In recent years, cryptocurrency mining has gained popularity around the world, but in Venezuela, this activity has faced unique challenges due to the electricity crisis that affects the country, and this is not the first time I talk about the subject, as I have previously written other articles where little by little we saw coming this decision that has been recently taken in my country on the subject of Crypto Mining.
Today I want to show you my personal opinion on how the ban on cryptocurrency mining in Venezuela is related to the energy crisis and what may be the impact this may have, both on people and on the Crypto economy within the country, I hope you are ready to start reading and thank you very much for being here one more day supporting my content.
Image by Karolina Grabowska - Edited in Photoshop CC
Table of contents for this article:
♦️ The Energy Context in Venezuela
♦️ Cryptocurrency Mining and Energy Consumption
♦️ The Prohibition and its Reasons
♦️ Impact on the Economy and the Population
♦️ Future Perspectives
The Energy Context in Venezuela
Venezuela has experienced a series of recurring blackouts since 2019, which has significantly affected the daily life of us as residents and economic activity without a doubt. The country's electrical infrastructure has been under constant pressure due to the high demand for energy and the lack of investment in maintenance and updating of equipment, and the latter is very important, tell me something, how do you plan to maintain an electro service when you do not improve the equipment that generates it and much less do maintenance on them, an easy answer would be to say that, we cannot have a good electrical service if we do not invest in improving or taking care of it.
Just that is what is happening in our country, and we currently live in a world where electricity is vital for all types of people and all types of work you do, all content creators who are here in HIVE and we are Venezuelans know how complicated this issue of light is, because sometimes we are excited about creating something on our computer, and out of nowhere we remove the electric service and we have to wait up to 4 hours or even more for it to return again ....
This is really frustrating, but I can say that many of us have become accustomed to the fact that this is something that happens constantly here, so the day they do not remove the electric service is something strange to see, and I explain all this to put you a little in context of what is happening here.
Cryptocurrency Mining and Energy Consumption
Now let's talk a bit about cryptocurrency mining, especially Bitcoin mining, which requires a large amount of energy to solve complex mathematical algorithms and verify transactions. Mining farms use thousands of specialized devices that run 24/7, now that you understand a little bit and in a very superficial way how mining works, you can understand that it requires some fundamental things like:
♦️ Mining equipment in good condition and high power.
♦️ An adequate space to have such equipment.
♦️ Operation 24 hours a day, 7 days a week.
♦️ Continuous electrical service to be able to work.
Where do you think the problem lies here, an easy question to answer and that by itself gives a logical answer, and yes, it is about electricity. In Venezuela, where electricity is relatively cheap, cryptocurrency mining became an attractive option for many people, and when I say for many people, I mean a certain select group which has a good investment capital to buy everything necessary to install a productive mining farm, here that is a very profitable option compared to other countries where the cost of electricity service is much higher than in Venezuela, in this way Venezuelans would be mining the same amounts of cryptocurrencies, for a much lower cost of electricity.
The Ban and its Reasons
Having said the above, the Venezuelan government has recently announced an official statement in which, it has banned cryptocurrency mining as part of a broader effort against (corruption), this is the definition they have given to it since according to them, now Crypto mining in a Corruption, this is something I do not agree with, The measure seeks to regulate the excessive consumption of energy and guarantee a stable electric supply for the population, in a few words, The government is insinuating that the wear and tear or bad electric service in Venezuela is due to Crypto mining, and if you remember a little bit everything I have commented above, surely you have a totally different vision and you will understand that $BTC mining has nothing to do with bad electric service What do you think about this? .
It is important to remember that these prohibitions had been coming little by little for some time, first with the temporary suspension of SUNACRIP, after that they began to seize mining equipment such as the 800 mining equipment that they seized in the State of Monagas, and about that I wrote an article which you can see here: 800 Cryptocurrency Mining Equipment Seized in Venezuela.
After that, the crypto called PETRO was eliminated, a crypto which was linked to the value of the most exported raw material by Venezuela, such as Oil, an idea that did not work and ended up eliminating the use of such currency, and now we have received a direct prohibition, it is now official, YOU CAN NOT HAVE A MINING FARM IN VENEZUELA.
Impact on the Economy and the Population
This undoubtedly is a complicated issue to address, but I do it in a neutral way, and only from my point of view, but I would say that this is not the solution that should have been taken to solve the electric service in Venezuela, the most obvious solution was to invest in the improvement of the equipment or power generating plants, but the ban may have a mixed impact on the economy and the population, on the one hand, relieving the burden of mining farms could help stabilize the national electricity supply, and I say COULD, as this is not the only thing that influences, but I admit that it can alleviate a little. On the other hand, some citizens have lost an important source of income, especially in a country with an economy in crisis where Cryptos are a great outlet, and now people who were engaged in Crypto mining have lost their jobs and will have to dedicate themselves to something else.
Maybe Crypto mining in my country can become an activity that will continue to be done, but illegally or more hidden from the view of the national government, let's say that now a mining farm will become a farm or Cocaine plantation so to speak, because the degree of illegality is something similar that can be punishable by imprisonment.
Future Perspectives
I do not have a future perspective, I am not a fortune teller to know what may happen from here on, but the only thing I do know is that this was not a recommended move, and that this was not the best way to solve the electricity issue, I will only end this article by saying that; bad decisions have repercussions and it may not be instantly but in the future.
Thank you very much for making it to the end of this article, it was a pleasure to write for you to read and it will be interesting to know what your opinion is in the comments, happy start of the week to you.
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