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Digital Mining in Venezuela myth or reality

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The National Constituent Assembly (ANC) approved in March 2018 the "Law on crypto assets and the petro cryptocurrency", which authorizes the circulation and commercialization of Petro and other cryptocurrencies for the exchange of goods and services within the country.

This decree empowers the National Superintendency of Cryptoassets and Related Activities "Sunacrip" the powers to oversee, penalize and issue permits to miners and creates the "Registry System for Virtual Miners, virtual exchange houses and other entities dedicated to saving and virtual intermediation of cryptocurrencies ”.

With the aforementioned law, the State promotes mining activity in the country and encourages the exchange and use of Petro and other main cryptocurrencies in the main national exchanges.

For February 2019, Ruling Number 41,578 is decreed in the Official Gazette, which regulates the Comprehensive Registry of Cryptoactive Services (RISEC), which aims to establish the regulation of Cryptoactive Services.

In January 2020 make the collection official of services and rates in petros in state entities that handle foreign currency, except for the subsidiaries of PDVSA and the mixed companies of the hydrocarbon sector.

Then in September 2020 it is decreed in Official Gazette No. 41,969 the SUNACRIP providence, through which the activities related to the use, importation, commercialization of Digital Mining equipment are regulated and the Mining Pool National Digital.

The decree also contemplates the conditioning of spaces to offer the hosting service to Digital Mining equipment, including the manufacture, assembly, repair and improvement of such equipment.

Therefore, a whole scenario is opened to legalize this activity and they warn that the people dedicated to this activity must have all the relevant permits, otherwise they will be penalized.

But whatand does the National Electric System do to solve electrical failures in the country and allow this activity?

In December 2020, Sunacrip and the National Electricity Corporation (Corpoelec) reported via Instagram the creation of an inter-institutional cooperation framework that establishes the legal and energy parameters for the development of digital mining in Venezuela, with the idea of ​​providing and improving substantially energy supply to miners.

However, the lack of adequate infrastructure in terms of electricity supply and internet connectivity still persists to date, hampering the optimal operation of mining farms in the country.

If to this situation is added the seizure of equipment in police operations, due to not having the pertinent permits, it could be stated that it is a risky activity in the country.

In this regard, we discussed the issue with the Venezuelan miner Juan Blanco from BitDAta Consultants, who from his vision clarified some doubts.

1) How do you define digital mining?

Because cryptocurrencies are a decentralized system, it is important to have a system that allows you to check all the operations carried out, and thus prevent someone from using the same amount of cryptocurrencies more than once or being able to introduce counterfeit currencies into the market. .

The mission of mining is basically to certify that nobody uses the coins twice (avoid double counting) and that nobody can introduce false cryptocurrencies in the market, in the case of those that are mineable.

The miners review the transactions and put together the latest transactions created in a group called a block (chain of blocks or Blockchain). The set of blocks could be compared to the set of pages of a general ledger (ledger), which certifies all the movements and the balance of the users, this information being available in the cloud to be able to audit it.

The more powerful digital mining equipment has, the easier a block can be solved and, therefore, obtain a reward. It is for this reason that the mining pools were created, to carry out joint work and thus obtain a fair reward among all members for the work done.

Many concepts are around this economic activity, but it is necessary to comment that it is a passive economic activity that increasingly motivates more people to get involved in the subject and also invest in digital mining equipment.

2) Do you think that it is really feasible to do digital mining despite the failures in the national electricity system?

Definitely if it is feasible to mine in Venezuela.

During the years 2019 and 2020 it was a challenge, and it took years of learning. It is important to have specialists on the subject, both in the electrical and computer fields; since without proper electrical protection in the so-called digital mining farms, there is a risk of significant damage to the miners, due to the “peaks” of rises and falls of the electric load.

The clear requirement to be able to mine, apart from having the miner, is to have electricity and stable internet, the miners are equipment that must be turned on 24/7/365; Without electricity or internet, it is impossible to carry out this economic activity.

3) On some occasions they accuse digital miners of electricity failures in the country, what do you think of this?

My clear opinion, being the same answer for years, is that in Venezuela not enough has been invested in the national electricity system. Many companies have closed in the country and digital miners have taken advantage of that electricity availability to contribute to the country as an economic activity that receives more adoption in the process of adoption and usability of cryptocurrencies.

4) Whatand Is it the National Cryptoactive Superintendency and what requirements do they require to carry out this activity?

The National Superintendency of Crypto Assets and Related Activities (SUNACRIP), is an entity of the Venezuelan State, which is in charge of regulating and supervising all activities inherent and derived from the development of the Comprehensive Crypto Assets System.

Among the requirements to exercise digital mining in Venezuela, is to have the Comprehensive Registry of Cryptoactive Services (RISEC: Official Gazette No. 41,578 – 02/04/2019) and the Comprehensive Registry of Miners (RIM: Official Gazette 41,969 – 09/21 / 2020), according to the regulatory legal framework that has been developed in Venezuela, this regulatory framework details the necessary requirements to carry out this activity.

5)What do you consider to have been the advances that Venezuela has had in terms of crypto assets, name a few.

The advances have been many, however the most significant advances have been:

  1. Venezuelans have used cryptocurrencies as a refuge from hyperinflation, the financial blockade, and economic and political uncertainty.

2. A regulatory framework has been developed that has served as a model for other countries, since we are a global reference to the world.

3. Companies (Startup) have been born that have developed solutions to use cryptocurrencies as a form of payment.

4. More and more people are interested in learning about the subject.

5. The Venezuelan state created a centralized crypto asset, which has been used to purchase gasoline.

6) Sometimes the police have extorted money from the miners, have you recently been a victim of these blackmails?

In 2019 I was subjected to extortion, favorably I got out of the situation, thanks to the fact that I had the necessary documentation at the time of the inspection by the Bolivarian National Police.

During 2020, this type of illegal actions significantly diminished, the SUNACRIP has carried out the necessary work to prevent extortion.





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