With the growing inflation of the bolivar, many Venezuelans are seeking alternatives to avoid the tanking national currency. One such alternative is bitcoin, according to a Washington Post report. Residents are turning to this electronic currency in growing numbers as they struggle to meet their daily needs.
The Washington Post reports that in 2014 there were only 450 bitcoin users in Venezuela. In 2016, this number jumped to 85,000. The currency is widely accepted online in exchange for goods. In the case of Venezuela, it is also a way to rebel against the Maduro government.
“Bitcoin is a way of rebelling against the system,” one bitcoin trader told Reuters in 2014.
Recently, the government has been cracking down on bitcoins, specifically on bitcoin “mining,” or the process of actually creating the currency. The Washington Post reports that two brothers in Caracas were caught with over 90 mining terminals. According to the report, the brothers were forced to pay bribes in place of arrest. A few months later, four people were arrested in Charallave for “internet fraud and electricity theft” after being found as bitcoin members.
The Washington Post reports that online communities have formed in response to these crackdowns, exposing the fears of bitcoin users.
“Miners are getting jailed and accused of terrorism, money laundering, computer crimes and many other crimes,” one Reddit user wrote. “It’s getting crazy here and I really don’t want to waste my life for money.”
The global market for bitcoin just reached $20 billion in March for the first time ever. While this is lower than the global market for more widely accepted online services such as cloud computing, which is expected to reach $79.1 billion by 2018, that total is still significant for the controversial currency.
As bitcoin spreads around Venezuela, however, the currency will likely reach its limits. The Washington Post points out that nearly one-third of the population does not have a bank account, making it tricky for bitcoin to truly spread nationally.