The Secret, Dangerous World of Venezuelan Bitcoin Mining

[alyssa85]

http://reason.com/archives/2016/11/28/the-secret-dangerous-world-of

Four years ago, Alberto's career prospects were bleak. The 23-year-old Venezuelan had just graduated from college with a degree in computer science, but his nation's economy was already shredded by 13 years of socialism.

"There were job opportunities, but they paid like $20 a month, and we were used to traveling and buying things from abroad so we couldn't settle for that," his friend Luis recalls. Alberto and Luis—whose names have been changed for their own safety—teamed up to start a clothing business, but the venture floundered.

Then Alberto discovered bitcoin mining.

He read about it on an Argentinian gaming forum. An item posted to the site described a process of getting paid in a new internet-based currency denominated in strings of numbers and letters, in exchange for running computations on a home computer. His parents said that the whole thing sounded like a Ponzi scheme. Alberto, however, sensed that his life was about to change.

Four years later, his country is embroiled in a humanitarian crisis. The supermarket shelves are bare. Children are fainting from hunger in their classrooms. A mob recently broke into the Caracas zoo to eat a horse. Many Venezuelans subsist on a monthly government stipend equivalent to about $9.

Alberto, meanwhile, based on his own account, is earning more than $1,200 a day mining bitcoins and other cryptocurrencies.

...Bitcoin miners may have unique access to foreign goods, but they also live under constant threat. Many fear they'll be discovered by the Servicio Bolivariano de Inteligencia Nacional (sebin), the country's secret police force. SEBIN officers hunt for bitcoin miners and then extort them under the threat of arrest and criminal prosecution.

There is loads more in that article - it's an indepth look at the Venezuelan situation and I recommend everyone click the link above to read it.

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[Xester]

http://reason.com/archives/2016/11/28/the-secret-dangerous-world-of

Four years ago, Alberto's career prospects were bleak. The 23-year-old Venezuelan had just graduated from college with a degree in computer science, but his nation's economy was already shredded by 13 years of socialism.

"There were job opportunities, but they paid like $20 a month, and we were used to traveling and buying things from abroad so we couldn't settle for that," his friend Luis recalls. Alberto and Luis—whose names have been changed for their own safety—teamed up to start a clothing business, but the venture floundered.

Then Alberto discovered bitcoin mining.

He read about it on an Argentinian gaming forum. An item posted to the site described a process of getting paid in a new internet-based currency denominated in strings of numbers and letters, in exchange for running computations on a home computer. His parents said that the whole thing sounded like a Ponzi scheme. Alberto, however, sensed that his life was about to change.

Four years later, his country is embroiled in a humanitarian crisis. The supermarket shelves are bare. Children are fainting from hunger in their classrooms. A mob recently broke into the Caracas zoo to eat a horse. Many Venezuelans subsist on a monthly government stipend equivalent to about $9.

Alberto, meanwhile, based on his own account, is earning more than $1,200 a day mining bitcoins and other cryptocurrencies.

...Bitcoin miners may have unique access to foreign goods, but they also live under constant threat. Many fear they'll be discovered by the Servicio Bolivariano de Inteligencia Nacional (sebin), the country's secret police force. SEBIN officers hunt for bitcoin miners and then extort them under the threat of arrest and criminal prosecution.

There is loads more in that article - it's an indepth look at the Venezuelan situation and I recommend everyone click the link above to read it.

I have read some articles that the bitcoin exchange in Venezuela had failed to function since the banks are going away from them denying them to have bank transactions. The miners on the other hand if known to the public were raided by the police for unknown reasons. With this turn of events we could not tell if bitcoin mining or bitcoin usage in Venezuela will prosper.

[cellard]

Damn, with jobs as low as $20 a month, or even people surviving at $9 a month, if they had access to a signature campaign they would be living like royalty on that country I guess. I hope someone has realized the possibility of doing so.

I would like to make a documentary of underground Venezuelan Bitcoin Mining, it would make for a cool vice.com style doco, like this one:

https://www.youtube.com/watch?v=K8kua5B5K3I

[Harlot]

But the main factor driving Venezuelans to take up bitcoin mining is a price control put in place by the socialist government: Electricity is virtually free.

Luckily Alberto's Bitcoin Mining runs low cost, this would be a dream for any Bitcoin Miner as their main expense generally or all of the time is electricity. With this Alberto can almost have a 100% of what he is earning via Bitcoin. But having strict laws in Venezuela can be tough for a miner like him. Having his goods and necessities delivered through Amazon can be a tough one as it can be seize by the government any time of the day. Reading some of their stories show how they are afraid to get caught by the government as they are trying to hide their operation from them, but looking how the economy of Venezuela the government is the one who pushed some of their citizens to start mining Bitcoin.

[hankyulpark]

The electricity fees in Venezuela are really low, so mining is profitable. One issue there is to HAVE electricity in the first place (a lot of blackouts) and how to spend the BTC mined. An international prepaid credit card could do the trick. But the main problem is to have products to buy (they have a shortage of essential things, like toilet paper).

