Topic: Should Bitcoin mining be legal in Venezuela? (Read 320 times)

Et tu, Jet?  

The first mistake in your plan is that you think Venezuela has cheap electricity rates. No, Venezuela has cheap subsidized electricity rates.

Just like gas prices, gas is not cheap in Venezuela because some miracles of nature and in Norway 1.5 euros /l (not gallon/  liter) because God is angry with them but because of subsidies and taxation. And ironically, the guys with cheap gas ended up in poverty the ones with taxation with a 2 trillion investment fund for rainy days...but that's something else and a bit off-topic.

Now, back to Venezuela, the country has indeed a bit of cheap energy, like the Guri dam, but that provides only a part of the total energy, and the rest is costly (because maintenance, corruption, old equipment...and the list goes on).

To draw a better picture, it's like you trying to grow lemons in your balcony, it's basically free but the problems arise when you want to grow a second one...because there is no space (capacity). So your only choice would be to buy a second flat (way to stupid!!!) or rent a flat to grow lemons (also stupid, but exactly what Venezuela is doing). They have arrived at the point where they must sell oil because they are incapable of refining it and buying back refined oil to power the electric power plants.
And the electricity produced this way is the most expensive in the world.

Now, the second part, the investment...

At current rates, mining will reward miners with around 1800*7000$ , that's around 12 million dollars per day.
But for V people that would be impossible, as we already have a 50 exahash rate so they would have to plan only to take about half of it, that's 6 milion$ and the investment needed is.........auuch!!!
Since I'm tired of giving the S9 as an example let's switch to Inno and for 50 exahash you will need around 3 million T2 at a price of 1118 USD (lol) ...3 billion.

Of course, they don't need that much they could start with a smaller sum....but what is small enough for them to afford it?
10 cents a day per individual would look great in a country where with 100$ a month you're king but....how are people who have only 10$ gonna buy mining equipment and not die of hunger before it arrives?

Scenario
It will be with the help of the government.
Well, would you trust the government that has destroyed one of the richest countries in the world with such an operation?
Certainly not.

And the problems don't stop here.
Venezuela is battling with inflation right now, and inflation is mainly caused by having more money than products.
The ones that will mine coins will be happy, but what will happen to the rest in a scenario where more money...no products?

If the guys in the government would really want to help the population they would start with far simple things.
Invest in food production, driving supply up and external demand down, those 3 billion needed to mine 6m$ would be enough to construct 8 modern pig farms with the capacity of over 250 000 pigs, enough to at least tame the hunger in Venezuela.

There are many nations and governments around the world that are not interested in the quality of life that is normal for their citizens. These bodies are mostly concerned about focusing their resources and people on endeavors that will make the government money. Bitcoin mining would simply take the economy out of the hands of the government, which was essentially the entire purpose of the "revolution" to begin with. The same reason they nationalized their oil industry is why they will not allow for Bitcoin Mining.

Bitcoin mining should be legal wherever you are in the world, but this is mostly a dream as authoritarians wish to control everything they are able to control. It would allow the people to be more in control of their economic destiny, but this is specifically against their current principals of law.

I dont expect any level of legality for mining as long as the miner is capable of affording the electricity bill and every other requirements. Now that the government knows how much can be earned, they might be demanding a cut in a different description. If any government request for Tax for cryptocurrency transaction i wont expect any form of restriction whatsoever also. The bills had already been paid in that form.

an economy just don't decline like that there are usually important reasons for that,

socialism in this case. there is no point working for venezueland money as its worthless. and the government completely incompetent, it only enriches itself (petro)

The Venezuelan government has noticed how quickly and rapidly crypto-currencies are spreading in the country. For many residents, electronic money has become a salvation, as the country lives below the poverty line, and the national economy is dying catastrophically fast. Bitcoin was an outlet for residents, but not for the power of the country. Bitcoin is external crypto currency and for authorities it isn`t favorable. Therefore, it makes sense to introduce the national Petro crypto currency, which they can control.

It was introduced almost at the same time, when the import of equipment for Bitcoin mining was banned. Petro plays the role of passive expansion of the market, replacing other crypto-currencies, and being under the total control of the authorities. To ensure that people are loyal and supportive of the national crypto currency, the government offers goods and services that can be purchased for Petro. In addition, it was recently announced that the country will have two currencies: "sovereign bolivar" and Petro. Venezuela is even going to pay salaries with Petro.

However, sadly for the inhabitants of Venezuela, the "oil-provided" Petro isn`t really provided with anything. Unfortunately, the coin, which was designed to save the Venezuelan economy from hyperinflation, isn`t traded on any major crypto-exchange. Information on the implementation of the project is very small, it lacks, and there is no opportunity to sell the tokens. I conclude that Petro was a scum, for which the inhabitants of Venezuela will pay a huge price.

I absolutely agree with you on it Venezuela has a great opportunity to become a crypto centric economy if it is able to move on the footsteps of Malta. But the great politics is the problem.

Take the example of the old venezuelan currency, it too has a fixed rate set by government i.e. 10 Bolivar = 1$ but the truth is that no one is technically able to buy on that rate due to high level of red tapism. Everyone knows that the currency is falling so most of the trade is carried on a black market rate. which is hundreds of time than this rate. Only a few top class political officials are able to barter on this rate. The fate would be the same if government brings exchange of bitcoins from them

I agree with you undoubtedly things have gone too much out of the hands as Maduro who is merely power hungry has actually set up an autocracy so I don't think things could improve until he is impeached.

