The Increasing Role of Bitcoin in Venezuela’s Crisis

Bitcoin and Blockchain have been the talk of the town all over the internet recently as both technologies are increasing global adoption.

There are even some countries that are likely to digitize their currencies and are planning to have their own token while others are making feasibility studies on how cryptocurrencies and Blockchain works. Large enterprises are also showing its interest in applying the principle of the Blockchain system.

As efficient as it can be, people are patronizing Bitcoin and other cryptocurrencies alike. It is used as a digital asset and payment in exchange for services or goods.

Many people worldwide have been using Bitcoin mostly for trading purposes. However, the case in Venezuela which is facing hyperinflation is way different among the other countries. The present status quo is making citizens of Venezuela to look beyond current options.

Hyperinflation

Hyperinflation as the effect of the recession last 2014, had made a significant impact to Venezuela. Today, the annual increase of goods more likely go up to 1600 in percentage, The Atlantic reports. The rise and popularity of Bitcoin as a digital coin made the Venezuelans turn to Bitcoin to withstand the poor living in their country.

Venezuelans on Bitcoin Mining

In the regime of Venezuelan President, Nicolas Maduro, the only thing that the people can afford is electricity which is nearly free. The people being resourceful, use Bitcoin mining to buy their necessities over the web. People are turning to Bitcoin as an alternative solution to make ends meet. According to Forbes, Bitcoin users grow from 450 wayback August 2014 to more than 85,000 in 2016.

How Bitcoin helps the Venezuelans?

The potency of Bitcoin is that it does not require a real bank account to transact instead people only need to have mobile phone or laptop and an internet connection. People can receive and transfer Bitcoin through a phone. Since electricity is almost free, Venezuelans mine Bitcoins too. However, when Maduro knew about the Bitcoin mining, he cracks down the activity and enforces the police to arrest the Bitcoin miners. Venezuela has no legal law upon cryptocurrency.

Many people quit bitcoin mining, but still, some people do through underground. In order not to track down by the police, miners did change to a new inflation buster called Ether. The way of mining Bitcoin and Ether are almost alike, but Ethereum mining is more affordable because it only requires a PC with a video card and free software.

As Bolivar gets worthless and Venezuelan government track down and arrests Bitcoin miners, many are still into the activity not stopping them for surviving each day.

Greg Robinson