Pin It

Fear and Mining in Venezuela: Citizens Turn to Bitcoin to Survive

Fear and Mining in Venezuela: Citizens Turn to Bitcoin to Survive

The current situation in Venezuela is far from ideal. Economic uncertainty and political turmoil have led to protests. Many citizens can no longer afford food, medicine, and other basic goods.

Unemployment in Venezuela is expected to hit 25% by the end of the year. The Bolivar’s value is gradually becoming null as yearly inflation rate soars over 1600%. Carts full of notes are hauled into stores as the largest bill denomination gradually increases. Thankfully, an orange sun has risen over the country and was promptly adopted by many citizens: Bitcoin.

Venezuelan inflation

What makes Venezuela different?

Venezuela is a unique case. Despite its many economic troubles, electricity is nearly free, thanks to government subsidies. With the country’s instability coinciding with a spectacular boom in the cryptocurrency market, it’s no surprise that many Venezuelans have become Bitcoin miners in an effort to support their families. Bitcoin mining can generate up to $500 US a month, a sum large enough to feed a family of four and purchase vital goods like diapers.

Sadly, despite the absence of laws and regulations banning digital currencies, individuals are still getting arrested by law enforcement on spurious consumption charges. To circumvent these charges, some miners have opted to switch from Bitcoin to Ethereum and Zcash, two currencies that are easier to mine, but also easier to disguise. Regular desktop computers fitted with high-performance graphic cards can be used instead of dedicated mining machines for these cryptocurrencies.

By the people, for the people

Some investors, regulators and bankers still fail to see the value of Bitcoin and a blockchain – that is, a constantly updated and audited public ledger that contains the proof of cryptocurrency transactions. Nevertheless, the Venezuelan phenomenon comes as a strong confirmation of the original goal of Bitcoin: the ability to hold and transact currency without having to rely on trust in third parties.

Bitcoin’s use in Venezuela doesn’t stop at mining. Because of its anonymity, Bitcoin can be sent by anyone who wants to help Venezuelans in need. The digital currency can then be used to pay online retailers such as Amazon or other companies that deliver badly needed items to Venezuela.

Cryptocurrencies are seen as the superior choice by many tech-savvy citizens, not only because of the ability to mine some of them, but also because of decentralization: no single entity can control its value. This aspect makes them tools that are, in theory, perfectly reactive to the forces of the market, without any possibility of intervention from the government to manipulate price and availability.

Payza is closely following the development of Bitcoin and altcoins, and is committed to supporting all of the currencies and cryptocurrencies you are using. By using the Payza platform, you can buy, store, and sell Bitcoin and over 50 different altcoins right inside your Payza account. Are you interested in buying or selling Bitcoin? Check out our guide here: Buying and Selling Bitcoin.

For the latest updates and industry insights about Bitcoin and cryptocurrencies, be sure to subscribe to our blog and follow us on Facebook and Twitter.