Venezuela bans crypto mining in state-owned housing, says mining causes electricity crisis

Mining operations in state-owned housing has been banned due to their high power needs. Critics blame electric failures on Venezuelan authorites instead.

By · Jul 18, 2020 . 4min read

Source – Freepik

The Venezuelan government has announced recently that it has banned cryptocurrency mining. The ban, however, only applies to state-owned houses. The government initiated the Gran Mision Vivienda (Great Home Mission). This is a response to the growing economic crisis in the country.

The Minister of Habitat and Housing, Ildemarro Villarroel, stated in his announcement that crypto mining is consuming too much electricity. He says that one mining operation could affect the electricity supply of an entire neighbourhood. The issue became extensively crucial after the nation wide electrical shutdown in 2019. The critics point out that the government has done a mediocre job in improving the local electricity supply system .

Many involved in the crypto space in Venezuela have pointed out that mining operations are not the cause for the power failures in the country. They have blamed the government for it’s incompetency instead.

Due to the economic state of Venezuela, many in the country have turned to crypto as an alternative currency. The Venezuelan Bolivar has been devalued drastically due to the hyperinflation that the currency is experiencing. Economists from Venezuela believe that the crisis is worse than that of the Great Depression and the Zimbabwean Hyperinflation Crisis.

Crypto mining is technically legal in Venezuela, but those interested are required to obtain permits. Earlier this year, the government seized 315 Bitcoin from the owners of illegal mining rigs. There is reportedly an issue of extortion that miners face at the hands of local authorities. This likely has nothing to do with the legal status of their operations.Moreover, the local officials are simply engaging in theft under the semblance of controlling illegal activities.

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