It seems more controversy regarding Venezuela’s Petro looms on the horizon. With the whitepaper for this currency now public, there are a lot of mixed feelings. More specifically, the plan to create an Ethereum-based token raises a lot of questions. While that approach makes sense, it is a bit unclear what this has to do with the actual cryptocurrency itself.
Ever since this idea was first announced, there has been a lot of criticism surrounding the Petro. A national centralized cryptocurrency makes a lot of sense in Venezuela. The country suffers from financial hardship and is effectively running out of money. Using the natural oil reserves tied to a new form of money is their last realistic option. The whitepaper for this particular currency has been unveiled earlier this week. That is a positive change, even though not everyone likes the specifics as of right now.
The Petro Concept Makes Even Less Sense now
More specifically, it seems the government of Venezuela will create an Ethereum token first. This initial coin offering has no real connection to the Petro itself. Even so, the concept of an ICO is the latest thing anyone expected at this point. The cryptocurrency is supposed to have its own public offering as well. This new token will, in turn, help “drive demand” for the cryptocurrency. It doesn’t make much sense to most people for obvious reasons.
It is possible these Ethereum tokens are to be exchanged for the Petro in the future. If that is the case, there is no long-term use case for the tokens themselves. After all the cryptocurrency is backed by the oil reserves. This token has no instinct value and seemingly doesn’t fit this plan in any way possible. With the pre-sale of these tokens starting in two weeks, it will be interesting to see how things play out. The Petro presale will commence on March 29th, as originally communicated.
All of this only makes the entire Petro ordeal even more worrisome. The Venezuelan government is creating a token no one needs and which serves no real purpose. Considering how the cryptocurrency sale will only be open to accredited investors, it’s safe to assume the same applies to this Ethereum token. For now, there are a lot more questions than answers regarding this venture. It’s no real surprise, all things considered, but it fails to make any sense.
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