The noise is deafening in a building in Caracas: a number of machines “mine” bitcoins non-stop. In a Venezuela with ridiculous electricity costs, creating cryptocurrencies has become a very profitable business.
Smaller than shoe boxes and with a unit value of $ 400, nearly 80 full-time computers generate about $ 125 per month per piece of equipment. Four fans cool the space where the temperature is high.
The electricity bill? “I think not 10 dollars a month,” says Theodoro Toukoumidis shouting about the showroom of his company Doctor Miner, dedicated to installing mining farms in the country and marketing equipment.
“We discovered a way to generate passive income, transforming energy into money,” he tells AFP in his office, away from noise, in this wealthy man from Caracas.
Your company installs computer equipment for crypto mining, a process that generates a series of complex numerical sequences to mint a virtual currency and validate financial transactions.
This task requires significant processing power and therefore huge amounts of energy.
Electricity almost given away
In Venezuela, with a subsidized and practically free electricity service, mining is “profitable, because one of the fundamental variables is the cost of electrical energy,” explains Aaron Olmos, economist and university researcher in the area of crypto assets.
According to Olmos, the constant blackouts in the provinces, which dot the capital, caused by a collapse of public services, do not even make a dent.
Nor does it matter that this country has one of the lowest fixed bandwidths on the continent, barely surpassing Cuba and Haiti, according to the global Speedtest index.
“In order to mine you don’t need to have super high speed internet. You need to have stable internet,” according to Olmos.
Sell the car to enter the business
Toukoumidis and his current partner seized the opportunity. “I sold my car to buy a machine and my partner exchanged the motorcycle he had for a machine,” he recalls.
In the dining room of his house he began to assemble computers to be mined and sold to family and friends in 2016.
“They told us ‘I want one’, without understanding anything at all,” he says.
It is, however, a small group of people in the middle of the worst crisis in the recent history of the country with the highest inflation in the world. 2020 closed with 2,959.8% accumulated inflation.
The local currency – the bolivar – was pulverized, as well as the purchasing power of the Venezuelan, giving ground to the dollar.
“Having cryptocurrencies is a way out of hyperinflation, an additional tool to cope with the crisis”, highlights the economist Olmos, despite the fact that privately created cryptocurrencies are not backed by central banks.
Pedro – fictitious name – surfed inflation when in 2017 he bought two video cards for $ 800, with which you can also mine. In the third month he recovered the investment.
“What I was producing I was eating, literally. I liked” like a new computer, he remembers. If he had not spent, he takes out accounts, “$ 20,000 would have in his pocket right now.”
The government of Nicolás Maduro also ventured into the crypto world and launched the Petro in 2018, vetoed by the United States and branded a “scam” by exchange platforms on the web.
Bitcoin in Caracas businesses
Meanwhile, the popular bitcoin is accepted as a payment method, little by little, in Caracas businesses.
Transactions in this currency, according to the LocalBitcoin.com portal, generated a peak of 303 million dollars in 2019 in Venezuela. So far in 2021, $ 110 million have been traded.
In Venezuela there is a regulatory body for crypto assets (Sunacrip), created in 2018 when the activity was considered illegal. Two years later, the generation of cryptocurrencies was regulated by the Executive and Sunacrip launched a registry of miners.
Toukoumidis abides by the rules and complies with bureaucratic permits: “We have found out along the way about institutions that carry out procedures that we didn’t even know about,” he says.
Due to not having the necessary documents and permits, many continue to fall behind bars, according to specialized portals such as CriptoNoticias.
Last week, Police arrested a woman in Caracas after seizing 17 machines. In the interior of the country, seizures amount to hundreds.
For this reason, many like Pedro prefer to keep a low profile to their mining activity. “It is something (of which) it is better not to talk.”