HomeBitcoinTo escape inflation, Venezuelans are mining Bitcoins

To escape inflation, Venezuelans are mining Bitcoins

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Venezuelans are looking for crypto currencies, particularly bitcoin, in the face of historic bolivar inflation. However, it is not without drawbacks.

A well-kept secret is being held in a locked chamber of a Caracas office building: 20 computers are dedicated to “mining” bitcoins, allowing Venezuelans to be paid in virtual money and therefore escape the country’s raging inflation. The system, which may be used in warehouses, businesses, or even at home, is based on machines that solve mathematical equations that check the legitimacy of bitcoin transactions. The mechanism gives out bitcoins as an incentive. Veronica’s supervisor, who requested that her first name be changed so she could testify, explains the latter, who requested that her first name be changed so she could testify.Veronica, an office worker, claims that her supervisor installed 20 bitcoin machines in early 2015.

When confronted with these computers, she explains: “There are machines that generate $800 every month (more than 26 million bolivars, editor’s note). Because they are older, they are less profitable. They are on all day, and my employer occasionally receives an email informing him of how much money he has made.” The strategy, which is employed all over the world, is especially important in Venezuela, a country in the grip of economic collapse and stratospheric inflation, which the International Monetary Fund (IMF) predicts could reach 652.7 percent this year, or perhaps 1,400 percent, according to the firm Ecoanalitica.

It’s difficult not to be tempted—by observing her office’s successes, Veronica has also taken the plunge at home. “I purchased one machine, a buddy purchased another, and another purchased twenty. We’re going to put them in a lady’s home. She claims it costs $2,280 and generates 20–25 Litecoins each month (another virtual currency). “Each Litecoin is worth $46, which is $920 every month,” Veronica exclaims. a fortune in a country where the minimum monthly wage is 136,543 bolivars (40 dollars), supplemented by a food voucher of 189,000 bolivars (56 dollars).According to Randy Brito, operator of the website BitcoinVenezuela.com, the increase in these virtual transactions began in 2014,when the economic crisis intensified as the price of oil, the source of 96% of the country’s currency, fell. Bitcoins provide some shelter from this crisis.

“Whoever buys bitcoins using bolivars wins money from the rise in bitcoin’s price versus the dollar and avoids inflation,” Brito told AFP. He thinks that over 100,000 Venezuelans are “mining,” but an exact figure is hard to determine because many protect themselves by using servers in other nations. According to Eugenia Alcala, founder of Dash Caracas, a teaching group, these virtual currencies are used to purchase food and medication, both of which are in low supply.

According to the LocalBitcoins webpage, bitcoin transactions in Venezuela hit approximately 40 billion bolivars ($1.1 million) in the last week of September. People are purchasing computers like crazy. They buy them online in China, and sometimes you have to pay someone $1,000 to do it since the site is overcrowded, “Veronica explains. Each PC costs between $1,310 and $2,280. Then there’s another stumbling block: “You have to pay at least 800 dollars for (customs) to allow them through,” said AFP Simon, a 32-year-old entrepreneur who imports them.

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