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Venezuela Launches Oil-Backed Cryptocurrency (bbc.co.uk) 178

Posted by BeauHD from the crypto-asset dept.
Venezuela has launched a cryptocurrency backed by oil in an attempt to bypass tough economic sanctions imposed by the U.S. government. "The 'Petro' is intended to bolster the country's crumbling economy, which has been suffering from hyperinflation and devaluation for years," reports the BBC. "Venezuela claims it is the world's first sovereign cryptocurrency." From the report: Critics say the move is a desperate attempt by Caracas to raise cash at a time when Venezuela lacks the ability to repay its $150 billion of foreign debt. Opposition leaders said the sale constitutes an illegal issuing of debt, while the US Treasury Department warned it may violate sanctions imposed last year. The government says the currency aims to circumvent US sanctions on the economy. President Nicolas Maduro has said each tokens will be backed by a barrel of Venezuelan crude. The Latin American country has the world's largest proven oil reserves. A total of 100 million Petros will be sold, with an initial value set at $60, based on the price of a barrel of Venezuelan crude in mid-January. The official website published a guide to setting up a virtual wallet in which to hold the cryptocurrency, but did not provide a link for actually doing so on Tuesday.
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Venezuela Launches Oil-Backed Cryptocurrency More

Venezuela Launches Oil-Backed Cryptocurrency

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  • The best of all three worlds! (Score:5, Funny)

    by Anonymous Coward on Tuesday February 20, 2018 @07:36PM (#56160581)

    You've got Venezuela, Oil prices AND Cryptocurrencies! All hallmarks of financial stability and trust! Excellent work. Where do I send my gold?

    • Just send it to me Priority Mail.. I'm sure I can arrange to dispose of your disposable income in a more capitalistic way...
    • This is the slickest CC to date!

    • Indeed. With Venezuela's essentially broken economy, sustained low oil prices (with little indication of any significant rise in the near future), what does it matter whether the currency Venezuela is floating is conventional or crypto-currency?

      • If Venezuela only had oil as means for an economy, it would make sense. However, it used to also significant other assets, goods and services in addition to petroleum. Basing all their decisions on one commodity is a sure fire way to collapse an economy when alternative sources for said commodity exist. The problem isn't the people (rarely is), it is the government that knows better than everyone else what's good for everyone else. I'm sure the leaders in that country aren't suffering.

        • Re: (Score:1, Troll)

          by Uberbah ( 647458 )

          Basing all their decisions on one commodity is a sure fire way to collapse an economy when alternative sources for said commodity exist. The problem isn't the people (rarely is), it is the government that knows better than everyone else what's good for everyone else. I'm sure the leaders in that country aren't suffering.

          Venezuela has an ideal climate for agriculture. But they import food because NAFTA has dumped subsidized crops into the market below the cost of production. As with most American complaint

          • You know that NAFTA is an acronym, right?
            NORTH AMERICAN Free Trade Agreement.

            Venezuela is in SOUTH America, and is not a signatory to that trade agreement.

            Care to try blaming their collapsed, failing economy on external boogeymen again, or maybe the fact that when your government goes an steals^H^H^H^H^H^H nationalizes entire industries and retail chains, it decreases the incentives for investment for foreign entities past zero?

            Here's a tip: when you can't get goods into your country, it causes massive shor

        • Basing all their decisions on one commodity is a sure fire way to collapse an economy when alternative sources for said commodity exist.

          Saudi Arabia don't do much apart from oil and they're doing OK.

          Maybe it's to do with overall demand instead?

          • Not really, the recent cash seizures from their mega-rich, was mainly to keep the government open while they shifted from oil.

          • The Saudis also walk a fine line between selling to, and pissing off, their biggest customers.

            Venezuela does not.

    • Re:The best of all three worlds! (Score:4, Funny)

      by denzacar ( 181829 ) on Tuesday February 20, 2018 @08:35PM (#56160959) Journal

      That joke sounds a bit crude to me.

  • Venezuela is an interesting country... (Score:1)

    by Anonymous Coward

    It is interesting watching them put out a cryptocurrency, which is in the planning stages later in two months. Like Germany's currency reform, it has possibilities in becoming the replacement of the petrodollar, because it is essentially hackproof and immune to things like QA.

    Venezuela is bashed by right for "socialism", but they have done some things well. They enacted a complete gun ban on civilian ownership, and gun violence went down by a factor of 1000. In fact, their country isn't even on the map a

    • Re: (Score:1)

      by Anonymous Coward

      They aren't on the map, because they can't afford to record crime statistics any more.

