Bitcoin mining has earned renowned popularity in Venezuela, and the reason is the Bolivar. Venezuela’s currency has dropped heavily in value over the last several months. Hyperinflation is a growing problem, and the currency is being smacked in every direction. As a way of stabilizing their assets, many residents have turned to bitcoin for answers.
The situation is highly reminiscent of what’s been witnessed in China. Since the fall of the yuan, many have looked to the currency hoping to carve out financial futures for themselves, but bitcoin mining is no easy job. More than that, it’s also a dangerous one that poses hard-hitting penalties enforced by a government set on destroying the bitcoin industry for good.
Things began in March this year, when bitcoin miners Joel Augusto Padron was arrested by SEBIN (the Bolivarian Intelligence Service) in Valencia. The agency took several of his laptops and computer servers, and Padron spent nearly four months locked in a cell with a dozen other prisoners.
The Venezuelan government is intent on removing bitcoin mining from the country’s list of activities. While it isn’t necessarily illegal, regulators claim that bitcoin is used by cyber criminals and terrorists to fund their operations. To them, bitcoin leads to nothing but trouble, and while Padron wasn’t charged specifically for mining bitcoin, he did face charges of electricity theft (even though electricity is free in Venezuela) and contraband. SEBIN officers are also known to extorting miners they’re looking to arrest.
The situation has failed to have an effect on the general populace, however. Bitcoin mining is still viewed as a valid way to make money, especially in a country that has incurred hyperinflation, food shortages, and other economic mudslides. Men like 23-year-old Alberto (a pseudonym for one who refused to be named) claim to make nearly $1,200 a day through bitcoin mining. It’s become a primary way of putting food on the table, but Alberto works in secret, and lives every day in fear of being caught.