Cryptomint mining seen as a way out of inflation in Venezuela

Posted by

Currently, Venezuela is experiencing a constant inflation and economic crisis that has forced many families to seek other forms or methods to obtain economic resources in order to survive.

One of these resources is the mining activity of Ethereum Code crypto-currencies, which is increasingly adopted by Venezuelans mainly because of the low cost of electricity service and because they use crypto-currencies as a refuge of value, in the face of a galloping inflation that the Caribbean nation is experiencing.

Let’s remember that mining consists of mathematical operations that verify the validity of transactions in bitcoins (it can be another crypto currency) by means of powerful computers. The machines that practice it are rewarded with bitcoins that can be exchanged for dollars or other crypto currencies, depending on preference.

Bitcoin acceptance soars in Venezuela amidst hyperinflation crisis

However, despite the legalization of cryptomint mining in the country, there is still much misinformation about it and it is not a dominant concept. Venezuelans simply prefer to save in currencies such as the dollar or the euro.

Despite the legalization of mining, extortion is reported
But there are investors who are engaged in this activity in Venezuela, and they agree that they have been approached by police officials in an arbitrary manner, seized their equipment and even reported that they are often victims of extortion by officials, who demand payment in exchange for returning the equipment.

In addition, there are isolated cases in which officials are involved in cases of intimidation or detention of persons who carry out this activity due to their lack of knowledge. Mining in Venezuela is not criminalized. There are different gazettes that recognize the work.

Experts say Bitcoin’s difficulty adjustment could lead miners to disconnect again

Some people register with the National Cryptoactive Superintendence, which is the competition agency. That in case of problems with any official acting outside the law, the Risec may support him. However, very few register, since most of those who engage in this activity do not trust the National Government.

Power outages and failures affect mining in Venezuela
In addition, they report that they have been seriously affected by blackouts and failures in Internet service connectivity, which severely undermine the activity generating crypto-currency in the country.

As an alternative solution, it would be to rely on alternative mechanisms of self-generation to keep operations alive. As electrical plants, however, they encounter another limitation within Venezuelan territory: fuel, which is another of the numerous problems they face within Venezuela.

Under normal conditions, this would be a backup that could function effectively and with total normality. But as we mentioned before, the fuel shortage in the country is totally chaotic.

Venezuela increases gasoline prices and demands support for Petro at gas stations

Now, Aníbal Garrido, is one of the traders, interviewed by the portal Morocotacoin, who assured during the interview that blaming the miners for the power failures in the country is totally wrong.

However, he considers it a mistake, in terms of blaming the power failures to this specific sector. “What is happening at the level of failures is not due to the “high consumption” that mining activity can generate, but rather to the failures in the distribution network of the National Electrical System,” said Garrido.

The use and adoption of crypto-currencies in Venezuela, and especially Bitcoin, has been a long time coming, to the surprise of many. Already in 2012, the first steps with BTC were taken clandestinely in many forums and groups of the social networks most used at that time, by small groups of young visionaries adept at new technologies.

Is crypto-currency mining profitable in Venezuela?

In Venezuela, electricity is so subsidized that it is practically free, however, one must take into account that the equipment normally used for mining is equipment with great computing potential and since it is mostly several pieces of equipment, it consumes a very high degree of electricity.

The amount of money that a miner can get depends on the amount of equipment he has in operation, the amount of electricity he can get from the mine, and the amount of money he can get from the mine.