    • Re: (Score:1)

      by Anonymous Coward

      Venezuela is bashed by right for "socialism", but they have done some things well.

      Come for the socialism, stay for the starvation (and fewer firearm deaths).

      Unfortunate for the folks that have to live through the misery, but thank goodness Venezuela is happening now because useful idiots like you have no leg to stand on to convince the next generation that socialism is cool.

      • Re:Venezuela is an interesting country... (Score:4, Insightful)

        by MightyMartian ( 840721 ) on Tuesday February 20, 2018 @08:03PM (#56160773) Journal

        Lots of people are dying in Venezuela, because all the "right" people have guns. I'd like to believe the parent's post is a bit of sarcasm, but I'm not so sure...

        • I'd like to believe the parent's post is a bit of sarcasm, but I'm not so sure...

          I hope so too, but I've seen so many loony leftists float socialistic utopian ideas that really amount to oppressive totalitarianism when implemented to not be jaded about such things...

          • Re: (Score:2)

            by torkus ( 1133985 )

            It's simple really - just trust your government: If no one but the cops have guns, no one but Bad Guys* will get shot!

            * Bad Guys, as defined by the cop at the time of shooting based on his/her sole personal judgment and interpretation of events. Any attempts to resist** said shooting (or any other demand) will be met with additional shooting until the Bad Guy is certified a non-threat.

            ** Resist as defined by the cop at the time of said action based on his/her sole personal judgment and interpretation of ev

          • really? leftist floating totalitarianism?
            Clearly you haven't been paying attention to what the Right has done to the US...

    • You understand Venezuela is broke, and oil prices are pretty low, with US producers just pumping it up regardless of anything OPEC or anyone else can do. Yes, it will be a cryptocurrency, but so what?

    • Re:Venezuela is an interesting country... (Score:5, Informative)

      by Hal_Porter ( 817932 ) on Tuesday February 20, 2018 @08:12PM (#56160805)

      https://www.reuters.com/articl... [reuters.com]

      With more than three killings per hour, Venezuela last year was the worldâ(TM)s second most murderous nation after El Salvador, a local crime monitoring group said. The homicide rate in Caracas alone was a staggering 140 per 100,000 people, according to the group, the Venezuelan Observatory of Violence.

      Authorities say nongovernmental groups inflate figures to create paranoia and tarnish the government, but even so the most recent official national murder rate - 58 per 100,000 inhabitants for 2015 - was still among the worldâ(TM)s highest.

      http://www.latimes.com/opinion... [latimes.com]

      The Venezuelan government stopped publishing comprehensive crime data more than a decade ago, and the discrepancies between what authorities say and data released by independent organizations are extreme.

      For instance, local officials announced that 17,778 Venezuelans were victims of homicide in 2015. But the Venezuelan Violence Observatory, a nongovernmental group, estimated that there were 27,875 murders that year, which would make Venezuela's homicide rate one of the highest in the world, at 90 killings per 100,000 residents. The group found that the rate climbed higher in 2016, to 92 per 100,000.

      Venezuela's capital, Caracas, was proclaimed the most violent city in the world last year by the Citizens' Council for Public Security and Criminal Justice, a Mexican research group that tallies an annual index of the world's most violent cities. The homicide rate supposedly topped 119 per 100,000 residents, the group said. But there are no official statistics to support the claim and, predictably, the Venezuelan government has denied it.

      One reason for the data discrepancies is that the Venezuelan government has excluded extrajudicial killings from its homicide count, while human rights groups such as violence observatory do not. Also, the government has traditionally relied on statistics gathered by the Ministry of Health, while the observatory combines this health data with unofficial information about so-called resistance deaths attributed to state security forces and other deaths being investigated by independent forensics agencies.

      In the absence of concrete and comprehensive statistics, some groups are attempting to gather oblique data on Venezuela's crime wave. Our organization commissioned a study on perceptions of violence from the Latin American Public Opinion Project at Vanderbilt University. Early data indicate that 6 out of 10 Venezuelans reported at least one murder in their neighborhood over the previous 12 months. By way of comparison, only 3.5 out of 10 respondents said the same in El Salvador and Honduras, considered the two most violent countries in the world.

      The public opinion project survey also found that 80% of Venezuelans are "very" or "partly" afraid of being murdered in the coming year. This fear of violence is fueling a migration crisis as Venezuelans flee to Brazil and Colombia.

