Venezuelan State Power Company Cuts Electricity to Bitcoin Miners

As a result, mining farms scheduled a meeting to negotiate with the government. However, this meeting was later canceled.

https://twitter.com/blockfolio/status/1326901423091691520?s=20

Offline Inflation

While mining rewards reach $100,000 a block, miners in Carabobo, Venezuela, won’t be seeing a dime. The Venezuelan state power company disconnected mining equipment across the state.

An informant told Criptonoticias that his contacts at Corpoelec had tipped him off before the blackout. The order to end mining allegedly came, “From above.” This informant, a local miner, chose to remain anonymous.

The miner says that managers at the state power company explained that all mines in Carabobo would be shut down. Starting the weekend of Nov 7, 2020, all mines in the province were offline.

While miners, in theory, are anonymous, the Venezuelan government has a register of all miners in the nation. Nonetheless, unregistered miners exist, though the government has managed to detect their activity. The informant didn’t know whether unregistered miners were affected.

Additionally, the reason for the miner shutdown was not apparent.

Venezuela publica una nueva regulación para la minería de #criptomonedas y un polémico Pool de Minería Digital Nacional ha sido creado 🇻🇪⛏️ #bitcoin https://t.co/ikS1gsSRWe

— BeInCrypto Español 🗞 (@beincrypto_es) September 23, 2020

Emergency Bitcoin Miner Meeting

As a result of these events, the Ministry of Popular Power for Electric Energy and the Sectoral Vice Presidency of Public works scheduled an emergency meeting. The consortium was to take place on Nov 12, 2020, in Caracas, the Venezuelan capital.

The meeting would host negotiations on electricity costs in the region. It was to be an interface between miners and the government. One subject for discussion was the creation of a National Digital Mining Pool.

Following this announcement, the informant released a letter urging his fellow miners to show up in numbers at the gathering, saying there would be strength in numbers. Unfortunately, the meeting was suspended for unknown reasons.

Petro, Petrol

Venezuela, which has a socialist government, has had a mixed relationship with cryptocurrencies.

Crypto mining is legal in Venezuela, but miners need to apply for a license with the Comprehensive Registry of Miners (RIM). Miners and Government officials are in talks regarding national digital mining pools. In 2017, CoinShare ranked Venezuela as one of the top 10 countries contributing to the Bitcoin hashrate.

On the other hand, crypto has become a significant issue in the troubled country. Venezuela, which sees most of its industry from oil, has had runaway inflation for several years.

This has led citizens to stack bitcoin and other cryptos. Despite their obvious volatility, cryptocurrencies don’t suffer the extreme inflation of the Venezuelan bolivar.

Attempting to cash in on this craze, the government created the “Petro,” a digital currency in 2017. The government planned to back this currency with oil reserves. However, the Petro never gained traction, and Venezuelans have flocked to bitcoin instead.