As inflation is predicted to hit 1,600 % this year in Venezuela, its citizens are running into Bitcoin mining. The government is multiplying its efforts to avoid its citizens to keep mining Bitcoins.
In a country where the currency (Bolívar) loses its value every single day, is not possible to use cash anymore. A standard family only arrives to eat at the end of the month. Lets not talk about tooth paste or toilet paper rolls, they do not exist anymore in the country. If one is lucky enough to be able to earn a decent salary, it would be impossible to pay everything with cash.
How does mining in Venezuela looks like?
At the beginning of the year, one dollar was equal to 3,164 Bolivars, at the moment one dollar equals 41,152 Bolivars. How cannot a society that has such an inflation rate not to trust a virtual currency whose price will only grow in the future?
Because of this reason, Venezuelans are mining Bitcoins. With just some computer power and cheap electricity (this is not scarce in Venezuela), a person can mine some Bitcoins and exchange them in the supermarket for food.
Although Bitcoin, Cryptocurrencies, ICOs and mining are not forbidden in Venezuela, the main problem for people mining Bitcoin is the government. Nicolás Maduro, Venezuelan president, has declared a war against miners. Police is imprisoning Bitcoin miners that are accused of being involved in illegal activities like money laundering or criminal fundraising.
It is important to remember that Hezbollah has declared public support to Venezuela’s Vice-President Tareck El Aissami, reported the Panama Post. If this was not enough, western intelligence agencies accused the Vice-President of being involved in drug trafficking activities.
Rodrigo Souza, the founder of BlinkTrade a Venezuelan Bitcoin exchange, gave an interview to The Atlantic. “People haven’t stopped mining. They have just gone deeper underground”, he told.
Even though, there is a way in which Venezuelans avoid being captured by the police. “ETH mining is more affordable- all you need is free software and a PC with a video card. Any police officer is easily fooled into thinking your ETH miner is just a regular computer.”, he said.
Nicolas Maduro said that those who seek to make profit of the inflation crisis are “capitalist parasites.” But the truth is that people seeks to live with Bitcoin or Ethereum and not to make profit with them. Venezuela became a real example of the place where the famous cryptocurrency is not just a speculative investment. It is simply a means of payment and transaction.
At the beginning of the year, 240 Bitcoins were traded weekly. Bitcoin trading spiked in March to a not despicable 730 Bitcoins. At the moment, in Venezuela are traded more than 320 Bitcoins per week.
The use of the currency is growing in this South American country. The reasons are not merely for long term investments or oil investors turning into Bitcoin. The country is trying to survive and be freed from a tyrannous government that oppress the people.
Image courtesy of Pixabay.
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