Number Of Bitcoin Miners In Venezuela Swells To 100,000

Venezuela’s worsening economic collapse has created something of a social experiment in the use of a digital currency as a de facto currency - a phenomenon that’s also playing out in troubled Zimbabwe.

According to, bitcoin adoption in Zimbabwe is seemingly skyrocketing as the country’s economic situation looks bleak. So much so, that one bitcoin is trading at nearly $10,000 on the exchange, while the global average is, at press time, of $5,642.00.


According to a local trader, bitcoin isn’t just being bought by individuals, but by businesses with bills to pay. The country adopted the U.S. dollar back in 2009 as its fiat currency, as the Zimbabwean dollar had lost nearly all its value.


At press time, LocalBitcoins Zimbabwe has people buying bitcoin at the global average, and some buying the cryptocurrency for cash for well over $10,000 in the country’s capital. Bitcoin, as every bitcoiner would expect, is helping people in the country survive times of economic uncertainty, as Zimbabwe has been embroiled in a crisis for years.

And as inflation in Venezuela has spiraled further out of control - by one estimated, it peaked above 2,400% in September - more Venezuelans are resorting to mining bitcoin, litecoin and other digital currencies as a means of coping with the country's out-of-control hyperinflation and surviving in a country where staples like food and medicine are scarce.

"Venezuela was one of the richest per-capita nations in the world... but now, hyperinflation is a very difficult thing to understand until you have to buy lunch..."


"The country has not yet dollarized...  but there's not enough dollars in Venezuela for that to have happened..."


"Venezuela is becoming a cashless society... we are starting to see in Venezuela, the first bitcoinization of a sovereign state."

However, while cryptocurrency mining isn’t explicitly illegal, the country’s Sebin intelligence service has been known to raid establishments that show a suspicious spike in electricity usage. Electricity is heavily subsidized by the state in Venezuela, making mining a particularly lucrative prospect, despite the risks.

Bitcoin mining consultant Randy Brito estimates that about 100,000 Venezuelans are "mining," although it is impossible to have an exact figure because many are protecting themselves by using servers in foreign countries, AFP reports.

According to the LocalBitcoins portal, transactions in bitcoins amounted to $1.1 million in Venezuela in the last week of September.

One local who spoke with AFP said her mining rig is producing 20 to 25 litecoins per month.

"Each litecoin is worth $46, that's $920 a month," said Veronica - a fortune in a country where the minimum monthly salary is 135,543 bolivars ($40), supplemented by a voucher of 189,000 bolivars ($56).

AFP visited one office building in Caracas that has been converted into a clandestine mining operation, with more than 20 computers hard at work performing the cryptographic calculations necessary to unlock valuable blocks of digital currency.

Caracas (AFP) - Inside a locked room in an office building in Caracas, 20 humming computers use their data-crunching power to mine bitcoins, an increasingly popular tool in the fight against Venezuela's hyperinflation.


In warehouses, offices and homes, miners are using modified computers to perform complex computations, essentially book-keeping for digital transactions worldwide, for which they earn a commission in bitcoins.


While practiced worldwide, Bitcoin mining is part of a growing, underground effort in Venezuela to escape the worst effects of a crippling economic and political crisis and runaway inflation that the IMF says could reach 720 percent this year.


Having no confidence in the bolivar and struggling to find dollars, many Venezuelans, who are neither computer geeks nor financial wizards, are relying on the bitcoin - currently valued around $6,050, or other virtual currencies.

As international sanctions have left Venezuela starved for foreign currency, cryptocurrencies have provided one crucial means for the regular people of Venezuela - who arguably have been hardest hit by the sanctions despite marching in the streets and calling for the overthrow of the regime of President Nicolas Maduro - to avoid the consequences of the administration’s economic mismanagement. Now, the question is will Venezuelans abandon the worthless bolivar in favor of relying solely on digital currencies.

As we noted previously, one trader, John Villar, Caracas-based software developer, most eloquently stated "Bitcoin is a way of rebelling against the system." While the currency remained a niche form of payment in the country, many users purchased food and goods online through online marketplaces such as, albeit indirectly through gift cards purchased with the cryptocurrency.

Noel Alvarez, former president of the Venezuelan Federation of Chambers of Commerce, stated that “A maximum of one per cent of the population has access to it, but it is very useful in our situation.”

Bitcoin’s popularity in Venezuela continued to grow. It became the country’s leading parallel currency. Some vendors even begun accepting Bitcoin exclusively. A popular online travel agency, Destinia, cited that, due to the bolivar’s instability and the trouble many Venezuelans experience when attempting to leave the country, “Giving priority to Bitcoin as a payment method could be of help."

While Destina admitted that Venezuela is not a primary focal point for their company, they chose to prioritize Bitcoin payments in the Venezuelan market to facilitate the travel needs of the people in light of the persisting economic downturn.

