Topic: Venezuela hit by new nationwide powercut for more than three days (Read 894 times)

Venezuela facing hard economic crisis over the years, and the past month it begun to recover slowly. Now once again the scenario is going worse with nationwide powercut. Mundro indicates USA as the cause, even the capital city Caracas too is experiencing the same. Business people prefer moving out of the country, as they've lost hope of the recovery.

Will this make any impact on the global cryptocurrency economy as electricity is a much required resource for the successful functioning of bitcoin and major other cryptocurrencies in the market. I believe such scenario will never happen with any of the countries around.

Venezuela facing hard economic crisis over the years, and the past month it begun to recover slowly. Now once again the scenario is going worse with nationwide powercut. Mundro indicates USA as the cause, even the capital city Caracas too is experiencing the same. Business people prefer moving out of the country, as they've lost hope of the recovery.

Will this make any impact on the global cryptocurrency economy as electricity is a much required resource for the successful functioning of bitcoin and major other cryptocurrencies in the market. I believe such scenario will never happen with any of the countries around.

Things are getting really interesting. Maduro has accused Guaidó of attempting a military coup against him. However, it looks like the coup attempt was suppressed. As of now, it is impossible to say whether Guaidó enjoys any support from the military factions. Initially, there were indications that some of the soldiers were supporting Guaidó.

May 2, 2019

Today marks a week since I left my home in Venezuela.

So, here I am, watching the news since 6 a.m., haven’t separated from my phone all day. I’m worried about my loved ones, wondering if I could have done more before leaving, but knowing I had to leave anyway.

I left everything I knew behind, but I also fled an escalating crisis that jeopardized my income as a remote worker in the crypto space, where I’ve been now for years.

For the Venezuelans using cryptocurrency as a tool to survive the economic consequences of a brutal socialist dictatorship, receiving support from the international community has been vital to the reformation process. The trouble is that this attention has quickly deteriorated into a double-edged sword: a trend.

In the last few years, Venezuela has become a favorite pop culture reference in crypto, where bystanders – usually from a privileged background and perspective – spout their ill-wisdom about Venezuelan socialism, economy and migration.

This situation is particularly common in crypto. People armed with good intentions and misinformation about how Venezuela’s economy works – or better said, how it doesn’t work – spread their confusion and often diminish an extremely painful experience being shared by millions of Venezuelans.

So let me, as someone who used bitcoin to survive in Venezuela, clear up the misconceptions: Bitcoin can’t fix the situation in Venezuela.

There are no official statistics of how many crypto wallets there are in Venezuela. There’s no way to know how many each person owns. What it is very clear is that beyond a couple of businesses that accept this form of payment and a few trusted exchange platforms online, there are no services for crypto users available in the country.

No ATMs. No prepaid debit cards. Just assumptions.

The fallacy that bitcoin could “save” a country’s whole economy assumes the country meets all the requirements for mainstream adoption. Just to start, there would be needed widespread computer and financial literacy, reliable electricity infrastructure, stable internet service and an economy that not only allows the majority of citizens to count on a device to keep their digital wallets but also the safe migration from fiat money to digital money.

As we can see, the fact that Venezuela serves as a use case for bitcoin does not mean that it currently has the circumstances for broad cryptocurrency adoption.

The hyperinflation has stepped all over the Bolivar, as it also impacts US dollar-based prices that rise on a daily basis. So using bitcoin to get dollars, which is what many Venezuelans currently do, is still problematic and vulnerable to inflation issues.

There’s also the mining. Venezuela is famous for its off-the-charts rates of bitcoin transactions and mining activity. But the reality is that having access to cryptocurrency is limited to earning freelance income, trading and mining, which unless you are wealthy enough to own your own mining farm, isn’t a feasible option for most Venezuelans.

The crypto misconception

Foreign initiatives to help Venezuelans have instead revealed widespread ignorance about the actual problems that Venezuelans face.

Working personally as a contact for the crypto charity GiveCrypto, owned by Coinbase, during 2018, I found a common problem in this initiative that others have followed: the gigantic misinterpretation of how to help from outside.

In the case of GiveCrypto, the goal was unreachable from the start: to feed 300 people with $100 in bitcoin. That’s 33 cents per person. To anyone with an understanding of the economic situation of the country, hyperinflation wouldn’t be this underestimated. Sadly, it’s quite commonplace.

And this isn’t an isolated case of donations given without much of strategy based on reality.

Crypto donations are very popular nowadays, like in the case of AirTM, which has just announced that will be teaming up with MakerDao on its goal to raise $1 million to distribute between its users in Venezuela, with a goal of giving away $10 to each aid recipient. (Such a small amount doesn’t serve as savings or investment, as it easily vanishes for a week’s worth of expenses.)

