Bitcoin Goes into Hiding in Crisis-Stricken Venezuela

Bitcoin Goes into Hiding in Crisis-Stricken Venezuela

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Protests have been ongoing in Venezuela as the country’s economic crisis has only grown far worse over the past three years. In the meanwhile, Bitcoin has been adopted by many in the country to survive.

Bitcoin Goes into Hiding in Crisis-Stricken VenezuelaAs her foreign reserves fall to $10 billion, Venezuela is on the frontier of where Bitcoin and failing governments collide. The nation’s poverty rate of 82% is double the 46% rate in 2014. Surbitcoin, the nation’s most popular bitcoin exchange service, was forced to cease trading in early February when its bank account was closed. This has since led to a spike in Bitcoin trading on Localbitcoins.
Bitcoin Goes into Hiding in Crisis-Stricken Venezuela

Related: Surbitcoin Shuts Down Amid Bitcoin Crackdown

The fact that people have turned to black markets to procure goods amid hyperinflation could have led to the growing interest in the digital currency there. The situation has led to an official exchange rate of 9.900 bolivars per dollar, though on the black market the exchange rate is 4,000 VEF/USD, which includes the bitcoin for bolivars rate. Some have turned to selling the nation’s coins for scrap metal, since it offers a better return than holding onto the money for its fiat value.

“Some people eat twice per day at most, and very few calories in food,” says Venezuela native Randy Brito. “Some people know about bitcoin, and they can buy food and medicines with it, but they prefer to be quiet and not make that public to avoid being arrested and to avoid the government taking more action prohibiting bitcoin. This means others don’t learn about bitcoin so it depresses its value due to the lesser demand.”

Bitcoin Goes into Hiding in Crisis-Stricken VenezuelaMr. Brito, who now lives in Spain, says everyone knows corrupt Venezuelan police are raiding mines to extort miners and to take the mines for themselves to generate bitcoins or sell the equipment on the black market. He says authorities also trade bitcoins they seize on the black market.

“Just like they do with the dollars and food,” Mr. Brito says. “Everyone knows that, that’s how life works in Venezuela. Corrupt officials import things people need or steal them from importers, then sell them on the black market. They are doing the same thing with mining devices.”

Bitcoin Goes into Hiding in Crisis-Stricken Venezuela

There was an 11,000 mining farm earlier in 2017, as well as another raid on a bitcoin mining farm in Caracas around the same time. Surbitcoin’s banking partner, Banesco, closed the firm’s account, according to the Venezuelan exchange. But, this is common for Bitcoin businesses worldwide, including in the United States and Europe.

In a social media group dedicated to Bitcoin in Venezuela, Bitcoin.com fielded comments by members about the most unique aspects of Bitcoin in Venezuela when compared to other countries.

“Bitcoin is illegal according to the government,” replied one commenter sarcastically, evoking recent events in the nation. Others complained of the government’s actions against Surbitcoin, lamenting now needing to travel to the nearest cities in order to exchange bitcoin for bolivars.

Mr. Brito believes that many of Venezuela’s most influential people, if they learned about Bitcoin, could help the plight of Venezuelans by educating them.

“They are not leaving the country, but they are also not calling for disobedience, nor for people to buy bitcoin or other hard currencies,” he laments.

What do you think about the recent events concerning cryptocurrency in Venezuela? Let us know in the comments below.


Images courtesy of Shutterstock, Coin.Dance


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  • Craig Grant

    corruption leads to poverty… buy DASH

    • Pete Milliet

      buy Ripple XRP

  • elsordo

    When survival is all time low and Government intervention make things worst. Then the citizen of any country will always find alternative means to live. Bitcoin to the rescue!

  • Steve Van Blerk

    Who’s to say that other governments won’t clamp down on all types of cryptocurrencies. Remember decentralization is the cabals enemy. They lose control of the money supply so will go all out to make cryptocurrency illegal or at least bring in stringent controls. How will Bitcoin and dash handle this?

  • Lukasz

    When people realise that socialism never gonna work! People are dying on streets from hunger yet still leftist think that socialism is paradise on earth. Capitalism create wealth and prosperity and that’s what we need!

    • John Kelleher

      You do understand a government that doesn’t benefit its people or protect and secure their natural rights not only doesn’t deserve to exist but will eventually collapse? The US government spends over a trillion dollars a year on national security. Over $600 billion is spent overseas, that is the American people’s standard of living being exported overseas. The spending on national security increases every year at the expense of everyone’s standard of living. Every year the government has further restricted our natural rights to the point it can kill any American, anywhere without even due process– we have no rights. The money supply grow 3% last years, perfect economic growth even by Keynesian standards but the public is told the government must tax less and cut more domestic spending. Why is that? Debt? Every treasury bill is payable is US dollars. The dollar is limited by nothing, it is digital. No silver or gold need be dug up nor paper even printed. China wants to cash in their US debt so what? China now has a large amount of depreciating digital ones and zeros in its account that it will have to start spending. The money supply is debt and it does not diminish when the government pays off debt. Know why? Because the government is not a business. it owns the printing press. The problem isn’t spending, its a policy of tyranny. A thriving middle class is a threat to our totalitarian government.

      You know its going to be a good day when you wake up and immediately starting ranting about totalitarian economics.

      • Lukasz

        Mate, I’m sorry but you are delusional. Debt is debt no matter is it a business, household or government. Dollar was strong because everyone thought that it can paid it’s debt but with 105% of GDB it’s not longer the case. Dollar will collapse and with it all security, wealthcare and all programs that are paid by government. Just because money are not backup by anything real it doesn’t mean that you can printed as much as you can. That big lie and people gonna die because of it.

        • John Kelleher

          I’ll tackle your biggest fallacy first, not all debt is equal. Take Venezuela, it owes the IMF whose loans are based on SDRs and right now the Bolívar is only worth 0.074 SDR. When China comes to cash in a $10,000 US T-Bill there’s no exchange rate involved, China receives $10,000 digital dollars. The only difference between the T-Bill and the dollar is one has a rate of return the other is deprecating as the money supply expands, both represent debt.

          GDP is a tricky thing to measure unless your economy is based on debt. The money supply is the GDP which represents the outstanding debt across all sectors and it stands at $65 trillion not $18 trillions. So government’s debt to GDP is less that 33%, right? Pretty damn good.

          Now, I didn’t say the government could print money endlessly. However, it not how much money they print that will be there down fall but how they spend it. Spending on endless war is pissing always everyone’s standard of living. The government won’t go bankrupt but when enough people do then America will wake up.

          Economics changed as soon as we went of the gold standard and became the reserve currency. I know I’m radical in my ideas but beats believing the bullshit they feed us.

        • John Kelleher

          Wow my reply was deleted!?!?! Posted on my mobile and reading it here on my PC and refreshed the page … poof! I’ll just take that as speaking to much truth.

        • randybrito

          Sadly there are too many people that think that printing “money” is the way to go. And the major part of them are politicians, with enough power to do it, or to make enough noise for it to be listened by the masses.