4 ms·

> They need to back to something Like, say, backed by international oil market?

NullPrefix 8y ago
Petro (cryptocurrency) is backed by Venezuela's oil market, not international oil market.
A2017U1 8y ago
If I buy some of their petrodollar cryptocurrency what is the mechanism which I can redeem it for oil? If I'm willing to pay shipping will they send me a barrel?
- mhotchen 8y ago
  I mean in theory there are a lot of people who trade in oil or precious metals who aren't interested in actually acquiring the resource physically. There are plenty of people that are looking to arbitrage that don't necessarily want the raw resource. The same goes for the FX market. You're right in asking if you can even get it though. I don't actually have the answer to your questions. I'm sure this is just a story, but it's relevant to your comment: https://thedailywtf.com/articles/Special-Delivery https://thedailywtf.com/articles/Special-Delivery Also note: I don't disagree with you, there's no way I'd be touching a pretrodollar.
  - MBCook 8y ago
    There was an episode of Planet Money in the last few years where they bought a commodity and then tried to go collect it. Can’t remeber if it was oil or corn or what.
jerf 8y ago
Agreeing with others, I don't particularly trust Venezuela's own cryptocurrency to be an adequate backing for Venezuela's currency. There's still circularity there. But I'd also add that there's more to backing that just saying "And this currency is backed by that." Go ahead; try it. Scribble some badlogninagain bucks down on some paper and try to get people to accept them for goods and services instead of dollars. When they complain, tell them that your badloginagain-bucks are backed by US dollars and see if that satisfies them. It shouldn't. For badloginagain-bucks to be backed by dollars, you need to be able to produce dollars in exchange for them. That's what a backing is; something you can always exchange the currency for. Exchanging dollars for people not busting down your door and taking your stuff is certainly more abstract that exchanging it for silver, but it seems to be functional. Exchanging Venezuelan currency for Venezuelan cryptocurrency doesn't seem to be making progress. At this point my faith and credence in that government is quite rationally zero that they won't screw with something under their control, which is, you may note, concretely backed by the rest of the world by the fact that the only assets in the world worth anything are also all the assets not under their control. I'll believe it's pegged to international oil markets when it's actually stabilized the currency and people have demonstrated the ability to convert the newest bolivars into oil concretely at will.
- nostrademons 8y ago
  It worked for Tether. /s

Petro (cryptocurrency) is backed by Venezuela's oil market, not international oil market.

A2017U1 8y ago

If I buy some of their petrodollar cryptocurrency what is the mechanism which I can redeem it for oil? If I'm willing to pay shipping will they send me a barrel?

mhotchen 8y ago
I mean in theory there are a lot of people who trade in oil or precious metals who aren't interested in actually acquiring the resource physically. There are plenty of people that are looking to arbitrage that don't necessarily want the raw resource. The same goes for the FX market. You're right in asking if you can even get it though. I don't actually have the answer to your questions. I'm sure this is just a story, but it's relevant to your comment: https://thedailywtf.com/articles/Special-Delivery https://thedailywtf.com/articles/Special-Delivery Also note: I don't disagree with you, there's no way I'd be touching a pretrodollar.
- MBCook 8y ago
  There was an episode of Planet Money in the last few years where they bought a commodity and then tried to go collect it. Can’t remeber if it was oil or corn or what.

jerf 8y ago

Agreeing with others, I don't particularly trust Venezuela's own cryptocurrency to be an adequate backing for Venezuela's currency. There's still circularity there. But I'd also add that there's more to backing that just saying "And this currency is backed by that." Go ahead; try it. Scribble some badlogninagain bucks down on some paper and try to get people to accept them for goods and services instead of dollars. When they complain, tell them that your badloginagain-bucks are backed by US dollars and see if that satisfies them. It shouldn't. For badloginagain-bucks to be backed by dollars, you need to be able to produce dollars in exchange for them. That's what a backing is; something you can always exchange the currency for. Exchanging dollars for people not busting down your door and taking your stuff is certainly more abstract that exchanging it for silver, but it seems to be functional. Exchanging Venezuelan currency for Venezuelan cryptocurrency doesn't seem to be making progress. At this point my faith and credence in that government is quite rationally zero that they won't screw with something under their control, which is, you may note, concretely backed by the rest of the world by the fact that the only assets in the world worth anything are also all the assets not under their control. I'll believe it's pegged to international oil markets when it's actually stabilized the currency and people have demonstrated the ability to convert the newest bolivars into oil concretely at will.

nostrademons 8y ago
It worked for Tether. /s