Bitcoin is a solution to unstable currencies in the same way that gasoline is a fire extinguisher. People in Venezuela that want to actually eat are using USD.

they cannot send or receive usd from abroad. they can do it with bitcoin. you get now the value proposition of a global currency that is not government controlled?

If crypto, being "not controlled by a central authority", solves inflation, surely it would already have replaced the default currency in Venezuela by now?

"Authorities have .. permitted trading of bitcoin in Venezuela, though they have heavily fined and detained people who use computers to earn bitcoins by auditing online cryptocurrency transactions. Such “mining” operations use immense amounts of electricity, which is heavily subsidised in Venezuela — meaning the state essentially winds up paying for the process."

"few businesses openly advertise that they accept cryptocurrency out of concern they will be extorted. It’s still difficult to make many purchases in Venezuela with bitcoin"

https://www.news.com.au/technology/online/venezuelans-seeing...

They have a national registry that you need to subscribe to if you are a miner. That and you also need to keep in handy your customs paperwork to prove that you paid entry duties for the equipment. Otherwise you open yourself to police extortion.

does extortion happen regardless? Because the article seems to imply that the miners were mining legally, but where extorted by police anyways

People in Venezuela certainly do send and receive USD from abroad, it is obviously the only way it gets into the country. You can go to a grocery store and buy food with USD. This is what people are actually doing. I suppose you can try to convince the people at your local grocery store to accept cryptocurrencies but good luck with that. And good luck using cryptocurrencies in a country that suffers from frequent blackouts of both electricity and internet.

I'm sorry but I currently live in Venezuela and what you are saying is wrong. Very few places in Caracas or hotels will actually take USD for payment since it is considered illegal unless you go through the regular channels with the idiotic govt exchange rate.

Bitcoin not only thrives here and allows you to bypass the whole craziness with the economy by using exchanges like localbitcoins.com where somebody would deposit the amount of bitcoin you sold to your local bank account. This way you just keep your money in bitcoins if you want. This is specially true with miners.

for sure people that live in Europe cannot deposit good amounts of USD to send through the bank to their relatives there. I know this for a fact. I think you are misinformed.

aris is technically correct. They are not legally allowed to bring a ton of USD into the country (if they're even well enough off to do so). And legally, they have to do so at government-mandated exchange rates (which no one does, because everyone buys/sells on the black market). Surely people are using USD where possible. But likely, they're HODLing their USDs (against the rapidly inflating Bolivares) wherever possible, too.

Meanwhile, no doubt some are using crypto to supplement their incomes/savings as well.

> aris is technically correct.

No,“can” and “are legally allowed to” don't, technically, mean the same thing.

For most Venezuelans, getting access to cash is not a practical reality, even if it's a theoretical one. I went to Venezuela in 2011 and you couldn't even bring $1K USD worth of goods into the country without being taxed to death on it (or paying off some government official). How about cash? Also, I'd rather carry a USB stick with a private key on it than a wad of cash in one of the world's most violent countries (in the middle of an economic depression).

Well the thing is that cash is nowhere to be found so you just go around with your debit card and you are fine.

The other part is that we Venezuelans never walk anywhere. Going somewhere without a car feels dangerous. Oh and in big cities, if the car is armored the better. Plenty of shops now to convert your SUVs.

And how do you buy things with your usb stick?

You buy things via the internet. USB stick (or whatever, paper wallet even) is just cold storage for the private keys of ETH, QTUM, BTC, wallet, etc.

But can't i do the same thing from wherever i am and have it delivered? Or have it mailed as a gift? Even with the situation in Venezuela, Fedex/DHL still ship there.

Furthermore how does that allow you to pay for food, water, utilities, or even fuel for your car?

Do what? Order things with paper money or are you talking about some VISA/MC-backed debit/credit card? Where do you sign up for a USD-based bank account in Venezuela? How do you pass KYC checks? You got a family member or friend who lives in the States you can trust to escrow that for you?

Shipping Fedex/DHL in Venezuela isn't nearly as reliable as shipping in the United States. Nor is it cheap.

Energy and gas are super cheap in Venezuela (38 cents a gallon). I'm not sure where you're going with your argument there.

You can hold crypto as a hedge against the Bolivares, convert to fiat as needed, just like any other fungible asset.

Let’s say I am in Venenzuela and I have some bitcoin. Now what do I do with it? Can I pay my rent with it? Buy food? Of course not. It isn’t solving any problem a USD account isn’t solving. Converting Bitcoin into anything actually usable is the problem.

You can use localbitcoins.com or localethereum.com and somebody will buy your cripto and give you bolivares in your local bank account. That way you save a trip to the US to open an account, which most people can't afford anyway