Venezuela has launched its own cryptocurrency called Petro.
- 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
