The President of Venezuela, Nicolas Maduro, has announced that the price of the Petro (PTR) will be increased from 3,600 Sovereign Bolivars (VES) to VES 9,000. This announcement coincided with a 150% increase in the minimum wage for Venezuelan workers.

This implicitly indicates that there is no free market for the Petro, which is more evidence that the token is not an actual cryptocurrency. Actual cryptocurrencies are traded on exchanges and their price is set by free market dynamics; centralized parties can no longer arbitrarily adjust their price after allowing their tokens to trade on the open market.

The Petro is the official national cryptocurrency of Venezuela and is supposed to be backed by oil. An in-depth study published on Reuters found that the oil backing PTR is, in fact, a speculative reserve located underground near the town of Atapirire. There is no drilling infrastructure in place for this oil and it is unlikely to be brought to the surface for many years. Further, the Venezuelan government has presented no evidence as to how the Petro is actually linked to oil reserves.

The fact that the Venezuelan government can set the price of the Petro is just the latest piece of data among an array of evidence which suggests the token is not a genuine cryptocurrency. The Petro block explorer has no block or transaction data, besides a block counter at the bottom which does not correspond to its 1 block per minute settings. Also, the wallet for the Petro is unavailable at this time, making it impossible for anyone to download and run a node.

Those who have bought PTR received a paper certificate but no actual cryptocurrency. It appears the Petro is just another form of fiat currency easily printable by the Venezuelan government. This is further proven by Maduro’s decree that only Petro purchased in 2018 can be exchanged for fiat or other cryptocurrencies, with a ban on trading for tokens purchased in 2019 and beyond. It would not be possible for Maduro to do this with a fungible cryptocurrency, since each unit of a fungible cryptocurrency is indistinguishable from the rest of the circulating supply. It is only possible to enact a ban like this for non-fungible paper certificates.

That last point ties right back into the subject of this article. If the Petro were a fungible cryptocurrency, then there would be trading pairs for it on cryptocurrency exchanges, and Maduro would not be able to set the price. All evidence indicates that the Petro is not a cryptocurrency and is a non-fungible fiat currency.

 

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