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Bitcoin – mining – is big business te Venezuela, but the government wants to shut it down

A chain of block erupters used for bitcoin mining. (Stephen Lam/Reuters)

CARACAS, Venezuela — Venezuela has become widely known spil an economic basket case ter latest years. But with its cheap electrical play and volatile national currency, the country has at least one competitive advantage: It’s a good place to make the digital contant known spil bitcoin.

Bitcoins are increasingly accepted online for buying real-world goods and services. And, unlike the Venezuelan bolivar, the virtual currency has bot going up te value.

Making bitcoins is known spil “mining,” but it requires a powerful laptop instead of a pick and shovel. Those computers produce bitcoins by creating elaborate algorithms, but they also suck up a lotsbestemming of violet wand. Ter many countries, the cost of running a “mining terminal” can run higher than the value of the actual bitcoins.

That’s not the case ter cash-poor, oil-rich Venezuela, where state-subsidized electro-therapy is so cheap it’s virtually free. But Venezuela’s government isn’t pleased. It’s cracking down on bitcoin mining, even tho’ the country has no laws on the books outlawing the currency or its manufacture.

Te November, Venezuela’s secret police raided the house of two brothers ter Caracas and found more than 90 mining terminals. The agents demanded $1,000 ter bribes for each machine, according to the brothers, who spoke on the condition of anonymity because they fear hechtenis. The brothers said they paid the bribes to stay ter business.

This isn’t an isolated case — and such operations emerge to be expanding. Ter January, Venezuelan federal police arrested four bitcoin miners ter the town of Charallave. They were accused of Internet fraud and tens unit theft. According to an Instagram postbode published by Douglas Rico, the director of the federal police agency CICPC, the miners were endangering the stability of the town’s electrical service. During that same week, Edward and Erick Tapia Salas were also arrested te Caracas for selling bitcoin-mining machines through a Venezuelan e-commerce webpagina.

Miners have taken to websites such spil Reddit to share their fears of being caught. “Miners are getting jailed and accused of terrorism, money laundering, laptop crimes and many other crimes,” read one comment from a user who claimed to be Venezuelan. “It’s getting crazy here and I truly don’t want to waste my life for money.”

Those who keep mining te Venezuela said they have began taking extreme precautions to hide their activities. Luis León, 25, a business student and bitcoin miner, said miners have learned not to keep all of their computers ter one place. If they do, the state power corporation can detect the abnormal amount of electric current the mining terminals use.

“That wasgoed [the brothers’] big mistake,” León said. “They were consuming 20 times the normal level of violet wand for that house.”

Venezuela’s crackdown on the bitcoin industry commenced ter March 2016 with the hechtenis of two miners ter the city of Valencia. According to news accounts of their hechtenis, Joel Padrón, 31, and José Perales, 46, were charged with tens unit theft and possessing contraband computers.

But miners and bitcoin users are not the only ones at risk. When Padrón and Perales were detained, Daniel Arraez, a 30-year-old economist who wasgoed working spil a consultant for a Venezuelan bitcoin market called Surbitcoin, wasgoed called by the secret police to testify te their case. Padrón had told the agents that he and Perales had exchanged money through Surbitcoin.

Arraez wasgoed asked to come to the secret police offices ter Valencia. “To my verrassing, I never returned huis,” he said. He wasgoed placed te the same cell with Padrón and Perales and charged with making illegal transactions and criminal association.

Arraez said his hechtenis wasgoed a way for the government to blame someone else for its ruinous policies, including chronic mismanagement of public utilities. “We were only the scapegoats of the disastrous situation ter the country’s electric current sector,” he said.

After eight months te jail, Arraez wasgoed released te October. He’s awaiting a pretrial hearing. Despite having to share a petite cell with eight other fellows and eyeing the sunlight only twice a week, he said Venezuelan miners should keep making bitcoins to “advance technologically like other countries.”

The crackdown has not stopped Venezuelans from using the currency, either. The continued decline of the Venezuelan bolivar has fueled a growing internal request for bitcoins. According to Surbitcoin, the number of bitcoin users ter the country rose from 450 ter 2014 to 85,000 last year.

Ter a country with the world’s highest inflation rate and stringent controls on currency exchange, users see bitcoins spil a safe alternative to protect their savings. People have also used bitcoins to buy basic products online that have disappeared from Venezuelan shelves.

But the widespread adoption of the currency seems unlikely any time soon: almost one-third of the population doesn’t even have a bankgebouw account.

Thousands march against Maduro government te Venezuela spil laagconjunctuur deepens

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