How much do you know about Petro ? Venezuela is the first country to decide to have its own national digital currency . Many people are familiar with the economic situation of Venezuela and its sick economy.
Could this national token save them from a bad economic situation? The proposal to make such a token was proposed for the first time by the then president of this country. Stay with us in this article to get more information about Petro digital currency.
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What is Petro currency?
Petromoneda , known by its abbreviation PTR in the market, is the national currency of Venezuela . This currency was launched in 2018. Its creation was suggested by the president of this country, “Nicolas Maduro”.
This digital currency was finally created and made available to the people by the Central Bank of Venezuela. Petro is the first national digital currency in the world .
Of course, the first one is not necessarily the most popular! Petro was not well received and therefore could not be a good example for other countries in the world.
Petro’s name is derived from the word “petroleum” which means “oil”. The support of this cryptocurrency is natural resources such as gas, gold, diamonds, mineral resources and especially oil. Venezuela is one of the richest countries in the world in terms of natural resources, and it is logical to use these resources as the basis of its currency.
The history of the creation of the Petro currency
The idea of creating such a currency was first brought up by Hugo Chavez, the 45th president of Venezuela. According to him, national resources could be a good support for this currency.
Venezuela’s heavy financial crises in 2006 and later convinced Chávez to implement such a strategy to escape the crisis.
Financial crises in this country reached their peak in 2007 and 2008. However, Chávez could not implement his idea during his lifetime. He died in 2013.
At the beginning of 2018, Maduro, the interim president of Venezuela and Chavez’s successor, announced that the country plans to issue 100 million Petro tokens, which at that time had a value of $5.9 million.
The pre-sale of this token started in February 2018 and ended exactly one month later. Government sources announced at the time that this token was able to raise $3.3 billion in capital.
At the same time, people called it a government propaganda, and then it became clear that there are contradictions in the white paper of this cryptocurrency. Finally, with many problems, the National Assembly of Venezuela called this property unofficial and illegal.
How does Petro work?
There is no detailed information on how Petro works. Our knowledge in this case is only limited to some points and includes only the things that have been published in the Token White Paper. For this reason, it is difficult to comment on the technical issues of this cryptocurrency.
Petro depends on the performance of nodes, miners and persistent nodes. The details of the network and its operation are not known. This cryptocurrency works based on a special blockchain whose technical information is not available to everyone. Based on available information, the Petro mechanism is a combination of proof-of-work and proof-of-stake algorithms.
Based on this algorithm, a block of 4 megabytes is produced every minute. Masternodes can get 0.001% reward from transactions. Of course, their identity is still ambiguous. In the blockchain of this network, more than 100 million tokens are not available and its structure is based on Dash software.
Does Petro meet the criteria of a digital currency?
The answer to this question is negative. Although this currency is officially considered a digital currency, it does not have the criteria that a digital currency should have. For this reason, the first problem for Petro is whether it has the identity of a digital currency or not.
The government’s complete involvement in its development and expansion and the lack of capacity for other people to enter the development stages have caused one of the most important pillars of cryptocurrency, i.e. its decentralization , not to be present in Petro. The source code of this project was programmed by a government company and has not been made available to the public or even observers.
This company, which is called “Suncrip”, has ambiguities even in legal and judicial terms. Structural problems can also be seen in this currency. For example, in its structure, the asset creator, development team and roadmap are not clear and there is no information about it.
In the white paper of this currency, it is stated that it can be mined, while ordinary users cannot even be a miner of this network. The website and web browser work only with Venezuelan IP and users have reported many bugs in the network.
According to the report of global exchanges, this token is currently facing a severe liquidity problem. Non-compliance with customer identification and anti-money laundering laws is another obstacle that prevents Petro from operating as a digital currency on international exchanges.
What are the obstacles facing Petro?
The Petro was supposed to be a payment intermediary that would solve Venezuela’s inflation problem in international payments. For it, domestic uses were also specified and many payments such as taxes, government debt and other payments were to be made by it.
The government spent a lot of money to expand this cryptocurrency and provided facilities for its users. The government forced many parts of the country to use Petro so that this currency would be functional.
This currency could greatly help the failing economy of Venezuela by clarifying, defining its path and proper legislation. But even the economic allies of this country did not welcome Petro and rejected it. After 4 years, Petro could not reach its main goal. Legally, not only Petro, but no asset can support the country’s natural resources.
In this article, we got acquainted with Petro and its features. This currency code is the national digital currency of Venezuela , which has been involved in severe economic problems for consecutive years.
Venezuela is facing heavy inflation and it is natural to do various things to escape from this bad economic situation.
One of Venezuela’s measures to escape from its crisis was to use cryptocurrencies. They wanted to escape inflation by creating a national token and using it instead of a national currency. The support of this currency is natural resources. Venezuela’s national digital currency could not reach its goal due to many problems and lack of transparency.