Bitcoin the answer for hyperinflation in Venezuela

Venezuela has a purely oil export economy and has lived from it since its discovery in the early 20th century. During the second half of the 20th century and the first decade of the 21st century Venezuela was among the richest and most prosperous economy of all Latin America with strong institutions and democracy.

Everything change in 1998 when Hugo Chavez came to power and began to make drastic changes in the country a "revolution", among many things that changed, in 2003
an exchange control was implemented. In times of oil boom there were no problems with the exchange of petrodollars by the Venezuelan state.

In 2014 oil prices plummeted and the state's sole source of income was depleted and thus the ability to distribute foreign currency to the citizens. In 2016 the Venezuelan GDP contracted 18.6% and inflation reached 800%. In 2017 it is estimated that inflation will reach 1,600% and the economy will be 35% smaller than it was in 2013, before the fall in the oil prices.

The country's currency, the Bolivar, has been devalued to the extent that is basically worthless. The official rate of exchange between the Bolivar and the US dollar is roughly 10 bolivars to the dollar. Since the dollars are controlled by the government only a handful of friends of the regime can access that rate. But in reality the exchange it's closer to 29,000 bolivars to dollar, by October 4th.

To put it in perspective, the minimum monthly salary of a Venezuelan is 325,544 bolivars which is equivalent to 11.2 dollars. That is to say a Bolivar is equivalent to 0.000000008 BTC

Now the question is, how do Venezuelans surf the abysmal inflation?

Many Venezuelans have found an alternative to escape hyperinflation. They have taken Bitcoin as an option, and mining Bitcoin has become big in the country.

Electricity is one of the few things that all citizens can afford being highly subsidized by the state making it virtually free significantly reducing mining costs and becoming an opportunity for Venezuelans who struggle to survive in daily basis. You can make up to $ 500 a month, that represents a small fortune to support a family in the caribbean country.

Since Venezuela does not exist any regulation or laws on mining and cryptocurrency, the Venezuelan authorities have not been slow in realizing what has been happening and have already dismantle two mining farms in March 2016 and January 2017 and have proceeded to convict the miners as criminals for cyber fraud and electric theft. This has not stopped the operations that are carried out, simply the gain is very juicy to discard it.

The economic panorama in Venezuela does not seem to be changing the course any time soon due to lack of political will, which leads me to think that more and more Venezuelans will adopt bitcoin as a currency of exchange as well to preserve the value of their Bolivars facing highest inflation in the world. Bitcoin is in a way one of the things that keeps the country afloat.

30 million of Venezuelans struggle in daily basis for food, medicines and essential goods. Many have opted to emigrate. But for those of us who decided to stay here we had to reinvent ourselves and get new sources of income adopting the bitcoin as our currency making me believe that Venezuela will be one of the first countries to widely accept a Bitconization.