El Petro’s $735 Million Sales appeared first on NewsBTC.

Venezuela Named Cheapest Country to Mine Crypto as El Petro is Launched

NewsBTC

As president, Nicolas Maduro rolls out the El Petro ICO, Venezuela is named the cheapest country in the world to mine Bitcoin. But is it also the most expensive place to live?

The manual for the first 82.4 million units of the Venezuelan cryptocurrency, El Petro was made available for download in multiple languages yesterday to much international criticism. The digital currency, which is linked to the countries oil reserves, has been derided as a workaround of the economic sanctions created to allow those in power to increase their wealth in the crypto market.

President Maduro announced that the valuation of the Petro’s 100 million tokens would be just over $6 billion and that the sale would bring a new economic era to the nation.

Cheapest Mining In The World

Meanwhile, the country has been named the cheapest location in the world to mine cryptocurrency. According to the company Elite Fixtures which carried out a study on the cost of mining around the world Venezuela is more than 100% cheaper then it’s near neighbor Trinidad and Tobago.

According to the company they took statistics supplied by countries and agencies around the world on electricity costs and compared the use on three of the most popular mining rig configurations. The cost in Venezuela was $531 followed by Trinidad at $1,190 with South Korea coming in at $26,170 per coin, the most expensive in the world.

China, Russia, and The United States present similar costs. China being slightly cheaper at $3,965 while both Russia and the US are around $4,700.

But Also The Highest Cost Of Living

While making money mining Bitcoin in the Latin American country may be very profitable due to its subsidized electricity doing almost anything else is very expensive. Inflation over recent years in Venezuela has been as high as 800% by some estimates making the Bolivar essentially worthless as the government prints more and more of the currency.

The oil-rich country carries a 14% budget deficit of its GDP and a 60 trillion debt after decades of mismanagement by corrupt or just truly wrong-minded leadership. Though the official exchange rate is about 6.3 Bolivar per US Dollar the black market rate is multitudes higher, perhaps as high as 100 times that.

Factor in the scarcity of everything from food to medicine, as well as a crime rate that has soared over the last three years and it’s clear that the cost of living in the country would offset the advantage of cheap electricity. Given the dire state of the economy as well as the government’s oblique regulatory stance on Bitcoin and other cryptocurrency trading the launch of El Petro seems an odd solution to the countries economic woes.

The post Venezuela Named Cheapest Country to Mine Crypto as El Petro is Launched appeared first on NewsBTC.

Petro: Risky Gamble or Golden Opportunity?

NewsBTC

Venezuela’s “Petro” cryptocurrency will attract investments from Turkey, Qatar, the U.S., and Europe, the country’s cryptocurrency regulator, Carlos Vargas, told reporters on Friday. The Petro will be offered for sale this Tuesday, February 20th, and comes as Venezuela is suffering from quadruple-digit inflation and chronic shortages of food and medicine.

Venezuelan President Nicolas Maduro announced the launch of the Petro in December. Maduro has repeatedly said that his country is the victim of an “economic war” — prompted by financial sanctions imposed by the United States — and that the sale of the new digital currency will help the South American country circumvent this problem.

“On Tuesday, there will be quite a few announcements about the start of the process,” Vargas said on the sidelines of a political meeting in Caracas. “And there will surely be a lot of investors from Qatar, Turkey, and other parts of the Middle East, though Europeans and Americans will also participate.”

Skeptics say that concerns about Venezuela’s financial solvency will likely limit investor interes, and the U.S. Treasury Department has warned the Petro may violate sanctions against the OPEC (Organization of Petroleum Exporting Countries) nation. These sanctions — levied last year by Washington — block U.S. banks and investors from acquiring newly issued Venezuelan debt, effectively preventing the country from borrowing abroad to bring in new hard currency or refinance existing debt.

Venezuela’s Superintendence of Cryptocurrencies and Related Activities as well as the Blockchain Observatory, will regulate how the Petro, which is “backed” by 5 billion barrels of oil reserves, functions. “This is going to allow us to move forward to new ways of international financing for the country’s economic and social development,” Maduro said.

Since its inception, the Petro has been controversial. Even Venezuelan lawmaker Jorge Millan had strong words against about the coin: “This is not a cryptocurrency, this is a forward sale of Venezuelan oil,” adding, “It is tailor-made for corruption.”

But that didn’t stop the President from moving forward. In January, Maduro announced that over 800,000 Venezuelans had already been recruited to mine the cryptocurrency. “We are going to call them a special cryptocurrency team… They will set up cryptocurrency mining farms in all states and municipalities of the country,” he said.

The president even approached OPEC with his idea: “I have explained to Mohammed Barkindo [OPEC Secretary General] the goodness of the Petro. The cryptocurrency is the world of the future. I am very excited as well as the people of Venezuela,” said Maduro. It’s not surprising he would look for the organization’s support: OPEC is comprised of some of the world’s top oil producers and has enormous sway on the global oil market.

The post Petro: Risky Gamble or Golden Opportunity? appeared first on NewsBTC.