by Liam J Kelly
Before Venezuelan President Nicolas Maduro announced his interest in creating an oil-backed cryptocurrency, the country has been surviving on the value of bitcoin. While accredited investors rush to trading platforms after the release of futures contracts, Venezuelans are using the “crisis currency” to pay for honeymoons, medications for loved ones, and to keep families from going under.
Taking a Step Back
2017 has been very generous to many individuals in the Bitcoin community. Even investors who purchased the digital currency back in December 2016 would have seen a 15,000 percent increase in their holdings. Even before the end of this bull rally, we have already begun noticing the effects on people’s lives these percentage points have had.
Bitinfocharts, for instance, indicates that there are ten bitcoin addresses worth more than a billion dollars. Of the ten, it has been determined that the Winklevoss brothers may be the newest induction to the club. The two were also the first in line to develop an exchange-traded fund (ETF) in 2014.
After the individuals come the exchanges and other centralized platforms. Generally, these parties have gained popular attention, but for some different reasons. The swaths of money spun around on a daily basis is nonetheless dazzling, but they are constantly curtailing hacking attempts and security issues. The most recent attack on mining marketplace, NiceHash, saw hackers walk away with more than $60 million in bitcoin.
But there is another demographic in this ecosystem that demands our attention. After Wall Street investors, mining conglomerates, software developers, and the next ICO, there are groups of individuals who are using bitcoin to simply live their lives.
Venezuelan Crisis Currency
If you have not been following the turmoil unleashed by the previous Venezuelan government, then the bitcoin revolution underway in the country may appear far-fetched. Without this information, it may also seem crazy to find out that the leader of the oil-rich nation is looking to endorse a state-wide cryptocurrency backed by its most lucrative natural resource.
To encapsulate the economic woes of the government, consider this; some Venezuelan citizens are weighing the local currency rather than counting it. It doesn’t matter the size of the tender, just the weight of the bag.
The bolívar has suffered perhaps one of the most exaggerated cases of price inflation ever witnessed, with percentages expected to continue past 2,000 by 2018. It has led to a rash of revolutions, strains on foodstuffs, and basic healthcare needs. Naturally, citizens are looking for secure alternatives.
Surviving Government Missteps
The New York Times reported on December 13, 2017, how full stack engineer John Villar used bitcoin to purchase “His wife’s medication and to pay the employees of his startup business.” and his abandonment of the country’s failing currency:
“At this moment I don’t have a single bolívar.”
The founder of PepeCash is not alone either as many freelance workers in the country are turning to the digital currency as a form of payment. With the price of bitcoin pushing hovering at around $16,000, many Venezuelans are purchasing small portions of coins to “Build their savings.”
The increasing value of the cryptocurrency has also earned the same kind of attention in countries like Zimbabwe, Greece, and the Ukraine. More importantly, much of this attentiveness is far from speculation; these individuals are proving Satoshi’s vision of a truly digital store of value.