Bitcoin isn’t just a new-age technological innovation, it’s a life changing cryptocurrency that will surely transform the way the world works. Countries like Japan have reaped the rewards of Bitcoin from a consumer perspective, but arguably no country has benefited from Bitcoin more than Venezuela. More than just a cryptocurrency, it has a presented a lifeline for the country’s struggling citizens.
The bolivar bottoms out
For those unaware, the Venezuelan bolivar has become largely worthless as a currency. This has left millions in Venezuela struggling financially, with many unable to secure food and basic supplies. This has seen some resort to smuggling measures to survive, with residents commonly bringing medicines, food, and daily essentials across from the western border of Columbia. Time’s latest report on Venezuela’s struggles really does reveal the gravity of the situation, “The extremely low valuation of the Venezuelan Bolivar is alarming, it takes 800 bolivars to buy a US dollar compared to just 200 one year ago”.
With the bolivar falling through the floor, residents understood the need to look elsewhere for an alternative. Current government restrictions on the use of the US dollar made finding an alternative in the traditional sense extremely difficult. Enter Bitcoin, the world’s leading cryptocurrency and a censorship-free option that has become life-changing for Venezuelans. As a currency that can’t be confiscated by the government, the nation’s mass unemployed have started mining Bitcoin, using the proceeds to buy goods online.
Cheap and cheerful mining
The reason as to why Bitcoin has become arguably Venezuela’s lifeline is that it proves to be extremely cheap to mine the cryptocurrency in the Land of Grace. In fact, it’s the cheapest place to mine Bitcoin in the world – at least according The Economist. Active miners have also begun to arbitrage bitcoin mining, which has only opened the door to further avenues for profit. The Economist’s in-depth report revealed that Venezuelan government electricity subsidies have made Bitcoin mining extremely affordable, “The extent of the government’s subsidies means that, according to data from Crescent Electric Supply Company, Venezuela is the cheapest place to mine bitcoin in the world.”
Venezuela has become the poster country for what Bitcoin can bring to a struggling nation. But, it’s certainly not the only country to take advantage of cheap mining practices. In China, Malaysia, and Iran – in spite of questionable legal status – Bitcoin is still a popular border payment option. Due to increasingly strict policies regarding overseas transactions using foreign currencies, Bitcoin has presented the perfect alternative.
A shift in perspective
During Bitcoin’s formative years, the currency was labeled as the answer for those struggling in the underbanked regions of the world. It’s ability to defy harsh border payment regulations would – at least in principle – set it apart. However, as Bitcoin’s price swelled, it’s importance to world development seemed to take a backseat. Now, with Venezuela’s adoption of Bitcoin making global headlines, there has been a shift in perspective. It appears that Bitcoin’s worldwide potential as a major form of payment and exchange within struggling economic nations is becoming clear.
For the global good
Bitcoin is making an impact throughout the world. We’ve seen in places such as Japan that cryptocurrency can become widely accepted across most major retailers. However, it can be argued that it’s most important impact is actually coming in places like Venezuela. Giving the nation’s poorest citizens a lifeline when they needed it most, Bitcoin could soon be labeled as not just the world’s leading crypto, but also a true economic savior!