Venezuela’s Blackout and Bitcoin’s Electricity Requirement: Is This BTC Weakness a Back Breaker?
After the blackout experienced by Venezuela a few days ago, Bitcoin (BTC) transactions dropped around 40%, according to Professor Steve Hanke. He wrote on Twitter that since the blackout hit Venezuela, transactions on the Bitcoin network fell massively. Frances Coppola, a banking expert, added that the problem with Bitcoin is that it needs electricity.
Critics Attack Bitcoin After Transactions Dropped
Clearly, Bitcoin and other digital assets need internet to run. That means that they also need electricity. Without this information, transfers cannot take place, and individuals are not able to transact Bitcoin. There are some companies and individuals that have been trying to search alternative ways to move Bitcoin from one place to another. Blockstream, for example, has launched a satellite to ensure that the Bitcoin network stayed alive, even during a massive blackout. With this satellite, Bitcoin transactions can go through without using the internet.
According to data provided by BitInfoCharts, Bitcoin transactions fell from 367k to 212k in just a few days.
Nonetheless, there are some reports that say that the drop in transactions could be related to the end of Veriblock’s testnet on March 4. Larry Cermak, Head Analyst at The Block, explained that Veriblock’s testnet rather than Venezuela’s blackout was behind the transaction drop on Bitcoin’s network.
The Bitcoin daily transaction count dropped by 42% in the last 10 days. The timing coincides with the end of Veriblock's testnet on March 4. While still in testnet, Veriblock captured anywhere from 25-45% of Bitcoin's transactions.https://t.co/GY9dQMUgiv pic.twitter.com/NIZiJvgiYs
— Larry Cermak (@lawmaster) March 11, 2019
During the last Bitcoin transactions have been growing since April 2018, showing that there was a growing interest in using the digital asset even when it lost more than 80% of its value since its all-time high.
It is worth mentioning that crypto enthusiasts will have to find a way to transact virtual currencies without depending on internet connection.
A few weeks ago, there were some reports regarding a Bitcoin user that decided to send a few Bitcoin to another individual in a different country using amateur radio. This shows that there are different solutions and mechanisms that would allow people to send and receive digital assets even in the worst case scenario.