[zahra4577]

Good to see that this young man is earning handsome amount through mining.
Bitcoin mining is profitable in many developed countries too so no surprise to see it is beneficial in Venezuela but this is not a solution to poor economic condition of this nation.
If Venezuela's government adopt blockchain,it can cut on many expenses and help improve their economic condition.

[The Sceptical Chymist]

Interesting read, but I wonder how much of it is true.  $1200/day seems ridiculously high.   Is anyone still mining over 1btc per day from home?  Also: Zoo animals make for great eating.  Mmm-mmm!

[stompix]

Alberto, meanwhile, based on his own account, is earning more than $1,200 a day mining bitcoins and other cryptocurrencies.

If he manages to do that his electric bill would be enormous. And not in terms of usd but of KW.
With the government unable to provide 24/7 service I doubt he would be left alone mining with that kind of gear.

In maximum a month police would be at his door.

[Sundark]

Interesting read, but I wonder how much of it is true.  $1200/day seems ridiculously high.   Is anyone still mining over 1btc per day from home?  Also: Zoo animals make for great eating.  Mmm-mmm!

If that is real and he is really earning $1200 per day I wonder how much is worth his mining equipment and how he was able to afford all that.

It's sad that government of country with world's highest inflation rate is doing everything to curb bitcoin adoption, even to the point of hunting down BTC miners.
The irony of this situation is that Bitcoin will be soon outlawed to the point when bitcoin miners will be no different that drug dealers.

[alyssa85]

Alberto, meanwhile, based on his own account, is earning more than $1,200 a day mining bitcoins and other cryptocurrencies.

If he manages to do that his electric bill would be enormous. And not in terms of usd but of KW.
With the government unable to provide 24/7 service I doubt he would be left alone mining with that kind of gear.

In maximum a month police would be at his door.

I expect he has the miners distributed across many sites to disguise the electricity use. According to that article he is taking huge precautions - living in a poor neighbourhood that doesn't get raided, wearing old clothes, keeping a low profile. It also said he had about a dozen relatives he is supporting, and I guess in return he is getting them to keep the miners on their premises.

[YuginKadoya]

It is best that Alberto has come across Bitcoin it totally changes lives regarding the hunger and lack of financial needs for all it's people, at least we can say that the electric bill there is not cost high, not in my country the total amount of electric bill would not make you ROI over it, because it is too expensive and the internet connection was very slow regarding the cost of expense you need to settle every time you pay bill, well I can truly say Alberto was very lucky enough because he can Bitcoin mine on there country regarding the risk that they can be caught by the government.

[mindrust]

Interesting read, but I wonder how much of it is true.  $1200/day seems ridiculously high.   Is anyone still mining over 1btc per day from home?  Also: Zoo animals make for great eating.  Mmm-mmm!

I also find that 1200$/day story is very unlikely. There is a possibility that its made up news by the poster.. People do anything to get web traffic to their website nowadays.

To be able to make that much money in a day, he should be upgrading his rig everyonce in a while and he absolutely can't import the devices without revealing his identity.

Fake news.

[aTriz]

Miners need to be very cautious if they are doing this activity in Venezuela, for some reason (i really cannot understand why, it seems insanely stupid idea for me) they have made bitcoin pretty much forbidden to use, mine or store.
The electricity in Venezuela is extremely cheap, the costs of electricity for mining rigs are pretty much that small, that you don't even have to bother about them. Most of the costs are paying for ASIC machines used for mining.
However if you want to even start that, you need to consider that the law enforcement will treat you as a regular criminal in there, so be very careful.
But you should never forget that you are not doing anything wrong!

[ekoice]

http://reason.com/archives/2016/11/28/the-secret-dangerous-world-of

Four years ago, Alberto's career prospects were bleak. The 23-year-old Venezuelan had just graduated from college with a degree in computer science, but his nation's economy was already shredded by 13 years of socialism.

"There were job opportunities, but they paid like $20 a month, and we were used to traveling and buying things from abroad so we couldn't settle for that," his friend Luis recalls. Alberto and Luis—whose names have been changed for their own safety—teamed up to start a clothing business, but the venture floundered.

Then Alberto discovered bitcoin mining.

He read about it on an Argentinian gaming forum. An item posted to the site described a process of getting paid in a new internet-based currency denominated in strings of numbers and letters, in exchange for running computations on a home computer. His parents said that the whole thing sounded like a Ponzi scheme. Alberto, however, sensed that his life was about to change.

Four years later, his country is embroiled in a humanitarian crisis. The supermarket shelves are bare. Children are fainting from hunger in their classrooms. A mob recently broke into the Caracas zoo to eat a horse. Many Venezuelans subsist on a monthly government stipend equivalent to about $9.

Alberto, meanwhile, based on his own account, is earning more than $1,200 a day mining bitcoins and other cryptocurrencies.

