The recent nationwide power blackout in Venezuela has hurt oil production, which may impact the Petro, but Bitcoin was still up and running.

Every few weeks seems to bring another spate of news about how conditions in Venezuela have spiraled down to a new low. Not that long ago, a video surfaced showing people scrounging through a garbage truck in search of food. The once prosperous country has been suffering hyperinflation for years due to the ongoing socialist policies of the national government. A recent nationwide power blackout highlighted some of the issues facing the country, but an interesting twist to the blackout was that the Bitcoin network remained up and running.

Venezuela Suffers Massive Power Blackout

The suffering of the Venezuelan people continues unabated. Earlier this month, a massive blackout hit the country. Reports say that a full 70 percent of the country was without power. It’s insane to think that a developed country could suffer such an incident, but such is life in the Venezuela of today.

The power outage impacted both private companies and state-run agencies and firms. Power has now been largely restored, but the overall economic impact has been significant. The International Energy Agency (IEA) opined:

The electricity crisis in Venezuela has paralyzed most of the country for significant periods of time. Although there are signs that the situation is improving, the degradation of the power system is such that we cannot be sure if the fixes are durable.

Yet a Reddit user reports that the Bitcoin network was still up and running during the power outage. He wrote:

My whole country didn’t had electricity, all banks were down. Bitcoin was still up.

When someone chided him by saying that using Bitcoin requires electricity, he replied that the banking networks (with its debit and credit cards) were down but that the Bitcoin network was still up.

This makes perfect sense as people with cell phones can access exchanges and cryptocurrency wallets even if there’s no power as long as they can get a signal. An exchange based in the country would go down if the power was out, but Venezuela is not a hotbed for crypto exchange hosting. The Reddit user also noted that people were using gas generators to provide some power, which would enable phone recharging.

Another point that the Reddit user made was that Bitcoin continues to grow in popularity among the people. As the country suffers from an inflation rate of 2.3 million percent (!!!!), it makes sense for people to turn to cryptocurrency to maintain as much economic value that they can with what little they currently possess.

Oil Production Hurt by the Power Outage

Another consequence of the power blackout that is not being talked about much is the reduction in oil production as it relates to cryptocurrency. The power outage “seriously disrupted” oil production, which had long been on a downward trend. When Hugo Chavez took power in 1998, the country was pumping out 3.2 million barrels of oil a day. That figure has now dropped to under one million barrels per day.

The state controls oil production through its Petroleum of Venezuela (PDSVA) company, which was taken over by the military and is now run by Chavista General Manuel Quevedo. However, Quevedo has no experience in the field, and his running of the company has caused many workers to seek their fortunes elsewhere. This shortage of experienced labor is also impacting oil production.

Last year, Venezuela introduced the Petro, a national cryptocurrency based upon oil. The crypto was designed to circumvent U.S.-based economic sanctions, and the government is forcibly making the population accept it. As oil production is cratering due to power outages, labor shortages, and the basic economic policies of the Venezuelan government, one would think the Petro would eventually be affected. How this will impact the ongoing chaos currently underway in Venezuela is anybody’s guess, but the most likely outcome will not be good.

Do you think the Petro will be negatively impacted by the drop in oil production due to the recent power blackout in Venezuela? Let us know in the comments below.

Images courtesy of YouTube/Univision Noticias and Pixabay.