Blockchain Daily

Over 860,000 people sign up to mine Venezuela’s new cryptocurrency

Over 860,000 people sign up to mine Venezuela’s new cryptocurrency

Late last year plans were announced for Venezuela’s new cryptocurrency, called ‘the Petro’. Now, the regulatory department of the government ‘Superintendence of Cryptocurrencies and Related Activities’ has launched a registry by which the public can sign up to mine Petros.

Since it launched, over 860,000 people have signed up to be ‘mine farmers’ – the registry will remain open until 21st January. President Nicolas Maduro has backed the currency with 5 billion barrels of oil held in reserve in an effort to succour the value of the token. This oil will mean the Petro system will have a market capitalization of over $260 billion.

“This is going to allow us to move forward to new ways of international financing for the country’s economic and social development,” Maduro said.

Maduro released plans about this in early December amid the countries fiat currency falling off a cliff, as the country feels the effects of economic sanctions from the USA. Perhaps unsurprisingly, Russia has backed Venezuela and is supporting them by reducing the amount they need to pay back on their debts to the nation – incidentally, Russia is also planning their own cryptocurrency, but plans are at a much earlier stage than in Venezuala.

Is it a scam?

Critics, such as Gizmodo, have warned that the Petro is a giant scam. One reason for this that Petro has been described as a ‘pre-mined’. This means that a portion of the total amount of Petro will be available immediately, rather than being mined by working out complex mathematical calculations like Bitcoin and Ethereum.

And while being backed by billions of barrels of oil might sound good, that oil is already backing the countries fiat currency – which we’ve already learned is depreciating at a terrifying rate.

However, all these concerns doesn’t seem to have damped the interest by the population, almost a million of whom had signed up to the registry of Venezeuala’s new cryptocurrency as of yesterday. That number is likely to rise significantly before the deadline of 21st January. Whether this eagerness to register is driven by faith and confidence in the system or desperation by a population whose existing fiat currency has dropped significantly, leading to inflation of over 700% in 2017.