Monday, December 4, 2017

Venezuelan Government to Create a Digital Currency


How crazy can the digital currency world get? A mad dictator says he is going to launch his own e-currency.

Venezuelan President Nicolas announced on Sunday the launch of the “petro” a Venezuelan digital currency that he claims will be backed by oil reserves  and other commodities, reports Reuters.

“Venezuela will create a cryptocurrency,” backed by oil, gas, gold and diamond reserves, Maduro said in his regular Sunday televised broadcast, a five-hour showcase of Christmas songs and dancing.

He offered few specifics about the currency launch or how the government would pull off such a feat, but he declared to cheers that “the 21st century has arrived!”

  -RW

4 comments:

  1. What is the point of a crypto-currency that is backed by physical assets? And doesn't it take time and effort (computing effort) to create crypto-currencies (i.e., you can't just create them by fiat)?

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    1. I gotta be honest here, from my subjective value standpoint and my initial thoughts on the subject, I'd have more "faith" in a digital currency tied to a specific physical commodity if it was properly structured than I do for digital currency based on "work" done by computer that seemingly has no other value in the physical world.

      Again, I know it's a subjective measure of value- but that's the nature of money in general. (and I'm in the early stages of considering petro based digital currency from when I read it on Drudge the other day- it really depends on how it's structured, which might change my initial thoughts)

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    2. Printed fiat money takes effort too. It takes effort to make dies, inks, cloths, etc. Also, it takes some computing power just to put zeros in on a bank leger. In fact, even though dollars are fiat, at least they are backed by "faith of credit" of a very wealthy country. What are crypto currencies backed by? Not even that!

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    3. In addition to my previous comment, it may be the cost of dies, paper, and ink that has caused Venezuela to go to crypto currency. I guess they dont have enough trains to ship enough currency to keep up with inflation anymore.

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