      There are many causes of the spiraling homicide problem in Venezuela. Political and economic crises have undermined the legitimacy of institutions. The military and police have been largely discredited. State security agencies are said to both commit and ignore lethal violence. Impunity is rife and the cost of murder low, with an estimated 92% of homicides not resulting in a conviction. And gang violence has soared in the capital city.

      But without solid statistics, Venezuela has little chance of slowing the crime wave anytime soon. It is next to impossible to make effective public policy without reliable data. Over the last decade, Venezuela has implemented no less than a dozen anti-crime initiatives, with no visible results to

    • Re: Venezuela is an interesting country... (Score:5, Insightful)

      by ArmoredDragon ( 3450605 ) on Tuesday February 20, 2018 @08:22PM (#56160869)

      Venezuela has the second highest homicide rate in the world. Just how much of those killings do you think weren't firearm related? If most of them weren't, that doesn't help the pro gun control crowd at all, and in fact works very much against their argument.

      • Re: Venezuela is an interesting country... (Score:4, Insightful)

        by alvinrod ( 889928 ) on Tuesday February 20, 2018 @08:45PM (#56161033)
        Also the general legal lack of civilian access to firearms means that they're incapable of overthrowing their terribly corrupt and authoritarian government. I wonder if Venezuela will devolve into North Korea levels of destitution.

        At least people have been relatively free to flee into neighboring countries, but neighboring countries are starting to clamp down on that because it's becoming unmanageable. Colombia is reported to have had 300,000 migrants in the last 6 months [washingtonpost.com] on top of those who fled previously. Brazil has probably seen similar numbers.

        • Re: (Score:2)

          by gtall ( 79522 )

          Afghanistan and Somalia have plenty of guns for government overthrow...how zat working?

          • Re: (Score:2)

            by Q-Hack! ( 37846 )

            Afghanistan and Somalia have plenty of guns for government overthrow...how zat working?

            Non sequitur. The Afghanistan government works for most Afghani's. It's only the Taliban who want to overthrow the government and they are quickly becoming a smaller percentage of the population. As for Somalia, they don't have a government. So which tribe would you like them to overthrow?

        • Re: (Score:2)

          by pots ( 5047349 )

          Also the general legal lack of civilian access to firearms means that they're incapable of overthrowing their terribly corrupt and authoritarian government.

          Incapable? Even if it did come down to that kind of violence, and even if the revolutionaries were totally incapable of acquiring weapons from outside the country (as almost always happens in those wars), haven't we learned anything from Iraq? Our soldiers suffered something like nine times as many casualties from improvised explosives than they did from bullets. And Iraq has no shortage of guns. A gun, which requires line-of-sight, just isn't as effective at guerilla warfare.

      • Don't speculate... (Score:3, Informative)

        by jopsen ( 885607 )
        Look it up, a search for "gun" on https://en.wikipedia.org/wiki/... [wikipedia.org]
        Finds quotes like:

        The rise of murders in Venezuela following the Chávez presidency has also been attributed by experts to the corruption of Venezuelan authorities, poor gun control and a poor judiciary system.

        and

        According to Alessio Bruni of the United Nations Committee against Torture, "a typical problem of the prison system is gun violence, nearly circulating freely within prisons, causing hundreds and hundreds of people killed every year"

        Outlawing guns without a proper judicial system is hard. And outlawing guns when they are readily available from the US is very hard.

        I think it's fair to say that the ease of access to guns in the US causes a LOT of murders in south America. Where do you think Mexican cartels gets their guns from?


        Also what is with the obsession of framing everything as a pro/con gun regulation argument. We know sane regulation of

        • I just knew this whole thing could be blamed on America somehow. Thanks, internet commenter!

    • It is interesting watching them put out a cryptocurrency, which is in the planning stages later in two months. Like Germany's currency reform, it has possibilities in becoming the replacement of the petrodollar, because it is essentially hackproof and immune to things like QA.

      My understanding is that the petrodollar is the practise of pricing Oil in USD in order to keep it the price stable (and simplify the actual calculation of the exchange rate).

      As a national currency it's problematic since even a huge oil exporter doesn't have an economy that scales directly with the price of oil, not that they're much better managing a real currency.

      And do you really trust the Venezuelan government to honour the promise of 1 Petro for 1 barrel? The true exchange rate [huffingtonpost.com] is likely to be lower, w

      • > Venezuela's problem isn't "socialism", it's utterly corrupt and incompetent governance, socialism is just the form in which the politicians choose to express themselves.

        Socialism is a system in which the government controls business. In folk songs, "the people" is used as a euphemism for government, but of course each individual person doesn't vote on all business decisions, the government, the politicians, have the power.

