Venezuela has been in a hyperinflation, causing the price of basic goods to soar. The rate of inflation is expected to be up to 1,600%. Many residents have turned to Bitcoin mining as a solution to the money crisis.

Bitcoin mining involves using computer hardware that solves mathematical equations and creates a link for the currency. The bitcoins trade between the conventional currency to create a market for non-miners and a way for those who are miners to cash out. The bitcoin blockchain creates a link and rewards the bitcoin users with their money. To do a bitcoin transfer, the miner must use certain websites and applications on phones, for example, Venmo, to do so.

The digital currency is more affordable due to the cheap electricity in Venezuela. As a result, miners make up to $500 per month with bitcoins. The $500 gives citizens the ability to purchase more goods. Some of these goods include diapers and insulin. This amount is substantial to most households in Venezuela. To put the money crisis in perspective, the average lunch costs 200,000 Bolivars that equals to $8-$10 US dollars, according to Panam Post.

The cryptocurrency is common in Venezuela now. Residents from professors to shopkeepers buy and sell with the online exchange. It is also common for non-miners to use.

Although bitcoins help those in Venezuela, authorities have taken action to take the currency down. Maduro calls on those who profit from the economic crisis by saying they’re “capitalist parasites.” There are no laws banning or promoting the currency, but that is not stopping them. Authorities have been tackling the cryptocurrency operations by arresting miners on spurious charges. Joel Padron owns a courier service and began mining to improve his income. He is the first to have charges under energy theft and possession of contraband. These charges caused him to be detained for 14 weeks. Not only are bitcoin users put under arrest, but corrupt police officers use them for their own profit.

All the arrests have not made the currency lose relevance, though. The founder of BlinkTrade, Rodrigo Souza claims people have not stopped mining.

Many miners are continuing with the cryptocurrency ether (ETH). This new system increases the profits and the risk is lower. Both bitcoin and ETH have the same principle, but ETH is more affordable. All ETH miners need is a no-cost software and a PC with a video card. As a result, police officers believe that the ETH miners are just regular computers. This is how the risk is lowered.

The fact that Venezuela residents have turned to a new system for economic relief does open many eyes to how high inflation really is. Cryptocurrency is benefiting citizens in this time of need and continue to dominate Venezuela currency.

Lemon Wire