The Consequences of Bitcoin Mining in Venezuela: Extortion and Theft

As the economy of Venezuela continues to experience catastrophic collapse, a growing segment of Venezuelans are turning to Bitcoin mining—and are paying the price for it, too.

Per a breaking report from Agence-France Presse (AFP), Bitcoin miners in the Latin American nation are experiencing high levels of police targeting and arrests for “energy theft.”

Indeed, the societal situation there is so desperate that AFP journalist Alex Vasquez has even uncovered incidents of wanton police extortion against Venezuelan Bitcoin miners, whose operations are currently legal—or, more accurately, completely unregulated—in the nation.

As Vasquez notes, Bitcoin has become increasingly popular in the former international petrol powerhouse because the bolivar—the Venezuelan national currency—has utterly collapsed in recent months thanks to crippling inflation rates and negative GDP growth.

These Bitcoiners are being punished, then, for trying to make ends meet at a time when the Venezeulan government has comprehensively failed their responsibilities to the people.

Per Vasquez:

“Practiced worldwide, Bitcoin mining is part of a growing, underground effort in Venezuela to escape the worst effects of a crippling economic, political crisis and runaway inflation.”

More than 100,000 Citizens of Venezuela are mining #bitcoin to escape inflation, with some earning around $800 a month. $BTC #Cryptocurrency pic.twitter.com/DhAuHLiXtk — Blockchainlife (@Blockchainlife) October 24, 2017

Current informal estimates place there as being approximately 100,000 Bitcoin miners operating in Venezuela today. It’s a small segment of the overall population, to be sure, but a segment that literally relies on Bitcoin to put food on the table.

One anonymous miner that Vasquez consorted with estimates Venezuelan Bitcoin miners rake in the equivalent of $800 dollars per month on average from their mining activities, an economic lifeline that makes all the difference when it takes 26 million bolivars to equal the same amount.

Sadly, police in the nation, who are themselves existentially desperate, use their authority to cheat these self-starting crypto miners out of their hard work. As we’ve already seen this week, crypto takes on exponential value during societal crises.

This unfortunate dynamic will sure continue so long as Venezuela’s economy remains in shambles.









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