Despite the low cost of mining for Bitcoin in Venezuela, a recent ban by authorities is now preventing any new imported mining hardware. This ban is extensive, going as far as to prevent miners from bringing in certain types of graphics cards, computers, and especially ASIC miners.
This type of ban would usually be surprising for this country, considering that they have embraced the launch of a local cryptocurrency platform called Petro that is linked to their oil value. Local miners are highly discouraged, which could be due to the economic crisis that the country is currently experiencing as the worst of its history. As the crisis worsens, hyperinflation of currency, debt, shortage of food, and overall lack of civility are side effects. The first sign of this slow collapse was the loss of value in oil.
The government spent too much time and energy with the printing of substantial amounts of money, causing the value of minimum wage employment to lose its power. However, while the country tried to raise those wages, they continued to print more money, leading to a spiral that no part of the government can seem to control.
At this point, Venezuela’s fiat currency (the bolivar) has decreased to less than 0.01% of its original value during the last five year, even though inflation has risen 16,147%. Unless someone has a substantial amount of wealth, the bolivar is as useless as any other piece of paper, and citizens have even gone as far as to use it as confetti at sporting events. In another unfortunate step of the crisis, the government has recently decided to eliminate three zeros from the end of their currency in the next week.
Unsurprisingly, there are many people turning to the help of cryptocurrency in an effort to keep the little value that their funds have left. As thousands of people gravitated towards cryptocurrency, the government and its revenue suffer even more, since consumers are not keeping their funds within the country. Even the idea of paying for essential utilities is equivalent with a cup of coffee.
Many miners prefer the Venezuelan cost to mine, since a single BTC token only costs $530. By investing here, many citizens are taking a final effort to survive the crises, but that hope is being taken from them with the recent ban. Even though news outlets are only recently reporting the change, the law has been in effect since April 2018. The government wants to stop consumers from taking their currency out of the country, and some customs agents have even been confiscating mining hardware by air and by sea.
Popular shipping brands Liberty Express and DHL have managed to work with this change, updating their information online to reflect the new ban. To limit the ban, or at least discuss it, the National Association of Cryptocurrencies is planning a meeting with the Superintendence of Cryptoactives and Related Venezuelan Activities.
Carlos Vargas, from the Venezuelan board, made the following statement in April:
“We are in an evaluation process to select and authorize companies that are qualified to import and market digital mining equipment and be responsible for the respective guarantees in our country.”
Due to the evolving discussion, seasoned and aspiring miners should abstain from purchasing equipment to use in Venezuela for now.