Mintme News


Cryptocurrencies against world economic crisis

Feb 22, 2020

“Cryptocurrencies serve as an independent global currency, whose existence keeps government and banking overreach in check.”.

Venezuela, despite being a very small country in comparison to its neighbor country “the big” of Latinoamerica Brazil it has become quite popular among the crypto-community and it keeps being the first country in Latinoamerica with the title of the highest crypto trading country, trading more crypto than larger countries like Australia, Canada, and India combined.

It would always seem like a terrible forthcoming, knowing that hyperinflation and leadership crisis has brought such poverty and necessities of all kind to the Venezuelan families, more especially to those of scarce income and lower social status. Yet, talking about cryptocurrencies brings a dim of light to a terrible situation, reshaping the whole economic view with a new perspective.

Venezuela’s economy has been in a downward spiral for years, with extremely tight capital controls, limiting citizens from acquiring any foreign currency, even freezing bank accounts with transactions of more than 50$. Suffering Hyperinflation of 1.698.488% by the end of 2018 and reaching 7.374,4% in 2019 becoming the country with the highest inflation in history. Then, within this whole mess, it is funny to mention that it has been the government itself the one who encouraged crypto mining.

Maduro, the dictator behind the crisis of the South-American country said that he wanted universities across Venezuela to set up mining farms and approved resources “for the installation of student mining farms in the country’s universities,” according to the Minister for University Education, Science, and Technology, Hugbel Roa. Installing such schools, of course, for free.

This is probably one of the secrets behind the sudden popularization and growth of the crypto community in Venezuela and Latin-America. Crypto started to have a role in the unstable political environment and the protection of citizen’s privacy. Neighboring Columbia currently has the most crypto ATMs over Venezuela which currently have only 6 ATMs, the first one nearly installed in San Antonio Del Tachira on September 10, 2019.

This is just an overview of the world of possibilities that the launch of Bitcoin brought starting 2009 and never imagined would become even bigger. Looking at how Venezuelans have taken control of their financial security with cryptocurrency, finally free of centralized custodianship, having comparatively stable assets, with full ownership of them, without the fear of government oversight.

Has a plus, the sense of freedom has also increased since when citizens flee, they can take their valuables in Bitcoin or other cryptocurrencies rather than jewelry or properties, or the dying Bolivar because of its portability and convertibility are incomparable. Despite the volatility of crypto, it stores the value of assets more consistently than hyper-inflated fiat currencies—and it cannot be easily seized, also it gives people the chance to go anywhere, without the fear of not being able to buy in a foreign country under extreme situations.

Rather than counting with the “crypto alternative” that the Venezuelan government has offered. This sovereign cryptocurrency or pseudo cryptocurrency, that is entirely centralized, where users have no privacy whatsoever or security. The government has full control over the circulating supply, the price, the ease (or difficulty) of accessing it, where it can be transacted, and they can monitor how it’s being spent. It also doesn’t have any protection against seizures, removing a key advantage of decentralized cryptocurrencies.

This is why real crypto alternatives are proving to be popular. To protect these basic freedoms of ownership and freedom of money, digital tokens with privacy features that can prevent identification of real-life identities to transactions or addresses provide an important countercheck to such creeping overreach. In a country lacking a free press, free economy or freedom of movement, privacy coins enable citizens to make their own decisions and protect their own interests and families.

Cryptocurrencies serve as an independent global currency, whose existence keeps government and banking overreach in check. It is imperative that it remains decentralized and fungible and privacy is an essential element in this. Without privacy, citizens have no guarantees that they can transact or even hold their own assets freely. And that’s a concern for more than just the population of Venezuela.

Thanks to the anonymous nature of the blockchain and cryptocurrencies it is hard to calculate exactly how many users (people) currently make transactions but The number of Blockchain wallets has been growing since the creation of the Bitcoin reaching over 44 million Blockchain wallet users at the end of December 2019. There are 153 million addresses belonging to users in the BTC base system. This number cannot reveal the actual owner count since users can maintain multiple addresses, but it surely gives us an idea of how things have been developing for the last 10 years at least.

And, as difficult as it is to even predict how many users will be included this 2020, several factors allow us to assume that the number of online money owners will rise dramatically. The fact that banks and even countries try joining the cryptocurrency fashion only proves their stability, the participant number involved in the rush will grow dramatically and you should be part of it.

By Mary Schwartz