TL;DR: Letters from Venezuela is an exclusive CoinSpice series, an inside look from a reporter on the ground, documenting the South American nation’s last stand among sanctions, political unrest, international condemnation and concern, economic collapse, and the specter of cryptocurrency possibly demonstrating its main use case. In this installment, we explain the new normal of continuous electricity power outages and their influence on cryptocurrency trading, and the evolution of government censorship on the internet.

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Outages Rise in Venezuela, Power Rationing

March 2019 was a dark month for the people of Venezuela, and by extension, for all economic activities happening in the country. And we mean dark in the purest form of the word: Venezuela faced at least 5 big outages across most of the country, leaving most regions without electricity for days at a time. The Westernmost state, Zulia, was one of the most affected, spending more than three days without any kind of electrical power.

The outages occurred on March 25, 28 and 29, at the same time, circa 8pm. These outages were supposedly caused by sabotage snipers firing at power installations. Opposition leaders have called out these explanations saying blackouts are the logical result of years of neglecting the national electric system and spending maintenance money for corruption and bribes. The narrative of President Nicolás Maduro is how “attacks” on the grid did caused serious damages, and so a rationing system has been established to save power by cutting it to some regions selectively during different times of the day.

Despite the first batch of planned power outages being advertised to last just three hours a day, in some regions there have been reports of even 20 days without electricity, hampering, of course, capabilities of the population to work and develop their normal daily routines. Payment systems have also shifted to physical money, mostly dollars, as the preferred currency being used without power or mobile connection. The local currency is far more difficult to get, with long lines to get cash in banks being the norm everyday.

Bitcoin Trading Impacted

All of this has had a negative effect on bitcoin trading, which had shown very good numbers before the power outages started in early March. From a rising trend, trading has been falling constantly during the month, according to numbers from Coin Dance, accounting for the total number of bitcoin traded on popular OTC exchanges such as Localbitcoins.

The last week of the month, Venezuelans only traded 1,456 bitcoin, down a full 200 from just the week before. However, it remains to be seen if this trend will continue during April, especially as markets registered a spike in prices.

However, a strange situation has occurred: the local currency maintained its value in front of the dollar, even with bitcoin rising. This could be attributed to several causes, but the important issue about this situation is that inflation is now priced in dollars — a new, shocking development whose effect has increased prices of goods and services already considered very expensive.

Censorship Among Chaos

Even with all this chaos, the Venezuelan government has not stopped censorsoring, using its role as owner of the most used ISP, CANTV, the national state telecom company. According to reports from NetBlocks, there has been disconnections and bans on key social networks like Periscope, and search engines Google and Bing.

Report: Network data shows YouTube, Periscope, Google apps and Bing were restricted by #Venezuela's state-run internet provider ABA CANTV for 3.5 hours during today's press conference by Juan Guaidó, while much of country remains offline #27Mar #KeepItOn⬇️https://t.co/gtXTd04eA1 pic.twitter.com/WOmmBFPrpz — NetBlocks.org (@netblocks) March 28, 2019

Censorship increased when opposition leader and interim president claimant, Juan Guaidó called for supporters to rally for its Operación Libertad (Operation Freedom) campaign. The internet ban lasted three hours and caused people to miss information about Guaidó’s plan. Despite this, people with other ISPs were able to listen to the message. NetBlocks concluded this behavior is consistent with other censorship attempts from the government, and can now be considered a pattern.

Crypto as a Refuge

Bitrefill, a popular cryptocurrency gift card and phone top-up site, decided to put their earnings aside and help Venezuelans by collecting just the face value of every phone top-up without any other fees. This helped Venezuelans previously unable to top-up their phones via regular networks.

Also, Dash Text, an SMS payment and transferring platform featuring the use of Dash as currency, donated 1,000 free refills for Venezuelans during blackouts, helping users stay connected and communicating with loved ones inside and outside the country. CoinText, a similar bitcoin cash based platform, hinted at testing its services in Venezuela but backpedaled publicly due to possible economic sanctions from the US.

Today we start refilling Venezuelan phones for free! we have enough to do 100 refills, if you want to contribute to help more Venezuelans communicate during the blackout, you can contribute here, each refill is about 1$ USD, we hope to get to 1000 refills. Let’s go! pic.twitter.com/cSdbHRPmD8 — Dash Text (@dash_text) March 13, 2019

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