Cheap electricity ushers crypto mining boom in Venezuela paves way for digital economy
The cost and journey of mining activities in Venezuela
Mining is a way of earning cryptocurrencies by solving complex mathematical problems with the help of high-powered computers. The huge consumption of electricity and expensive machinery are challenging to overcome though. In the case of Venezuela, mining is a legal and well regulated activity, as established by Sunacrip, the country’s legal cryptocurrency watchdog. According to Sunacrip’s guidelines that came into force in November 2020, investors have to comply with a series of regulations, which makes mining legally acceptable. Sunacrip had duly acted on this situation and curbed the questionable visits by the authority.
The mining cost, however, proves exorbitant for Venezuela with minimum wage below $10, as each machine costs almost $400. The miners have to adapt to the power infrastructure and make repairs in case the mining price increases. Power outage is another grave concern. In August, power supply was disconnected by the authority due to massive consumption for mining.
Rising Crypto activity favours digital economy in Venezuela
Venezuela has also seen a steep surge in unemployed people turning crypto gamers for money by playing crypto based game Axie Infinity. The game has become immensely popular in the country and a number of academies are now offering scholarships to play the game. Scholarships are another way to start playing this game, which is otherwise costlier to purchase at $1500. Besides, the growing number of Bitcoin miners due to low electricity cost are also facilitating rapid penetration of the crypto-based economy. These economically thriving activities are paving the way for the emergence of a digital economy in Venezuela.
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