Current Affairs

Venezuela Launched Oil-backed Cryptocurrency

Venezuela has launched its own cryptocurrency called Petro.

Venezuela Launched Oil-backed Cryptocurrency

  • The decision is taken to avoid US-led financial sanctions. 
  • Petro will be backed by the country’s vast natural resource reserves.
  • Its value will be pegged to country’s vast reserves of oil and gas as well as its mineral wealth, including gold.
  • Venezuelan President Nicolas Maduro has approved the creation of BlockchainBase observatory to oversee development and rollout of new cryptocurrency.
  • Venezuela has world’s largest proven reserves of crude oil but it is struggling against a plunge in oil prices which began in 2014. 

What is Crypto Currency?

  • Crypto Currencies or Virtual Currencies are type of unregulated digital money.
  • It is neither issued by central bank/public authority, nor is necessarily attached to fiat currency
  • Cryptocurrencies are founded as peer-to-peer (P2P) electronic payment system. 
  • They enable transfer of money between parties, without going through banking system. 
  • They can be transferred directly between peers and the transactions are confirmed in a public ledger, accessible to all the users.
  • The process of maintaining this ledger and validating the transactions is known as mining and is carried out in a decentralised manner.
  • Bitcoin, created in 2009, was the first decentralized cryptocurrency.
  • Since then, numerous cryptocurrencies have been created.These are frequently called altcoins, as a blend of bitcoin alternative

Venezuela Launched Oil-backed Cryptocurrency Venezuela Launched Oil-backed Cryptocurrency Reviewed by Admin on December 05, 2017 Rating: 5

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