Monday, November 28, 2016

"The Secret, Dangerous World of Venezuelan Bitcoin Mining"

Reason:

But the main factor driving Venezuelans to take up bitcoin mining is a price control put in place by the socialist government: Electricity is virtually free.

Bitcoin mining requires a lot of computer processing power, which in turn requires a lot of electricity. In most of the world, utility bills eat into the cost of mining. In places where energy prices are high, it can even be a losing proposition. But in Venezuela, the government has turned bitcoin mining into something akin to owning a home mint.

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Ricardo, a 30-year-old photography teacher, is earning about $500 in monthly revenue with a rack of five mining computers hidden in a soundproofed room of his family's two-story house. His mother has chronic liver disease, and the medication she needs to stay alive is no longer sold in Venezuela. With bitcoins, he's able to purchase the drug from foreign suppliers. "Bitcoin," he says, "is our only hope nowadays to survive."

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Bitcoin miners may have unique access to foreign goods, but they also live under constant threat. Many fear they'll be discovered by the Servicio Bolivariano de Inteligencia Nacional (SEBIN), the country's secret police force. SEBIN officers hunt for bitcoin miners and then extort them under the threat of arrest and criminal prosecution.