There are countries today that are looking to stop crypto mining operations mainly because it consumes a great amount of energy. However, things are quite different in Venezuela.
Venezuela is country dealing with hyperinflation crisis, and with sanctions brought mainly by the US. A few months back, the oil-rich country decided to escape sanctions by making their very own cryptocurrency called Petro. What made Petro different is that it is backed by oil. It means that unlike other cryptocurrencies that are based on speculation, you have a digital currency that is backed by one of the world’s oil-rich countries.
Turning to Cryptocurrency Mining
In yet another bold move, the country is now turning to cryptocurrency mining in order to generate passive income. And one of the reasons why crypto mining is booming is mainly due to the energy situation in the country. Electricity in the country is almost free, though it could be sometimes spotty. It is mainly a result of the government-mandated utility price freeze.
Just to give you an idea regarding the current condition in Venezuela, it costs around 900,000 bolivars or around $0.90 to buy a pastry or even a glass of juice at a café. On the other hand, you Venezuelans can pay monthly utilities including electricity, water, gas, internet, and even phone for just around 300,000 bolivars.
Crypto mining relates to some sort of consistent income of dollars or another form of currency to the country. And if done correctly, the country can keep up with the inflation rate of around 16,000% per year.
A small mining setup could already generate $1,000/month. This can be quite a substantial amount of money in Venezuela. In fact, a family of four could already live reasonably well for around $500 per month.
In the past, remittances were considered as one of the main incomes of countries in the region including Honduras, El Salvador, and the Dominican Republic.
None other than Nicolas Maduro launched a program in order to encourage its citizens to set up their own mining rig at home. He mentioned that young individuals should be”infected with courage and set up cryptocurrency farms throughout Venezuela”. This is a program that is called “Plan Chamba Juvenil Digital” or Youth Digital Work Plan.
According to their plans, the government hopes to get at least one million students. Maduro tweeted: “Attention young people! Today Chamba Juvenil Digital emerges to allow youths to form cryptocurrency farms that can mine world currencies. Because Venezuela does not give up”
Maduro also stated that “The program was designed to help incorporate young people—including university students, the unemployed, single mothers and the homeless – into working life. It is also expected to provide employment opportunities to recent graduates”.
Issues Regarding Mining
There are several issues regarding crypto mining these days. In fact, miners are looking for places that are cold and have cheap electricity in order to maximize their income. And for this reason, places such as China and Iceland are just some of the most popular places where large-scale mining operations are found. But with minimal cost of electricity in Venezuela, not to mention the opportunity to earn foreign currencies, this could actually be a good plan for the country.