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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 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.

Venezuelans Turn to Crypto Currency

Inflation has reached ridiculous levels, it is expected to be 1,160% by end of 2017 and 2,280% in 2018 if the government continues running out of money and responds simply by printing more money

Venezuelans Turn to Crypto Currency

Venezuela, the country that sits on the largest oil reserves in the world, is going through the worst economic crisis in its history. It is on the verge of a collapse as its economy and political situation have deteriorated. Shortages of basic goods, from food to medicine all incredibly scarce all around the country as the government massively cuts imports in a bid to save money.
Also as oil prices continued their descent and President Nicolas Maduro’s mismanagement of the country’s economy intensified, Venezuelans chose a new way to protect themselves financially—the Bitcoin.
Hospitals are running dangerously low on medicine, the public hospitals have fallen apart causing many people including infants to die because of scarcity of basic medical care. Inflation has reached ridiculous levels, it is expected to be 1,160% by end of 2017 and 2,280% in 2018 if the government continues running out of money and responds simply by printing more money, news outlets reported.
Unemployment is set to surpass 25% and the employed people actually have just meaningless salaries due to this hyperinflation.
The country is also heavily in debt with no immediate means of paying off what it owed. According to the Telegraph, around $116 billion is due over the next two decades, with a fifth of payments due in the next two years.

Crypto Currencies Popularity Rises
Protests continue to rage in Venezuela as inflation soars to unprecedented levels and the price of oil remains low. The country’s national currency is now worth less than fictional gold in Azeroth, the setting of the popular massively multiplayer online role-playing game World of Warcraft, pushing Venezuelans to bitcoin to hedge against the nation’s struggling economy, oilprice.com reported.
Venezuelans have chosen a new way to protect themselves financially.
Bitcoin has gained popularity since a long time. Between 2014 and 2016, the number of users on just one Venezuelan Bitcoin exchange skyrocketed from just several hundred to over 85,000 users. Cheap, subsidized electricity and a failing currency pushed a number of young entrepreneurs to build their own mining operations.
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 Amazon.com, albeit indirectly through gift cards purchased with the crypto currency.
Noel Alvarez, former president of the Venezuelan Federation of Chambers of Commerce, stated that “A maximum of 1% 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 began 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.

Government Takes Action
With infrastructure in place, trading and mining becoming more popular, and the crisis escalating, Maduro’s government began to take notice.
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.
On July 31, in a highly controversial election, Venezuela voted for a new constituent assembly giving Maduro even greater control in the country on the brink of civil war. The new pro-Maduro constituency will now have the power to re-write the country’s constitution.

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