Bitcoin Mining Thrives in Venezuela Thanks to Hyperinflation and Free Electricity
Hyperinflation and virtually free electricity in Venezuela has led to an increase in Bitcoin mining operations.
Venezuela is home to one of the world’s worst cases of hyperinflation since the Weimar Republic. For example, a McDonald’s Big Mac there now costs half a month’s salary. The country’s annual inflation rate has surged to 1,600 percent, The Atlantic reports.
This might not be an ideal situation to live in. As the high percentage of inflation continues to soar annually, citizens do not enjoy time queuing for lines with empty shelves, nor piling stacks of bills in front of the store’s cashier.
Turning to cryptocurrency mining for survival
Venezuelans have found a better alternative to escape hyperinflation. They’ve taken Bitcoin as an alternative, and mining Bitcoin has become big in the country.
To further utilize the cryptocurrency, data-crunching power is implemented to earn more Bitcoin. People utilize digital equipment such as specialized computers, with Bitcoin miners helping the cryptocurrency market to hit its record high in 2016.
Virtually free electricity powers cryptocurrency miners
With few utilities that its citizens can still afford, electricity happens to be among them. In fact, electricity power in the country is hugely subsidized and virtually free. This is all thanks to President Nicolas Maduro of the socialist regime.
Such a setup created an opportunity for struggling citizens, as Bitcoin miners can run many transactions and earn at least $500 a month. This can feed a family and provide them their basic needs – goods, medications, and such.
However, miners can highly influence inflation, too. These so-called miners are becoming the government’s “capitalist parasites”, since Bitcoin is still not legally regulated in the country, leading to some miners getting arrested for stealing free electricity.
Such a crackdown on Bitcoin mining, however, didn’t stop miners, with some turning to Ethereum and Dash mining instead, showing no signs of slowing down.