The Economics of UroUro is a commodity-backed currency pegged to the value of 1 metric tonne of Urea.
Holders of 12,500 URO can swap them for a 12,500 metric tonne shipment of bulk Urea N46 fertilizer from participating merchants like GES, CTC, CCL and UTI. This is exactly the same as the Velocity Frequent Flyer Program, which permits holders to swap 125,000 Points for a 15,000 mile business class flight from participating merchants like Virgin, Etihad, Delta and Air NZ.
URO is as simple as that. This simplicity is what makes URO so powerful and elegant as a fast and efficient solution for purchasing Urea without waiting weeks and incurring massive fees to get traditional financial instruments issued by international banks.
Just like you can hold on to your Velocity Frequent Flyers Points until you are ready to redeem them for a flight, you can hold on to your URO until you need your Urea. Unlike Velocity Frequent Flyers Points however, URO units never expire. This allows you to buy URO when the cost is low, and exchange it for Urea when the price is high. In this way, farmers can hedge against the risk of not being able to afford fertiliser if Urea prices suddenly skyrocket, like they did in late 2008 from the $300 range to the $800 range.
URO is also a store of value, so you can freely exchange it to other currencies and spend without restriction. In the future, more traditional merchants will start accepting URO as a currency via payment processors or direct Uro network integration.
Uro Implementation: Neutrality, Decentralization and LegalityJust like the Velocity Frequent Flyer Program was initially spearheaded by Virgin back in 2005, Uro was created in collaboration with GES. Just like Virgin saw the need to neutralize and separate Velocity Rewards Pty Ltd by 2010 from VIrgin Blue in order to attract Etihad, Delta and Air NZ onto the same points platform, GES realised that to grow Uro to its maximum potential, a separate Uro Foundation was needed to attract other Urea sellers like UTI, CCL, CTC and many more to come.
The Uro Foundation’s implementation of Uro as an open platform, open source blockchain currency is a reflection of the purpose of Uro - which is to be the most widely adopted token for Urea trading internationally. The Foundation continues to develop an ever-expanding infrastructure around Uro so that this long term goal is achieved.
Because Uro is a long-term international payment settlement system, but also a commodity currency that will eventually see very high volume trading due to its pegged nature, we wanted a fully decentralized platform that is resistant to single-point vulnerabilities (like a single hash function being compromised) that also has the maximum safe transaction speed. This is why we choose a 3 minute block time and the multi-algorithm X11 proof-of-work system.
Finally, we have been criticised for not starting Uro with an IPO of the tokens at the reference pegged value. However, we have precisely chosen not to do this due to the possible legal issues revolving around securities issuance in various nations. In the same way that Velocity Frequent Flyers Points are released via “flying miles,” Uro is released via “mining power and time” by the network organically. We are simply adopting long standing legal precedents to provide a sound foundation for launching Uro. In summary, we did not go with Mastercoin or Counterparty as both require the Foundation to issue what may be classified in the future as “securities” or “investment contracts” at a defined price, which can open up the Uro Foundation to a range of possible legal ramifications.
For more, visit:
http://www.cryptoarticles.com/crypto-news/uro-interview-with-bohan-huang-32-questions-from-the-community
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