With infrastructure in place, trading and mining becoming more popular, and the crisis escalating, Maduro’s government began to take notice.

Maduro’s War on Bitcoin

The Venezuelan government began to crack down on the Bitcoin community, with police extorting citizens for “misusing electricity” or undermining the country’s economy. These grievances intensified over time, however, and the attack on miners became more apparent. In the largest raid, two miners were caught with 11,000 mining computers and were charged with cybercrime, electricity theft, exchange fraud, and even funding terrorism.

In Feb. 2017, following the incident, Surbitcoin, Venezuela’s most popular exchange went offline. The company encouraged users to withdraw their money immediately as Banesco, the company’s banking partner, was set to revoke the account associated with the exchange. Rodrigo Souza, the founder and CEO of Surbitcoin, noted that "When it was found that there were 11,000 mining computers consuming the energy to power a whole town at a time when there are severe electricity shortages, it triggered a reaction.” Souza went on to say that the company was not contacted by the government, but Banesco revoked their account as it did not want to be associated with such an operation. Surbitcoin resumed operations two weeks following.

We suspect it will not be long before Maduro takes further, tougher action against this 'subversive' behavior.


I_rikey_lice Sun, 10/22/2017 - 21:23 Permalink

I'm surprised the greenies and environmentalists aren't protesting all the energy being wasted "mining" cryptos. Maduro gets it and should be commended for his actions.

animalspirit Oldwood Sun, 10/22/2017 - 23:22 Permalink

Actually, it is a software algorithm that "prints" the money.  Each block (which are appended to the block chain, one approximately every 10 minutes) gets a 12.5 BTC award subsidy (which is worth, currently, ~$75,000).  The mining hardware is essentially trying to guess a number that allows it to be the miner who can spend the BTC awarded for that block.So even if there are more mining hardware machines added, the issuance is roughtly the same ... 12.5 BTC every 10 minutes.   It used to be 50 BTC every 10 minutes, but the software schedules in a "halving" decrease every four years, so in 2012 the first halving resulted in a 25 BTC per block subsidy, and then in 2016 the rate reached the current 12.5 BTC per block.  

In reply to by Oldwood

chuckymcgee animalspirit Sun, 10/22/2017 - 23:30 Permalink

Right. Bitcoin's basically deflationary, with fewer and fewer coins to be mined over time until a 21 million coins cap is reached. Of course millions of coins have probably already been lost, so we'll never really see the full 21 million in play. With so few coins, just a small percentage of the world wanting a single coin will drive the prices sky high. Wait until there's a real crisis where normies are panicking and see what happens to the price of Bitcoin.

In reply to by animalspirit

rccalhoun chuckymcgee Sun, 10/22/2017 - 23:54 Permalink

the halving is 4 years out BUT the hash rate goes up about 15%/month---so every 6 months or so it takes twice the effort (hash rate) to get the same block award (shared amongst a pool of miners).   next 6 months is easy picking if you have the properhardware up and running.   you cant buy the hardware--sold out.  because there is this 6-12 month or so window where the bitcoin price far exceeds the hardware + electricity + hash rate difficulty. 

In reply to by chuckymcgee

any_mouse rccalhoun Mon, 10/23/2017 - 03:37 Permalink

There is an specialized outfit that builds mining systems. Normal payments systems are accepted.

However, if you want to buy a GPU from them, you can't use Visa or AmEx, they will sell a GPU only for Bitcoin.

Karl Malden would be shocked, shocked, I say.

Newegg GPUs are limited to two units per order and they go fast.

In reply to by rccalhoun

Uchtdorf abyssinian Mon, 10/23/2017 - 03:56 Permalink

Think about it this way:Who is in the military and police departments all over the country? Yeah, sure, some ranking officials well-connected to Maduro who know quite well where their paychecks come from are at the top. However, most of the rank and file are from the lower and middle class portion of the population. It is their families which are suffering the most. I bet most of them have their hands on some guns and they know where the bullets are stored. There are roughly 32 million Venezuelans. Killing the most corrupt and politically-connected would require perhaps 2 million bullets. If they, the soldiers who came from among the poor, can't get the job done in 2 million bullets, they've got bayonets.They have to be careful of course that they don't insert into power another regime worse than Maduro's, but that Marxist is so bad  an outcome such as that is highly unlikely.

In reply to by abyssinian

HRH Feant2 Yellow_Snow Sun, 10/22/2017 - 22:12 Permalink

There is this Utube channel I used to watch. Guy shows novel ways to catch rats and birds with common items. I was looking for a way to deal with vermin control. The guy that posts all of the different ways to catch rats? They eat them. Asian Utuber, here's a link to the first video I watched and he is still making videos! 170K subs, too. Guessing the area is tropical with limited refrigeration. In those situations it is smart to learn how to trap live animals. Kill them only when you plan on eating.

