Venezuela seeks to leverage cheap power to ride cryptocurrency wave

Economically devastated Venezuela has one edge in the fiercely competitive field of crypto-mining: incredibly inexpensive electricity. Venezuela, a country plagued by economic insecurity and a high unemployment rate, has power costs as low as 0.06 cents per kWh, making crypto mining highly profitable. Also, the rate of inflation has risen to over 3,000%.

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In spite of the volatility associated with virtual currency, some people are ready to risk everything on this technology. While the allure of quick money is luring Venezuelans into the mining industry, not everyone can work as a miner in the South American country, where the minimum wage is around $10. Many people do not have the financial means to put together the required equipment to mine cryptocurrency.

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Mining is a method of earning cryptocurrency by solving hard mathematical problems using powerful computers. The high use of power and the high cost of machinery, on the other hand, are difficult to overcome. Mining is a legitimate and well-regulated business in Venezuela, according to Sunacrip, the country’s legal cryptocurrency watchdog.

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All of these elements appear to be combining to produce an environment that appears to be favorable to the creation of a digital economy, allowing several Venezuelans to escape the country’s grave condition. While most Venezuelans cannot afford to own and run a mining operation, there are alternative methods to generate money in crypto with a lower barrier to entry. Axie Infinity, a play-to-earn game established in 2018, has enabled some Venezuelans to invest and provide scholarships to others who want to make money while playing the game.

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Venezuelan President Nicolas Maduro introduced the ‘Petro’ cryptocurrency in 2017, claiming it will be used to circumvent what his administration dubbed the United States “financial blockade” of the nation. Despite Maduro’s efforts to expand its usage, it has failed to gain consumer or investor trust.