The PetroDollar Coin and its Connection with the Price of Oil
Although there are now dozens of cryptocurrencies on the market, the PetroDollar coin stands out among them. Why is this? The PetroDollar (XPD) is the first digital money to be linked to the price of oil. As is customary in the case of oil trading, the coin always refers to the current price of a barrel of oil.
Despite this ingenious idea, the PetroDollar is currently an underdog in its asset class. The market capitalization is only $600,000, which is below average among cryptocurrencies.
The aim of the developers is to successively increase the market capitalization of this coin and thereby gain new layers of society. To achieve this, however, it first requires a serious internet presence, which it currently lacks.
After implementing this, it will be important to significantly increase marketing for the coin. People should know that cryptocurrencies are a great opportunity for everyone, whether a banker, investor, teacher or publican.
Returning to the link with the oil price: After the price per barrel has dropped for years due to fracking, experts are unanimous about the future of the oil – its price will increase once again. After all, as a fossil fuel, oil’s availability is limited. This is good for the future of the PetroDollar coin.
How Many Coins Should There be in Total?
In financial terms, little is as feared as much as inflation. This means that fewer goods can be bought with single units of currency. In other words, money is worth less than before. The reasons for inflation are complex and can have multiple causes.
It is often the case that the central bank simply throws too much money into the market. This can mean that there is insufficient demand and leads to inflation. Another reason might be that people lose confidence in the state behind the currency and consequently exchange their assets for other currencies.
The latter cannot happen in the case of this coin because it is not issued by a state. The developers have already prevented the first scenario in the design of the PetroDollar as they have limited the issue of coins to about 122 million pieces.
This already makes it clear how many units of this coin will be available in the future. This ensures a value stability that can not be achieved with traditional money. Most governments are not anxious about inflation because spending money rather than saving it should be encouraged for national growth. The euro has a targeted inflation rate of around 2 percent.
The PetroDollar Coin and the Concept of Blockchain
Like the pioneers of the crypto field (for example Litecoin and Bitcoin), the PetroDollar relies on the simple but ingenious concept of the blockchain. It is a digital chain that holds the information of all transfers of a cryptocurrency.
It is considered a replacement for centralized large servers and has been specially reworked for the PetroDollar coin. The developers of the coin promise that the blockchain is even more secure and can also be used for research purposes. Specifically, it always shows the current oil price and the CO2 balance of the various countries.
Users of the cryptocurrency can thus draw their own conclusions regarding the development of crude oil as well as the coin. Anyone can view the blockchain of the PetroDollar coin on request, leaving the identities of the users anonymous. In the meantime, the invention of blockchain is already being compared with that of the internet or mobile phones.
Ultimately, this process can also be used in quite a different way. It should be noted that cryptocurrencies are in many ways the future of payments. They offer their users high transparency, maximum security and potential for price gains.
What Potential Does the PetroDollar Coin Offer?
Cryptocurrency experts are largely unanimous: although it has been going on for quite some time, the boom in this asset class is far from over. In fact, only a tiny fraction of the population currently owns coins. If awareness of these currencies continues to increase, there is no doubt that this will have a positive impact on the price.
It can not be ruled out that many of the cryptocurrencies will rush from one high to the next. But what about the PetroDollar coin? Will this also increase significantly in the future? The fact is that nobody can say with absolute certainty. That would require a crystal ball! Basically, the chances are good because of the positive development of other coins. However, the following factors could possibly cause concern.
So far, the PetroDollar has only reached a market capitalization of about 600,000 US dollars. This either means that the coin is still too unknown or investors are suspicious of it. If the latter is the case, then the potential of the coin would probably not be too great.
Summary of the PetroDollar Coin
As an innovative cryptocurrency, the PetroDollar coin may provide a chance for high returns. Unlike most of its competitors, the PetroDollar, as the name suggests, is linked to the price of oil. As crude oil prices are forecasted to rise, the conditions for this coin are good.
On the other hand, the PetroDollar coin is still relatively small with around $600,000 market capital. Much will depend on the marketing strategy of the developers, not least the future of the coin.
Alexander Weipprecht is the managing partner of Provimedia GmbH. As a trained IT specialist for application development, he has been advising leading companies on the following topics for more than 10 years: online marketing, SEO and software. Cryptocurrency is becoming increasingly important to businesses and investors. Through Coin Report and Krypto Magazin Germany, Alexander wants to give all people easy access to the subject matter.