Breaking Bitcoin News

1 BTC = 1 BTC

Latest Article ↗️

Breaking Bitcoin News

1 BTC = 1 BTC

Latest Article ↗️

Venezuela Turns to Bitcoin Mining as Hyperinflation Reaches 18,000%

written by

Venezuela Turns to Bitcoin Mining as Hyperinflation Reaches 18,000%

Support free journalists: > send a tip

Venezuelans are increasingly turning to Bitcoin mining in order to combat hyperinflation in the South American country, Bloomberg reports.

Caracas has recently become a crypto mining hub, says Daniel Cancel, a reporter and resident, in a report from the capital. Cancel talks of a friend living in the city buying a machine to mine crypto and telling his son to run it round the clock. The result; USD 6 a day. The reporter tells of another friend who had to move his machine due to noise complaints. The most successful, Cancel reports, is a friend that has invested with his family purchasing three machines and is now clearing USD 1,000 a month, which in Caracas is a “small fortune”, he says.

So why are residents of Caracas going to these lengths to provide themselves with any kind of an income?

Under its controversial president, Nicolas Maduro, the country continues to struggle with a hyperinflation rate estimated at 2,400% at the end of 2017, which has skyrocketed to 18,000% in 2018. The crumbling economy is now causing a humanitarian crisis with 600,000 Venezuelans fleeing to neighboring Columbia alone.

Venezuela’s crisis has steadily worsened as a result of lower oil prices, corruption, and a totally mismanaged socialist system, experiencing all but a total collapse of the economy, public services, security, and healthcare, writes the Independent.

Armed gangs and Colombian guerrilla roam the beleaguered nation’s borders. Pro-government militias are terrorizing urban areas, while police stand accused of extrajudicial killings in a country which has now the dubious notoriety of being home to 10 of the world’s most dangerous cities, according to Igarape Institute, a Brazilian think tank which studies violence.

Bitcoin is now recognized as the only way of getting around the country’s currency controls, and bitcoin mining offers Venezuelans a chance to pay for good imported from overseas. Although the process is not sanctioned for individuals other than going through ‘official’ methods, residents are able to sidestep the government controls to buy foodstuffs from Florida and Miami by trading Bitcoin for bolivars, the local hyperinflated currency.

Cancel suggests that even the USD 6 a day his friend was mining is half decent money in the depression hit country, commenting:

“One key to my mining pals’ success: electricity, while spotty, is basically free, the result of an odd combination of hyperinflation and government-mandated utility price freezes. (It’ll cost you 900,000 bolivars—or about USD 0.90 at the black-market rate—for a coffee, pastry, and juice at a cafe, but you can pay your monthly electricity, water, gas, internet and phone bills for about 300,000 bolivars.).”

Cancel maintains that for those residents who haven’t yet fled the borders to Columbia, its all about managing “somehow” to set up a steady flow of revenue in dollars or another foreign currency. “Human beings can adapt to anything” is a line he keeps hearing as his friends continue the daily struggle of life in Caracas.

 

Follow BitcoinNews.com on Twitter at https://twitter.com/bitcoinnewscom

Telegram Alerts from BitcoinNews.com at https://t.me/bconews

Help spread this article :)

BitcoinNews.com is NOT INVESTMENT ADVICE

Opinions expressed are entirely their own and do not necessarily reflect those of BitcoinNews.com

For informational purposes only. Individuals and entities should not construe any information on this site as investment, financial, legal, tax, accounting or other advice. Information provided does not constitute a recommendation or endorsement by BitcoinNews.com to buy or sell bitcoin, cryptocurrencies or other financial instruments. Forecasts are inherently limited and cannot be relied upon. Do your own research and consult a professional advisor. The opinion of authors do not reflect those of BitcoinNews.com 

   Advertisement

Read More Bitcoin News

   Advertisement