Plenty of pigeons, raccoons, possum, squirrel and yes, Norway rats, in my area. I am a pretty good cook. With a few spices, garlic, onion, and chilies I can make anything taste good.

In reply to by Yellow_Snow

HRH Feant2 espirit Sun, 10/22/2017 - 22:54 Permalink

I know how to make gravy, dammit! And sammich's!

Got a stash of MREs that have enough chemicals in them to last 20 years.

Couple other Utuber channels I like are guys that eat old MREs. Interesting stuff. Oldsmokey and Steve1989MREinfo are the best!

I am a long time prepper. Eating rats is not my idea of dinner but I don't plan on starving, either. If I have to eat the local wildlife, I shall. Gonna be a pain in the damned butt, for sure. But I like being alive. I like food. And I had a grandma that was one helluva cook!

I remember her killing the chicken for Sunday dinner. Baking fresh bread and rolls. Lemon meringue pie using fresh lemons from the orchard outside and meringue from fresh eggs gathered that day. (My grandparents moved to Commifornia from Maine to make sure my asshole father didn't screw up their daughter's life, too much. They rented an amazing little house in the middle of some lemon and orange groves. Cute as heck. Like something from Maine with pine paneling and everything. Grandfather built the chicken coop).

Gravy mixes! You crack me up! Always good to have a good laugh. My grandma loved to laugh. She used to make little stuffed frogs from fabric scraps and quilt leftovers. Sat them on the shelf. You flipped it over and she had made them anatomically correct. She always got a kick when people picked them up and realized, OMG it's a boy frog and a girl frog! Country folk know how to survive!

In reply to by espirit

HRH Feant2 Volkodav Mon, 10/23/2017 - 00:05 Permalink

It is my understanding that it is best to properly skin and clean an animal, first.

Second are brines and treatments that can be applied to raw meat, such as milk, buttermilk, salt brines, and vinegar brines.

Third, best to cook with aromatics and herbs and spices.

Smoke and char can also add to the flavor and taste of meat along with sauces.

I do like Tabasco sauce. The older MREs had mini bottles. I like the habanero Tabasco. The plain isn't hot enough for me anymore.

In reply to by Volkodav

HRH Feant2 Mustafa Kemal Mon, 10/23/2017 - 01:29 Permalink

I grew up between two ages and from a family that talked and told stories ove the dinner table and in the evening.

I don't know anyone my age, other than Amish or Mormons, that know how to sew, cook, tat, crochet, embroider, crwel, macrame, and cross stitch.

Compared to my grandmother I lost many skills. I don't knit. I don't quilt (by hand). Never killed anything in my life. Ever.

Compared to my grandmother I am a weakling. When I compare myself to other people my age I don't know what to say. Tatting? When was the last time you met someone under the age of 90 that knew how to tat?

In reply to by Mustafa Kemal

HRH Feant2 overbet Mon, 10/23/2017 - 01:44 Permalink

Good to hear! Neighbor of mine catches at least one Norway rat a week.

If he tried harder he could probably catch one every day.

Most people remain ignorant of the inherent rat population.

Problem with eating suburban rats is I would assume they have a heavy glyphosate load. I don't use that crap on my back yard. Weeds don't bother me. Glyphosate does. Scary part about suburban living. All those perfect lawns. There is going to be a day when people start ripping them up. Even in places like where I live. They will be desperate to grow food.

Most of my neighbor's don't realize I interned on an organic farm for a summer. Two acres, full vegetable production and CSA with 16 families that subscribed. I would get the bags together and put them at the end of the road for folks to pick up once a week. Totally seasonal what people got in their bags. If we had a lot of it they got a lot of it. Picked and washed that day.

I have had a lot of hard fricking jobs in my life, that summer was the hardest work I have ever done. Picking 50-foot rows of bush beans, thinning 50-foot rows of beets and carrots by hand and on your knees, transplanting lettuce. Oh give me a fucking break! I left that summer and never looked back. There is no way in hell I would be an organic farmer! That work made training horses and being in the military seem easy.

Anyhow, thanks for the good word about rats being edible. Watch that Utube channel. Khmer makes it all look easy! Guessing, based on the Utube handle, the guy is in Vietnam or Laos.

In reply to by overbet

I_rikey_lice Yellow_Snow Sun, 10/22/2017 - 22:58 Permalink

11,000 mining computers .... These are not starving peasants. They are wealthy individuals. Nobody is going to get caught if they only have a few computers mining to buy some food. Greedy fuckers tried to game the system with their money printing machines powered by subsidized electricity and got caught. They got greedy and now they are fucked.

In reply to by Yellow_Snow

HRH Feant2 Sun, 10/22/2017 - 21:25 Permalink

I am not a miner but I am a trader. I think this is great. People are finding a way to do an end run around controls that are dysfunctional. Adapting in a novel way with technology. I love it!