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Venezuelans flock to BTC, the digital currency as inflation has spiraled to the triple digits, debasing the the venezuelan currency, the bolivar (VEF) and depleting savings. Citizens struggle to find everything from food to medicine on store shelves. Ryan Taylor, chief executive officer of crypto currency Dash Core says "If you're going to be in something volatile, you might as well be in something that's volatile and rising than volatile and falling,". Crypto currency Dash Core is the third-largest digital coin by number of transactions. Bitcoin (BTC) trading volume in Venezuela jumped to 1.3 million US$ this week, about double the amount that changed hands two months ago, according to LocalBitcoins.com.
Venezuela's currency has become nearly worthless in the black market, where it takes more than 6000 bolivars (VEF) to buy 1 US$, while bitcoin surged 53% in May-2017 alone. But it's not just about shielding against the falling bolivar, as some Venezuelans are using crypto currencies to buy and sell everyday goods and services, according to Jorge Farias, the CEO of Cryptobuyer.
For those desiring a faster transaction time the crypto currency Ethereum exists with an average block settling time of 14 seconds since April 2016 according to themerkle.com.
Venezuela has 47e9 m³ in proven oil reserves, more than any other nation in the world. So now the only thing missing is to start the sale of oil using crypto currencies so that a military intervention can be justified..
All this happens while since at least 2014, hundreds of thousands of citizens have protested high levels of criminal violence, corruption, hyperinflation, and chronic scarcity of basic goods, arrest of opposition leaders, laws to force citizens to work in agricultural fields and farms for 60 days or longer, 40 inmates dismembered and consumed three fellow inmates, 200 prison riots in Venezuela in 2016 and so on. Tourist hotels probably have an all time low now for that super bargain..
(Score: 0) by Anonymous Coward on Monday June 19 2017, @08:25PM (4 children)
You know the answer... you listed it in your question. Try searching the price of oil back when they were doing well against the price of oil now.
When your economy is driven in large part by a single good, and that good's value drops in half, it will wreck your economy no matter how perfectly you manage it. No "screw up" required.
(Score: 0) by Anonymous Coward on Monday June 19 2017, @08:31PM
Why didn't their society diversify its investments? Why did they build their entire society around this one resource, especially a society with heavy-handed socialist handouts? Well, because they organized according to top-down, central planning. When you place the organization of flows of resources into the hands of a cabal, rather than in the hands of self-serving, self-interested individuals spread throughout every strata of society, then you're going to end up with naive decisions based on the tunnel vision of would-be know-it-all "experts".
(Score: 3, Interesting) by AnonTechie on Monday June 19 2017, @08:33PM
Thanks for your response.
However, I do not think that price of petrol is the ONLY cause. Even now, the Gulf Countries (Saudi Arabia, Qatar, Kuwait, UAE, Oman, Bahrain) have some of the lowest prices of petrol and most of them are "single good" economies. Are you suggesting that they too will head in the same direction as Venezuela ??
Albert Einstein - "Only two things are infinite, the universe and human stupidity, and I'm not sure about the former."
(Score: 3, Informative) by frojack on Tuesday June 20 2017, @02:09AM (1 child)
No, that is definitely not the case here.
A 50% drop in Venezuela's oil income still feeds the whole country, brings in enough food to feed the population, enough spare parts to keep essential infrastructure running. They can't even keep farmers in petrol to keep the fields tilled. Food trucks need military convoy protection.
Its way past the 50% drop in the price of crude. This is a societal meltdown, its becoming everyone for themselves, secret garden plots in the woods, raiding farm fields.
In the meantime nobody is quite sure where the money is going, other than to corrupt officials and armed thugs.
If it gets much worse, I predict another Pol Pot style forced emptying of cities into farm plots (or graves) in the countryside.
No, you are mistaken. I've always had this sig.
(Score: 2) by Phoenix666 on Tuesday June 20 2017, @04:27PM
That's the key, there. Societal meltdown can happen anywhere, and it doesn't matter what other sources of wealth you might have. You can be sitting on top of the richest farmland in the world but if the farmers are too busy fighting each other to farm then everyone will starve. If everyone is starving and fighting all the billions squirreled away in secret bank accounts will become more or less worthless. If you're sitting on a stockpile of food and weapons, because everyone is starving and fighting, you will have painted a gigantic target on your back that will lure everyone to attack and attack and wear you down until they can plunder what you have amassed.
We've seen that dynamic in Zimbabwe, once the breadbasket of Southern Africa and now a hellhole, and we're seeing it now in Venezuela. We will see it in many other places soon, too.
That's why the unseen Social Contract that binds us all is so important, and why shredding it through poor policy and malice is so dangerous.
Washington DC delenda est.