        Power corrupts. Absolute power corrupts absolutely. Themistocles knew that 2,500

        • Wealth an power are the problem in any economic system. Their accumulation should be measured and treated as the threat they potentially are to society.

          • > Wealth an power are the problem in any economic system.

            Concentrations of power tend to be associated with corruption. So that needs to be managed. The founding fathers used several mechanisms, such as spreading the majority of power between the 50 states, and dividing the federal power between three branches of government which each maintain their own power by keeping the others in check. We have perhaps screwed up by ignoring Article 1 and the 10th amendment, which restrict the federal government t

            • You said "wealth and power are the problem in any economic system". Wealth is the GOAL of an economic system

              DISTRIBUTION is the GOAL of an economic system. How do we distribute limited resources in the most useful manner. Some economic systems encourage the accumulation of wealth as a goal (capitalism). Others try to encourage the sharing of wealth (socialism). The sweet spot is no doubt somewhere in between.

              • It is a very bad economic system indeed that only slices up the pie, and pays no attention to how big the pie can be.

                > Some economic systems encourage the accumulation of wealth as a goal (capitalism). Others try to encourage the sharing of wealth (socialism).

                Capitalism, the definition, is:
                Those who invest their savings into business capital (machines, factories) reap commensurate reward.

                Socialism is "everybody owns the factories, whether or not the do anything to help create them".

                The goal of capitalis

                • Firstly, you're mistaking your biases for facts. Secondly, you're mistaking the CHARACTERISTICS of economic systems for their GOALS. The GOAL of any economic system is the distribution of scarce resources. Everything else is gravy.

                  Its pretty clear that you hate 'socialism' (which I can understand since you've no doubt had that propaganda pummeled into you your whole life), but that was not my argument. My argument is simply that WEALTH (assuming - accumulation of/constant growth of) is not ipso facto the g

                  • The proponent of socialism is obliged to argue that the goal must only be the equal distribution of goods, because even a first-year student can show that the system is very much not optimal for the production of goods (for people having stuff) or the allocation of inputs (efficient use of resources). Therefore the socialist must argue that having things we need is not a legitimate goal, that seeking to maximize the production of goods and services is illegitimate.

                    However, the first-year economics student

                    • You're just creating strawmen and false dichotomies. 'Proponents of socialism are obliged...blah blah blah...North Korea' (you missed out Venezuela, Cuba and the USSR for the full set). But I'm not obliged to do that at all. As I said in my first post, the answer is probably somewhere in the middle. A completely unregulated capitalist economy has no concern for those left behind, because if you're not creating or consuming you're irrelevant. A completely planned economy has the flaws you describe. Now I won

                    • So what, then, do you propose as the goal? What's your optimality condition?

                      We've shown that if equal distribution is the goal, that can be perfectly achieved by destroying all input resources and producing no good or services. So if you stick to that as the goal, socialism, and indeed any system, is strictly inferior to destruction.

                      Btw, you don't distribute resources. Resources are the inputs to production. You distribute the outputs.

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      A few thousand deaths for any reason is inconsequential in a population of +370,000,000. For those close to those killed it is devastating but that is still a very tiny amount of people when compared against the entire population of a country and the world. Even with all the killing and destruction currently raging non-stop across the planet the number of humans on the planet continues to grow. The one constant throughout the history of human civilization has been the human propensity to use violence and ma

    • Comment removed based on user account deletion

  • Oil backing not needed. (Score:3)

    by Ecuador ( 740021 ) on Tuesday February 20, 2018 @07:40PM (#56160599) Homepage

    Meh, oil backing is overkill. Bitcoin is doing great backed just by thin air. ICO FTW!

    (Yes, I am pissed for not thinking about it first. I'd at least make up for the cost of the extra guest at the London Embassy...)

    • Well, it's all the same anyway. What they don't advertise is that the oil that "backs" the currency is oil that's...still in the ground.

    • Re: (Score:2)

      by JcMorin ( 930466 )
      Bitcoin cannot be mined at will, there are rules that make it very hard. This is the "backing". Those Petro dollars are NOT MINED, it's gov centralized entity that decides how many there is. They will flood the network with newly created Petro coin as they always did. The only reason Bitcoin works is because nobody controlled it; because of it's mining process.

    • Re: (Score:1)

      by Anonymous Coward

      What socialism? This is classic oligarch-ism that has to pretend to be anything except what it is in order to exploit the masses.