Despite all the international efforts to distribute crypto in Venezuela, so far there aren’t any solutions able to make a sustainable and adequate difference beyond what a similar dollar donation could have achieved. The important thing for these foreign brands appears to be just cramming a blockchain-shaped peg into any hole.

Is there no way they can buy a second-hand transformer from a third party?

As an aside, is there any chance of Maduro stepping down and making way for someone who hasn't antagonised the world? 

The only chance Maduro steps down is if another country were to welcome him like a King, which is quite unlikely.   The only one I can think of is Cuba but they want him to stay right where he is in order to keep sending the oil in exchange for goods and labour provided, they have their own problems.   Any benefactor would need to be a rich nation I guess, I dont think China has any purpose from him except as a gateway to aquire assets and access to the oil fields perhaps similar to how China operates in Africa.    
Russia wants Maduro there to give them a free base in South america.   The Venezuela Military want Maduro to remain there so they can continue to export drugs from Columbia with immunity from prosecution.     Unfortunately the people are all secondary, the only ones who benefit now are corrupt or somehow receiving money from a government which is broke outside of cash to buy bullets to fire at those who disagree.    Its not a unique path, its well trodden spiral by failed regimes into chaos and eventually war and destruction of the country

Two days ago we had 12 hours blackout, its getting a little better, but still there is a deep problem in the dam that needs urgent addressing: Replace of two giant transformers (it has 3, only the last one is working) only a company from Germany has them, but they don't recognize the usurper so there is no way for this to be purchased. Unless the Chinese can cook something (since they have nearly all world technology, copied or not...).

Are you able to do your own electricity generation? For example solar panels on your roof.

In the UK and USA, having solar panels and generating your own electricity (and selling the excess back to the grid) is quite common. It decentralises electricity generation and makes it less likely a bad actor can harm the entire country by hacking the grid.

The World's Most Miserable Economy Has Seven-Figure Inflation

Unfortunately a decade and a half of "socialism" got rid of most of the national production, 90%+ stopped, went broke or fled the country. Nobody wants to invest in a country where the gov can seize your assets on a whim, and the State itself doesn't produce anything but corruption.

Electricity failing due to neglect on the State electric company, was just the icing on the cake. In the same situation are all basic services, which where all nationalized during Chávez and inherited by Maduro the inept.

It is deeply ironic that a "socialist" gov gives gasoline away for free, but provides no healthcare, no education, not even personal security, nothing. But unlike in a free market economy, you can't find a private solution either...

Are you able to do your own electricity generation? For example solar panels on your roof.

In the UK and USA, having solar panels and generating your own electricity (and selling the excess back to the grid) is quite common. It decentralises electricity generation and makes it less likely a bad actor can harm the entire country by hacking the grid.

The World's Most Miserable Economy Has Seven-Figure Inflation

Unfortunately a decade and a half of "socialism" got rid of most of the national production, 90%+ stopped, went broke or fled the country. Nobody wants to invest in a country where the gov can seize your assets on a whim, and the State itself doesn't produce anything but corruption.

Electricity failing due to neglect on the State electric company, was just the icing on the cake. In the same situation are all basic services, which where all nationalized during Chávez and inherited by Maduro the inept.

It is deeply ironic that a "socialist" gov gives gasoline away for free, but provides no healthcare, no education, not even personal security, nothing. But unlike in a free market economy, you can't find a private solution either...

Yes, this is bad to Venezuela economy not only in cryptocurrency but their economy itself. Usually the industrial sectors are earning or will be productive through the use of machineries run by an electricity. This is the same with cryptocurrency especially if in their are it is widely known. This may decrease crypto market a little bit but it could not compromise the market because no one could sell crypto without power to run their gadgets.

Electricity is essential to all industries. As one of my professor said during college days that electricity is the blood of industry.

Venezuela facing hard economic crisis over the years, and the past month it begun to recover slowly. Now once again the scenario is going worse with nationwide powercut. Mundro indicates USA as the cause, even the capital city Caracas too is experiencing the same. Business people prefer moving out of the country, as they've lost hope of the recovery.

Will this make any impact on the global cryptocurrency economy as electricity is a much required resource for the successful functioning of bitcoin and major other cryptocurrencies in the market. I believe such scenario will never happen with any of the countries around.

IIRC, the last time a venezuelan govt decided to eliminate the subsidy on gasoline, all hell broke lose. The whole thing triggered a surge in the price of gasoline and public transport fares, venezuelans didn't like that so riots spread throughout the whole country which led to thousand of citizens getting killed in the protests. I read about this a long time ago, this whole event has a name but I can't remember it.

But I think there are other ways to help the venezuelan economy if they want to start in the oil industry, for instance, the privatization of PDVSA, the company in charge of production and exportation of oil.

If the subsidy on gasoline is cancelled (at least temporarily), then there will be a huge improvement in the health of the Venezuelan economy. But for some unknown reasons, the government don't want to do that.