The country of Venezuela has seen better days. When oil was trading for $100, there was money for the government’s vast social programs; then the price of oil collapsed, causing chaos in the South American country. Right now, the annual inflation rate is around 1,600 percent, making paper money almost worthless just a month after it has been printed.
Nevertheless, President Nicolas Maduro is still trying to make some things affordable to the general public, electricity being one of them. And you know who likes hugely subsidized, low-cost electricity? Cryptocurrency miners!
Cryptocurrency mining is booming in Venezuela
Tech savvy individuals in the country have found a way to put that virtually free electricity to good use — they mine for cryptocurrencies like there is no tomorrow.
At first, most of them were mining bitcoins, helping the market hit its record high in 2016. Later on, some of them turned their attention to other cryptocurrencies, including Ethereum and Dash.
But… From time to time the country’s energy company takes note of consumption surges and then the chaos begins for miners. They have been labeled as “capitalist parasites,” with some of them being forced to change locations.
Because Venezuela has no cryptocurrency laws, police have arrested mine operators on spurious charges. Their first target, Joel Padrón, who owns a courier service, was charged with energy theft and possession of contraband and detained for 14 weeks. Since then, other bitcoin rigs have been seized, prompting many people to stop mining.
But not all, according to Rodrigo Souza, the founder of BlinkTrade, which runs SurBitcoin. “People haven’t stopped mining,” he said. “They’ve just gone deeper underground.”
Mining for better life
A person running several bitcoin miners can earn $500 a month, which is a small fortune in Venezuela these days, and definitely enough to feed a family of four and purchase vital goods.
According to The Atlantic report, professors and college students have mined bitcoin, and some rumors suggest politicians and police officers did the same. In fact, many people and local businesses will gladly take cryptocurrency over Venezuelan Bolivar, fully realizing that despite their intrinsic volatility, most cryptocurrencies will hold value better than their country’s (fiat) currency.
And so the game continues. On one hand, the government doesn’t want to provide subsidized electricity to miners, and on the other — miners just want to make a decent living in their own country…