      Also see West Virginia, Alabama, Texas, Russia, Trump University and North Korea.

       

  • No dollars for oil? (Score:3)

    by known_coward_69 ( 4151743 ) on Tuesday February 20, 2018 @07:41PM (#56160615)

    Freedom via the USA coming next month. 82nd Airborne a carrier air group and the air force along with a Marine Brigade

    • It would be better for the US for the US to stay out of it. The world needs a shining beacon of what happens when people vote for a Marxist utopia. No take-backs!

  • If you amass enough Venezuelan oil coin (Score:1)

    by Anonymous Coward

    This [flickr.com] is what you can redeem it for.

  • WRONG (Score:3)

    by XSportSeeker ( 4641865 ) on Tuesday February 20, 2018 @07:46PM (#56160657)

    This isn't being backed by oil, it's being backed by Maduro, a compulsive liar prototype dictator that has fallen back on his promises over and over and over again. It's the guy who seized a whole lot of private foreign assets.
    You'll be safer putting your money on practically anything else.

    • Great way to put it.

      He's basically trying to sell shares in an industry his government forcibly privatized a couple of decades ago. What makes you think he's going to actually trade a barrel of oil for a Petro? All he has to say is "no" and you have zero recourse when trying to collect... What are you going to do, show up at a port with a barrel and demand he fill it? And you think he will?

    • Re: (Score:2)

      by Uberbah ( 647458 )

      Whoa, triggered imperialist capitalist is triggered.

      by Maduro, a compulsive liar prototype dictator

      If he was a dictator there wouldn't be an opposition party. You want an actual dictatorship, look to your imperialist capitalist buddies in Saudi Arabia and other Gulf coast monarchies.

      • Re: (Score:2)

        by gtall ( 79522 )

        Really? So where are the fair and open elections now that most of the opposition has been "disqualified"?

        And pulling out the straw man of "Well, your buddies in Saudi Arabia". They too ought to be first of up against the wall when the Revolution comes. Unfortunately, when it came for Russia, China, Cuba, etc., it wasn't only the guilty ones that got machine gunned, it was anyone the new dictators didn't like.

  • The Clowns are getting desperate (Score:5, Insightful)

    by bobbied ( 2522392 ) on Tuesday February 20, 2018 @07:47PM (#56160667)

    Crypto currency backed by Venezuelan oil? You mean you want to privatize that industry your government took over for a profit?

    So if I want to trade my Petro for a barrel of crude is it FOB origin, shipping point or FOB destination shipping paid? My guess is it's like the Gold Standard used to be.... Forget trying to cash in.

    • Re: (Score:2)

      by mccrew ( 62494 )
      You beat me to the punch. Was going to say that you can smell the desperation all the way up here.

    • Most of the world is traded in US dollars, which is the only thing that fuels your $1.4+ trillion annual war budget and maintains your 20+ trillion in debt. Once that bubble pops....you're fucked. Who's gonna be the clown then?

  • Or, more to the point, South Sea shares in baleen whale futures

  • Even if there are enough gullible investors to make the ICO a success for the bankrupt regime of Maduro: Foreign agencies that will not miss the opportunity to steal whatever crypto-currencies are accumulated. Given that Venezuela has no computer hardware they could trust not to be back-doored, this is just too easy not to be done.

  • Only because they're broke... (Score:1)

    by Anonymous Coward

    Venezuela is only getting trying to get into Crypto currencies because they're totally and completely broke because of corruption, mismanagement and trying to implement a failed "socialist" economy, which isn't even socialist at all, they're just plain fascist. The Venezuelan government is "lead" by a bus driver, Maduro, who only wants to stay in power with all the "Chavistas" goons so they can keep all the money and power they're accumulated for almost 20 years since Chavez got into power in 1999.

    The only

  • Can someone reminds me why US did cast financial sanctions against Venezuela?

    It may have to do with Obama's executive order calling Venezuela a US national security threat, but I am not sure I recall why it was a threat.

  • This is a crude idea.

  • Venezuela's crypto-currency is no more of a crap shoot than the stock market, if you're just one of the little fish devoured by the thousands every day by predators like Goldman Sachs.

  • How do you mine this thing? Do you need a true to the word Mining Rig (TM) and go on location?

    Draw one barrel of oil out of the ground, the state takes it and gives you one Petro in exchange. Then the Petro is backed by thin air and popular confidence like any fiat currency, except it's on a blockchain and you can see when the government printer is working really hard.

    Now... getting currency issued when you produce a thing and put it on the market is something on the back of my mind (but how do you value st

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