MONEY: Socialism’s achilles heel

Wednesday, January 4, 2017

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

The Secret, Dangerous World of Venezuelan Bitcoin Mining
How cryptocurrency is turning socialism against itself
Jim Epstein from the January 2017 issue

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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.

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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.

Bitcoin mining requires a lot of computer processing power, which in turn requires a lot of electricity. In most of the world, utility bills eat into the cost of mining. In places where energy prices are high, it can even be a losing proposition. But in Venezuela, the government has turned bitcoin mining into something akin to owning a home mint.

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Guess the Gooferment there never figure this one out!

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