Venezuela has just taken drastic and unprecedented steps to stabilize its currency as it grapples with hyperinflation and other economic issues. The country’s currency has not only been massively devalued and renamed, but is now tied to a state-issued cryptocurrency called the Petro, which itself fluctuates based on oil prices. Hardly anyone knows what to expect out of this. The Petro is not new; it arrived earlier this year in the form of a stepped offering to private and then public buyers, raising more than $3 billion from foreign governments and presumably some private buyers. President Trump forbade the U.S. from taking part. It is supposed to be a liquid asset reflective of the price of oil, and there is of course a whitepaper that describes the system in broad strokes, though it lacks almost any real technical detail. But the country’s own national assembly called the state-issued cryptocurrency unconstitutional, blockchain industry experts have called it a scam and there are Russian machinations to consider as well. Bloomberg has a good roundup of official communications about the token. The scheme originated in the administration of Venezuelan President Nicolas Maduro and seems to be an attempt to lend some credibility and stability to the country’s currency. The strong bolivar, which has lost more than 90 percent of its value over the last decade, has been renamed the sovereign bolivar and artificially returned to pre-inflation values. In practical terms that means a loaf of bread that cost 100 bolivars in 2012 and 100,000 last week will now, theoretically, cost around 100 again. Whether that will actually happen — the black market rates are probably more influential — is anyone’s guess. In case it isn’t clear, I’m not an economist and don’t plan to become one. But this is an historic moment in the blockchain world in that it is the first time an official fiat currency has been pegged to a state-run cryptocurrency. That makes it of interest to the international community for many reasons, although obviously this is far from the ideal method by which one might want to demonstrate such a system. Although this whole situation is nominally of interest, it seems unlikely to benefit the people on the ground in Venezuela who have no use for oil-based cryptocurrencies and just want to buy some bottled water, a package of diapers and a train ticket out of the country. How this all plays out will no doubt be instructive, but let’s not lose sight of the humanitarian crisis playing out on the streets. Here as elsewhere, donations can help. Read More Venezuela ties its currency to a state-run cryptocoin : https://ift.tt/2MmoxjTPartner By desimpul.blogspot.com The materials on Desimpul's website are provided on an 'as is' basis. Desimpul makes no warranties, expressed or implied, and hereby disclaims and negates all other warranties including, without limitation, implied warranties or conditions of merchantability, fitness for a particular purpose, or non-infringement of intellectual property or other violation of rights. Further, Desimpul does not warrant or make any representations concerning the accuracy, likely results, or reliability of the use of the materials on its website or otherwise relating to such materials or on any sites linked to this site. In no event shall Desimpul or its suppliers be liable for any damages (including, without limitation, damages for loss of data or profit, or due to business interruption) arising out of the use or inability to use the materials on Desimpul's website, even if Desimpul or a Desimpul authorized representative has been notified orally or in writing of the possibility of such damage. Because some jurisdictions do not allow limitations on implied warranties, or limitations of liability for consequential or incidental damages, these limitations may not apply to you. Accuracy of materials The materials appearing on Desimpul's website could include technical, typographical, or photographic errors. Desimpul does not warrant that any of the materials on its website are accurate, complete or current. Desimpul may make changes to the materials contained on its website at any time without notice. However Desimpul does not make any commitment to update the materials. Links Desimpul has not reviewed all of the sites linked to its website and is not responsible for the contents of any such linked site. The inclusion of any link does not imply endorsement by Desimpul of the site. Use of any such linked website is at the user's own risk. Modifications Desimpul may revise these terms of service for its website at any time without notice. By using this website you are agreeing to be bound by the then current version of these terms of service.
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