Venezuela, An Oil-Rich Nation, Is Becoming A Hub Of Bitcoin Mining. Find Out Why?
You can earn Bitcoin in two ways. You can buy it with fiat money via an online exchange or you can mine it. It is a complex process. Miners solve complex mathematical equations to verify each cryptocurrency transaction and as a reward for their successful effort, earn crypto coins. This requires heavy computers and other equipment, and requires a lot of energy. Global attention has been drawn to the surge in Venezuelan mining operations. Why is Venezuela suddenly a hot spot among cryptocurrency miners?
Crypto mining in Venezuela is extremely profitable, with electricity prices as low at 0.06 cents per Kilowatt. This country is plagued by high unemployment and economic uncertainty. Inflation is at almost 3,000 percent. This technology is so attractive that many people will bet their entire lives on it, despite the volatility associated with virtual currencies. The lure of instant wealth is driving Venezuelans into mining. However, not everyone is able to become a miner here in South America, where the minimum wage averages around $10. Many don’t have the financial resources to purchase the equipment required to mine cryptocurrency.
Other problems include frequent power outages, slow internet speeds, and other issues. These roadblocks, however, are not strong enough to stop the Venezuelans from pursuing crypto mining.
For many years, Venezuela’s bolivar currency has been plagued by hyperinflation and has continued to fall against the US dollar. Many people see cryptocurrency as a way to escape hyperinflation.
In 2017, Venezuela’s President Nicolas Maduro launched a cryptocurrency called the “Petro”. He claimed that Petro would open the door to bypassing what his government called the American “financial blocade” of South America.
Petro, despite his efforts to make it popular and gaining investor and consumer confidence, failed to gain any. However, Bitcoin has captured the imagination of Venezuelans.