The Secret, Dangerous World of Venezuelan Bitcoin Mining, by Jim Epstein. Bet you didn’t see this coming.
Four years ago, Alberto’s career prospects were bleak. The 23-year-old Venezuelan had just graduated from college with a degree in computer science, but his nation’s economy was already shredded by 13 years of socialism.
“There were job opportunities, but they paid like $20 a month…” his friend Luis recalls. Alberto and Luis — whose names have been changed for their own safety — teamed up to start a clothing business, but the venture floundered.
Then Alberto discovered bitcoin mining.
He read about it on an Argentinian gaming forum. An item posted to the site described a process of getting paid in a new internet-based currency denominated in strings of numbers and letters, in exchange for running computations on a home computer. His parents said that the whole thing sounded like a Ponzi scheme. Alberto, however, sensed that his life was about to change.
Four years later, his country is embroiled in a humanitarian crisis. The supermarket shelves are bare. Children are fainting from hunger in their classrooms. A mob recently broke into the Caracas zoo to eat a horse. Many Venezuelans subsist on a monthly government stipend equivalent to about $9.
Alberto, meanwhile, based on his own account, is earning more than $1,200 a day mining bitcoins and other cryptocurrencies. …
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. …
Since bitcoin mining is a process, in effect, of converting the value of electricity into currency, Venezuelan miners are engaging in a form of arbitrage: They’re buying an underpriced commodity and turning it into bitcoin to make a profit. The miners have turned socialism against itself. …
Like many bitcoin users, Alberto, the miner who makes $1,200 daily, imports food from the U.S. through Amazon’s Prime Pantry service.
hat-tip Matthew
