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In some places of the world, Bitcoin has emerged as an alternative form of currency, while the rest are still attempting to manage and comprehend its extent. Venezuela is one of the few countries that has embraced Bitcoin, and it is currently developing a new industry that will mine Bitcoin using cheap electricity.
The use and impact of Bitcoin on weaker economies have been discussed far and wide. Simon Chamorro and his startup Valiu uses blockchain technology, with the vision to protect fellow Venezuelans from hyperinflation. Chamorro recently appeared in Anthony Pompliano’s podcast, wherein he shared how dollarizing Venezuela through remittances made it the second-largest remittance recipient after Mexico.
“Let’s dollarize Venezuela through remittances as a vehicle using crypto as a bridge. We realized that we could do it…immediate remittances because of the fact that it is in crypto. We can do it on stable currencies, which is stable remittances.”
Despite the benefits of carrying out cross-border transactions using crypto, it only works when the country where the user sends the money also accepts that crypto. This is the part where Valiu helps. It is also setting up businesses on its platform, which is itself backed with stablecoins.
In addition to this, Venezuela saw growth in Bitcoin mining and it was turning out to be a profitable venture. As per reports, the Venezuelan capital, Caracas generated $10,000 worth of bitcoin per month, with 80 computers at the cost of $10 for electricity.
Furthermore, Theodoro Toukoumidis, CEO of Doctorminer, which has mining operations around the country, stated that he has “discovered a technique to create cash effortlessly… converting energy into money.”
Venezuela, which projected a roughly 3000 percent inflation rate in 2020, now has an economic possibility thanks to cryptocurrency mining. According to Aaron Olmos, a crypto researcher and economist,
“Having crypto money is a way out of hyperinflation… an extra tool for confronting the crisis.”