In the past months, the news about the drastic growth and demand for the cryptocurrency Bitcoin in Venezuela has made the rounds in media. Daniel Osorio of CNBC was interviewed recently regarding the hyperinflation in the South American Country, Venezuela. Unlike countries burdened under the yoke of hyperinflation such as Zimbawae, Venezuela does not have access to enough dollars required to stabilize the economy.
He revealed that simple lunch costs around eight to ten dollars or more than 200,000 Bolivars and therefore the local people have begun to accept Bitcoin or money wires of foreign currencies to function economically. Bitcoin is independent of black market for Bolivars and at the moment provides a fixed exchange platform for business. He stated that the country might adopt Bitcoin as a legal tender.
Thousands of Venezuelans mine Bitcoin by providing processing power to the Blockchain. Electricity is highly subsidized in Venezuela so much so that it is practically free. Therefore, a person operating several Bitcoin machines can easily churn out $500 a month which is enough to feed a family of four in Venezuela. Moreover, there are no cryptocurrency laws in place making it even an easier affair.
Photo Credit: Marko Ahtisaari