Venezuela jumped into the cryptocurrency headlines earlier this year due to the issuance of the first national cryptocurrency ever released, the Petro. Albeit having a rough start, even changing its blockchain just two days before the Initial Coin Offering presale, and being declared illegal to trade by the US government, it was a breakthrough. Also, the president Nicolas Maduro has encouraged the population to build small cryptocurrency farms and even has mentioned the creation of a cryptocurrency bank for the youth. Anyone should think that Venezuela is a bitcoin paradise for everyone.
Wrong. The truth is that in Venezuela, there is a silent pursuit against bitcoin miners. And no one talks about it because no one wants to be associated with mining in any way. There are lots of examples and the reasons are clear for anyone that is in the bitcoin mining business right now. In a country where the minimum wage (with the last increase added) is of about 4 dollars monthly, and power costs are almost non-existent, the profitability of bitcoin mining is almost 100% of the amount mined. That is why officers of the Bolivarian Intelligence Services pursue miners individually to collect a fee for letting then operate, or to take the equipment under threat.
There is a high demand for bitcoin miners and GPU rigs to mine other currencies. And when there is a need, there is a provider. Most miners bring their rigs from overseas with contacts in the United States. The problem is that, even when president Nicolas Maduro declared cryptocurrency mining legal, most mining equipment is being retained in customs or taken without their owner consent. Some owners have been detained under the charge of electricity theft and fraud. The only way of passing a miner through customs is by bribing officers or having deep contacts. Below, some tweets show what we explain.
“I have been trying to sent mining rigs to Venezuela, and couriers said that miners are being detained in customs. Why is this happening”
“The regime forbids mining rigs imports”
Miners in Venezuela try to keep a low profile. They are mostly tech-savvy mid class young men who saw in bitcoin mining a way of earning money doing what they want to do. “Eliecer” (a pseudonym) lives in the capital of Venezuela, Caracas. He supports his family mining bitcoin with 2 Antminer’s T9, that yield a benefit of $400 dollars monthly, about 100 times the minimum wage.
President Nicolas Maduro encouraged the registry of bitcoin and other crypto-miners, who would have to turn on their info to the state. Most miners felt uncomfortable with doing that. There are no statistics about it, but there are estimations that more than 90% of miners are unregistered, due to the fear of having their equipment taken by the state. Sadly, the most effective protection of a miner is his secrecy. This source elaborates on this issue.
The truth is that even with the latest slump that hit bitcoin the first quarter of this year, bitcoin mining keeps being profitable in Venezuela. And, being a miner here is a dangerous and profitable adventure. One adventure that can make you rich, or take you to jail.