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Cryptocurrency mining is seen as a way out of inflation in Venezuela

June 20, 2020

Venezuela is currently experiencing constant inflation and an economic crisis that has forced many families to look for other ways or methods to conserve economic resources. to be able to exist.

One of these resources is cryptocurrency mining activity, which Venezuelans are increasingly adopting mainly due to the low cost of electricity services. and because they use cryptocurrencies as a haven of value, given the rampant inflation the Caribbean nation is experiencing.

Keep in mind that mining consists of mathematical operations that check the validity of transactions in bitcoins (which can be another cryptocurrency) using powerful computers. The machines that practice it are rewarded with bitcoins that can be exchanged for dollars or other cryptocurrencies, depending on your preference.

Cryptocurrency mining is seen as a way out of inflation in VenezuelaCryptocurrency mining is seen as a way out of inflation in Venezuela

Despite the legalization of cryptocurrency mining in the country, there is still a lot of misinformation and it is not a prevailing concept. Venezuelans simply prefer to save in currencies such as the dollar or the euro.

Despite the legalization of mining, they report extortion

However, there are investors involved in this activity in Venezuela, and they agree that police officers arbitrarily approached them, confiscated their equipment, and even reported that they were often victims of extortion. from officials who require payment in return for the return of the equipment.

There are also isolated events in which officials are ignorant of intimidation or arrest of people who perform this activity.. Mining in Venezuela is not criminalized. There are various gazettes that recognize the work.

There are those who register with the National Superintendence of Cryptoactives, the competition agency. Risec can assist in the event of problems with officials acting outside the law. However, there are very few who do the registration, as most who participate in this activity distrust the national government.

Blackouts and blackouts affect mining in Venezuela

In addition, they report that they have been severely affected by the power outages and connectivity failures of the Internet service, severely damaging the activities that cryptocurrencies generate in the country.

As an alternative solution, it would be necessary to rely on alternative self-generation mechanisms to keep the business alive. However, as power plants, they encounter another limitation on Venezuelan territory: fuel, another of the many problems they have in Venezuela.

Under normal conditions, this would be a backup that could work effectively and completely normally. But as we mentioned earlier, the lack of fuel in the country is a total mess.

Now Aníbal Garrido is one of the traders interviewed by the Morocotacoin portal who said during the interview that blaming miners for the country’s power outages is a complete mistake.

He expressed that the mining activity is carried out mainly from the underground due to the associated risk figures. Especially with all the police persecution that many miners are exposed to.

Now, a mistake related to power failure culprit in this particular sector is considered. “What happens at the level of outages is not due to the” high consumption “that mining activities can generate, but to outages in the National Electric System distribution network.” Said Garrido.

To the surprise of many, the use and introduction of cryptocurrencies in Venezuela and especially Bitcoin has long been known. Since 2012, the first steps with BTC have been secretly taken in many forums and groups of the then most frequently used social networks by small groups of young visionaries who are familiar with new technologies.

Is Cryptocurrency Mining Profitable in Venezuela?

In Venezuela, electricity is subsidized in such a way that it is practically free of chargeHowever, it must be borne in mind that the equipment that is normally used for mining is equipment with great computing potential and, since it is mostly different equipment, consumes a very high amount of electricity.

The amount of money a miner can receive depends on the number of devices he has in operation, the number of algorithms solved and of course the value Bitcoin has at the time of the change.

In this sense, The trader said that it was absolutely profitable to do this practice. He saved that despite the poor service in energy supply in Venezuela, the main operating variable that determines profitability is precisely the payment of the electricity bill.

However, he pointed out that despite the benefits of the low cost of paying for electricity services, mining performance cannot be neglected or reduced.

Cryptojuris Venezuela has published an official gazette that deals with the legal risks of cryptocurrency mining

The local legal association Criptojuris Venezuela recently published a bulletin in its official blog that deals with the legal risks of cryptocurrency mining in Venezuela.

The text is intended to provide both small, medium, and large users who are involved in this activity with an answer and legal advice “to determine whether the activity they are performing meets the requirements of Venezuelan regulations,” the bulletin said.

The bulletin briefly discusses the rules that have been laid down in the fight against illegal digital money. The first to which it refers is the Organic Law Against Organized Crime and Terrorist Financing and, on the other hand, SUDEBAN Resolution 083-18, the body responsible for regulating the national banking system.

Finally, We can say that mining is one of the most profitable activities in Venezuela today considering the factors mentioned above. And not only that of Bitcoin, mining other types of cryptocurrencies would also generate enough money to meet demand and act as an alternative to the rampant inflation that surrounds all Venezuelans within the country.

Cryptocurrencies are a great opportunity in Venezuela and Latin American economies due to the economic instability that characterizes them.. This digital economy is responding to the increasingly interconnected globalized world, which increasingly requires immediacy.