The major problem to mine there is that it's only artificially cheap.

Government is subsiding the electricity. They are not paying the real price for it.
If people are building big mining farms, government would be paying for that bitcoin.

That's not sustainable.

Bitcoin should be mined in location where energy is truly cheap, like in China near hydro dams. Government interference with subsidies will hardly work out.




That's half of the truth

Oil prices collapsed, but they already recovered. Barril was about 120 at ath , crashed to 40 and now close to 75usd
The economy shouldd have recovered if that were the only reason.

But it is even worse now.

There are many problems woth Venezuela.
Maduro is an illiterate dictator. Former truck driver.

He doesn't get economy and he is trying to do what he wants.
He is defining prices at private stores. He forbid companies to raise prices, whilen he was printing money .


He said "now dólar os 1/7 to bolivar, and government will be the only place to buy dollars". When people tried to buy there, there was a dollar shortage (of course).

Then the Black market exploded , with dolar 1/2000 ... And so on.. that was years ago.

There a problem with trust (investors dont trust maduro to invest im venezuela)and expectations about the future in Venezuela. The economy will not recover, until this trust issue is solved.


Then he just stole factories, ships, all infrastructure that was not owned by the government. He owes everything now.
Why would you open a factory in Venezuela, if Maduro can just take it away from you, (forcing you to sell for worthless bolivars) saying that you are a greed capitalist, selling for high price

I had no idea they had gone this route. It's hard to decipher where they are really at though even google brings up conflicting stories. I see on one hand they are banning imports on mining gear. Then there are reports of the growth in adoption of Bitcoin within Venezuala.

Last I honestly read into anything was the launch of "Petro" and the hype it received in part I'm sure to the banning on purchases imposed by the US President. I could see why in a time like this they would want to try and get a handle on things. Bitcoin in itself does allow for people to take the government out of the equation with their purchasing and sales. They may be afraid of losing further control over their citizens and the financial markets of the country. This in hand could force people to use Petro, in an effort to prop the currency up on use so people aren't looking hard at the reserve it's supposed to be backed against.

I agree that only the upper middle class could/can afford to mine Bitcoin, but they are still bringing hard currency into the country, and if they exchanged it through the government, then they could spend the profits locally, and that should benefit a number of people.

The problem persisting in Venezuela is something much different than just hyperinflation. The most basic problem there is the great budgetary deficit. Actually Venezuela since quite long rested upon its huge oil reserves which made the country super rich in terms of increasing export. But when a country has an increasing GDP stress should also be given upon self reliance of people which was largely ignored by the govt since huge subsidies and freebies were given with substantially lower tax rates. Moreover absolutely no other sector was developed than the oil and refinery sector. So when the prices of international oil market crashed so did the economy there.

Now why the ban was not that a bad move. Even if lets say 10-20% of the top class population is able to import computers and start mining and mines some money in form of bitcoin. This would largely increase the gap between rich and poor becuase mining just a 0.0003 btc would make you richer than half the population there. This large gap between rich and poor will lead to a situation of almost civil war in there. Moreover, don't even expect more than 15-20% of population to get engaged in this business because they don't even have food to eat forget about GPUs to mine.

The best way out: Banning bitcoin mining doest means cryptos have to exit from venezuela govt. should in turn try to foster its old cryptocurrency "petro" and make its use official but mining illegal in the country. This would give them a largely stable currency than their old fiat which is inflating at a rate of 12847% . All the reimbursements must be made in this currency only.

Edit: But Yeah, once the Venezuelan economy is stabilized ban on crypto mining would be like the worst thing to do.

bitcoin mining in venezuela as in china will have vast consequences for the social fabric of that country, they will lose all socialist workers that cared for the infrastructure there.

as they will lose trust in the population, the future development of the country and social security. stop work, and become capitalists themselves they then will check carefully which currency they accept and the entire country will consist of new carpet pyramid systems abusing the others as money earning cattle.


it would make no one rich but only waste ressources.

additionally mining bitcoin in venezuela would be completely pointless as they would never be able to posses and install the computation power, they dont have an it industry and their climate makes efficient installation too expensive. they will lose in this competition against miners in china, or the west or russia


i am absolutely no friend of these pow token they are all garbage

Of course, mining in Venezuela should be officially resolved, as this is the only way to survive for people there. This country almost drowned in an economic catastrophe, continuing to exist in the conditions of hyperinflation. The only way out for Venezuelans are crypto-currencies. In a country where there is not enough food and basic medical care, only Bitcoin contributes to the fact that food and goods are replenished in stores. The authorities should legalize the mining of bitcoin, as this increases the purchasing power of citizens, which positively affects the economy of the country as a whole.

Not only bitcoin mining should be legal. There should be a democratic government, which allowed freedom in the country. What we are seeing there is the collapse of and authoritarian regime that destroys the country and blames others for it. We have seen a massive exodus of Venezuelans recently but people steadily leaving the country and never coming back has been happening for years.


The problem is, they don’t understand how the world works, and they don’t want to.

Venezuela has a massive problem with their declining economy. Any foreign earnings would seem to be beneficial and should be encouraged by the government. Bitcoin mining offers a means to utilise their low electricity costs to generate what is effectively a hard currency, but the government is making Bitcoin mining illegal, and imposing severe penalties on miners, and confiscating mining rigs. I would have thought that encouraging miners to earn Bitcoin, and offering to exchange this through a government controlled exchange, would boost the national income as well as helping to stabilise the new currency.