History of mining: Venezuela
Venezuela is one of the leaders of most mining efficiency ratings. A lot of people do not know why it is so profitable to mine there. And the answer is quite simple - cheap electricity.
No, you did not understand. VERY CHEAP ELECTRICITY. It costs about 2 (!) Cents (!) Per 100 kW! This cost allows you to mine 1 bitcoin for $531. In Russia this number is equal to $4675, which is 9 times more. Mining in Venezuela will be profitable even if the bitcoin rate is 12 times less than today's quotes - $1000.
It would seem that Venezuela is a miner's dream. But for some reason, we do not see a large number of Venezuelan mining farms and queues of private miners at the Caracas airport. The thing is that electricity prices is the only only advantage for mining in Venezuela. And the list of shortcomings is barely enough for our article.
We are not going to delve into the political history of Venezuela, but we can say that it made mining one of the means of survival for local residents. The fact is that due to hyperinflation of 1.7 million percent a year, two Big Macs cost the same as the average monthly salary. And in order to realize this, you do not need to count the bills. In Venezuela, they are simply weighed.
The local currency loses its value every day and residents have to look for an alternative. And the good old "Eurodollar" does not help, since the authorities have introduced a complex system of currency exchange, in which its official rate is 10 times less than the real one. Decentralized bitcoin has become a lifesaver for the “advanced” residents, and then for everyone else.
Surbitcoin, the country's leading bitcoin exchange, had only about 500 users in 2014. In two years, its audience has grown 170 times. This is how the crypto fever began. Bitcoins began to be accepted as a means of payment in stores, pharmacies, cinemas and even in educational institutions. Unlike the first state cryptocurrency, which there is no one to sell.
We are talking about the El Petro (PTR) cryptocurrency, the creation of which was promoted by the President Nicolas Maduro. Some people call it “the first state scam”. The PTR price was set at the level of one barrel of local oil - about $60. It should be noted that the National Assembly of Venezuela was against the creation of the cryptocurrency, its representatives referred to the contradiction of the country's Constitution and the risks of increasing corruption.
However, this did not stop Maduro from releasing El Petro in February 2017. Its documentation was in many ways similar to the Dash cryptocurrency, and information about the fees could only be learned from the president (it was not possible to verify it). The issued 100 million El Petro coins were controlled by the same address until 2018, by two - since that time. In this case, the coins remains still for a long time.
Venezuela has no laws governing the cryptocurrency market. But law enforcement agencies are still arresting some miners on charges of stealing electricity and storing contraband. During the raids, the police seize computers, but in many cases they keep them for themselves - and mine on their own. As a result, many Venezuelan miners had to go underground. In addition, many of them have switched to ETH - the easier cryptocurrency to mine.
Since 2018, the state has begun to “tighten the screws” by limiting the number of crypto exchanges, checking bank accounts to detect speculative transactions and setting a 15% commission for cryptocurrency transfers. A decree was also published, according to which using or mining El Petro or other cryptocurrencies without permission will be punished with a fine of up to $18000.
The reasons for the rejection of the popularly recognized bitcoin are clear - it cannot be controlled, unlike El Petro. Its use could greatly help the country's economy. At the moment, a fairly large number of oppositionists, led by the head of the National Assembly of Venezuela, Juan Guaido, are fighting against the power of Nicolas Maduro. Juan Guaido often supports Bitcoin in his statements.
If the country's power passes to the opposition, then Caracas may become not the capital of world crime, but the capital of mining. With these electricity prices, no country can compete with them. Should today's mining leaders be afraid of Venezuela's potential? Write your opinion in the comments!