News in Review
Electricity theft is not something new in Venezuela, as a 31-year- old was arrested and jailed for three months back in 2016. That may have been the first but certainly not the last case of such theft. The Venezuelan police force took action to fish out four Bitcoin miners in a town called Charallave, who were claimed to have engaged in electricity theft and internet fraud on the 24th January 2017. Among the four arrested suspects, were three men and one woman, who were identified as Alberto José Zapata Orta (23), Ana Cecilia Farias Villanueva (25), Kevin David Ojeda Díaz (26), and Nestor Raphael Amundaray Priscilla (53).
The arrest of these four suspects is also unusual because they were mining bitcoins. At the time of their arrest they were running 300 mining units which affected the electricity usage of others dramatically. It is not yet known, how the law will deal with them.
The news as announced by Douglas Rico, who’s the director of the Cuerpo de Investigations Científicas Pen ales y Criminalisticas (CICPC), a federal police agency, on his Instagram feed stated that, the suspects engaged in the selling of Bitcoin mining computers in Cucuta, the biggest city in Norte de Stander, near the Venezuelan border, with a population of 721,398. Cucuta has been a place where Venezuelans go to trade dollar and Bolivar, flouting the government currency control.
As captured by Rico, these miners have also affected the consumption and stability of electricity usage in the town of Charallave. 300 mining terminals were impounded by the authorities, according to a Venezuelan bitcoin news website known as Criptonoticias. Venezuela has a high usage of Bitcoin, as most of the Bitcoin users use it for various online transactions.
High Usage of Bitcoin in Venezuela
The imposition of capital control for the past decade has seen the country enjoying free electricity, which has caused the rise of Bitcoin mining in the country. Hyperinflation appreciates the foreign currency in relation to the domestic currency, and Venezuelans have to take the run to mine Bitcoin in other to take advantage of it to support their livelihood. As indicated in an earlier news story by DNM, inflation is a key factor to the rise of Bitcoin among most developing countries, as computer literates are always on the run to take advantage of the inflationary state of their economies.
It, therefore, seems to be difficult to control Bitcoin usage when macroeconomic instability is a topic of the day. The socialist economy of the Bolivian markets in Venezuela may be failing because of their prevention of the market force to allocate price. The balance between demand and supply is well measured by the price mechanism, which the father of economics; Adam Smith, referred to it as the market force. It is likely that the economy will collapse when policy makers overlook this force in the market system.
There may be an attempt by the Venezuelan government to control the use of Bitcoin in the country since high Bitcoin usage has encouraged online marketing, which largely affects the domestic industries. The digital nature of Bitcoin makes it impossible to be controlled, henceforth, it’s advisable to put measures in place, to appreciate the local currency in relation to the foreign currency which everyone strives to have in other to triple it in its conversion to the local currency.
President Nicholas Majuro in 2016, enforced electricity rationing programmed, after their ability to produce hydroelectric power was affected by severe drought. Venezuela experienced a severe drought which is the worst they have been for at least 40 years. They measured a rainfall 50% to 65% lower than the normal record, according to the Venezuela’s ministry of Electricity. This accounted for shortages in staple products, food, and medicine.
Inflation Forces Venezuelans to Look for Value Elsewhere
Venezuela’s economy has been crippled by hyperinflation, as there was an 180.9% rise in its price in the last two years. This was the highest recorded inflation rate in the history of the country. A report by the “Living Condition” suggested that almost three million Venezuelans ate less than two meals per day. This may be caused by the persistent increase in the price of commodities, which reduces the purchasing power of the people.
This is why citizens are turning to alternative means of money. It is easy to learn more about the opportunity to bitcoin mine on the internet. Some darknet sites are even dedicated to making it the readers mission to find out more about mining. One could venture off to Blockchain Wallet or RsClub Market and find out all they need to get started.
Socioeconomic retrogression forces people to find alternatives and this is where bitcoin comes into the picture. According to a similar survey in 2015, there were few shares of goods in the various markets to purchase, and as a result, people had to form a long queue to purchase them, and under this condition, a sale of preference comes into the picture.
This is one of the contributing reasons for bitcoin mining, bitcoin trading and bitcoin market involvement. Individuals are forced to find new means of feeding their own families. However, without proper regulations in place, more electricity theft may be on the rise in Venezuela amongst the bitcoin mining community.