...Bitcoin miners may have unique access to foreign goods, but they also live under constant threat. Many fear they'll be discovered by the Servicio Bolivariano de Inteligencia Nacional (sebin), the country's secret police force. SEBIN officers hunt for bitcoin miners and then extort them under the threat of arrest and criminal prosecution.

There is loads more in that article - it's an indepth look at the Venezuelan situation and I recommend everyone click the link above to read it.

I have read some articles that the bitcoin exchange in Venezuela had failed to function since the banks are going away from them denying them to have bank transactions. The miners on the other hand if known to the public were raided by the police for unknown reasons. With this turn of events we could not tell if bitcoin mining or bitcoin usage in Venezuela will prosper.

Its very sad to hear the condition of bitcoin miners and people of venezuela.The government should take steps to fulfill the basic needs of people or atleast it should leave the bitcoin miners to work free since they are finding their own source for earning money and not dependant on the government anymore.Hope the conditions would change soon.

[Red-Apple]

i didn't understand one thing about this article, and i see others are also mentioning it, and that is the $1200 per day. the article wasn't clear about this (or maybe i didn't get it). but is the $1200 earned by mining bitcoin or is it earned by importing goods and the process it explained about gift cards,...
i would be understandable if it is the combination of mining bitcoin and then using that bitcoin to earn more money.

but if that is true that raises the question of how much do they earn by mining.

[alyssa85]

i didn't understand one thing about this article, and i see others are also mentioning it, and that is the $1200 per day. the article wasn't clear about this (or maybe i didn't get it). but is the $1200 earned by mining bitcoin or is it earned by importing goods and the process it explained about gift cards,...
i would be understandable if it is the combination of mining bitcoin and then using that bitcoin to earn more money.

but if that is true that raises the question of how much do they earn by mining.

Probably a mix of both. If you can buy food on amazon for dollars, get it to Venezuela and then sell it on for a premium to desperate people, there is money to be made.

Also, the article says "bitcoin mining" but as we know miners mine whatever is profitable, so they're probably mining eth, ltc and other stuff.

[stompix]

Alberto, meanwhile, based on his own account, is earning more than $1,200 a day mining bitcoins and other cryptocurrencies.

If he manages to do that his electric bill would be enormous. And not in terms of usd but of KW.
With the government unable to provide 24/7 service I doubt he would be left alone mining with that kind of gear.

In maximum a month police would be at his door.

I expect he has the miners distributed across many sites to disguise the electricity use. According to that article he is taking huge precautions - living in a poor neighbourhood that doesn't get raided, wearing old clothes, keeping a low profile. It also said he had about a dozen relatives he is supporting, and I guess in return he is getting them to keep the miners on their premises.

Poor neighborhoods are the most raided. Also the one where power is cut more often.

You need 100 S9 for that income.How did he managed to get close to 300 000 dollars to buy that equipment?

Something is pretty fishy about this story.

[Red-Apple]

i didn't understand one thing about this article, and i see others are also mentioning it, and that is the $1200 per day. the article wasn't clear about this (or maybe i didn't get it). but is the $1200 earned by mining bitcoin or is it earned by importing goods and the process it explained about gift cards,...
i would be understandable if it is the combination of mining bitcoin and then using that bitcoin to earn more money.

but if that is true that raises the question of how much do they earn by mining.

Probably a mix of both. If you can buy food on amazon for dollars, get it to Venezuela and then sell it on for a premium to desperate people, there is money to be made.

Also, the article says "bitcoin mining" but as we know miners mine whatever is profitable, so they're probably mining eth, ltc and other stuff.

yeah that is also what i think. but then the title of the article is a bit weird since it is mostly the import business that is profitable.

about mining, can you really mine other altcoins with bitcoin mining equipment, which is ASIC?

[flora_digitalis]

A very interesting and insightful article. Venezuelans Bitcoin miners at least have an advantage when it comes to electricity costs...

Since the article is almost 6 months old I wonder how the situation may have changed until today. I would expect that prosecution of Bitcoin miners will have intensified greatly.

[Kprawn]

Alberto, meanwhile, based on his own account, is earning more than $1,200 a day mining bitcoins and other cryptocurrencies.

If he manages to do that his electric bill would be enormous. And not in terms of usd but of KW.
With the government unable to provide 24/7 service I doubt he would be left alone mining with that kind of gear.

In maximum a month police would be at his door.

I expect he has the miners distributed across many sites to disguise the electricity use. According to that article he is taking huge precautions - living in a poor neighbourhood that doesn't get raided, wearing old clothes, keeping a low profile. It also said he had about a dozen relatives he is supporting, and I guess in return he is getting them to keep the miners on their premises.

Poor neighborhoods are the most raided. Also the one where power is cut more often.

You need 100 S9 for that income.How did he managed to get close to 300 000 dollars to buy that equipment?

Something is pretty fishy about this story.

This was obviously a while ago, so it is not entirely unlikely. If he came in early when they were still mining with CPU's and GPU's then he would

have been mining a load of coins with a much lower difficulty factor. Some people "steal" electricity and mine with much higher profits than

people that have to pay utility bills.