The Venezuelan military has a bitcoin mining farm

s of a bitcoin mining farm belonging to the Venezuelan army are circulating on social media: the Digital Assets Production Center of the Bolivarian Army of Venezuela . The Venezuelan military says it wants to generate “unblockable income” and that Bitcoin is an alternative to the traditional financial system dominated by “colonial interests”.

s of the mining farm appeared via an Instagram account of the Venezuelan army. In a video production, the Venezuelan military showed a large-scale mining operation and engineers tinkering with ASIC miners.

Above: A video of the Venezuelan military’s mining farm

More images of the mining farm appeared elsewhere and the local media also seems to confirm the news. Television images show senior government officials being given a tour. The mining farm is said to be located in Fuerte Tiuna, which is close to the capital Caracas and where the Ministry of Defense is also housed.

With the mining farm, the army says it wants to generate ‘unblockable sources of income’. It argues that Bitcoin is an alternative to the traditional and trust-based financial system, which they say is blockaded and in the hands of ?«£colonial interests.?«•

Above: A local media news report shows government officials being given a tour

Sanctions and trade restrictions

By this they probably mean the United States and Western allies, who have been boycotting the country through trade restrictions and sanctions for years. For example, last year US President Trump had Venezuelan bank accounts and assets in America frozen and the Bank of England froze more than a billion dollars worth of Venezuelan gold reserves in London.

Doing international trade is therefore not easy for Venezuela. Moreover, the country’s few trading partners are reluctant to be paid in the hyperinflationary bolivar, Venezuela’s national currency.

From oil to bitcoin

Actually, Venezuela should be prosperous, because it has the largest proven oil reserves in the world. With more than 300 billion barrels, it even manages to keep Saudi Arabia from first place. However, Venezuela has little use for it due to limited trade opportunities.

However, the local energy price is very low as a result, which means that the profitability of bitcoin mining in Venezuela is relatively high. Although it is difficult for them to sell the oil abroad, they can generate energy with it and thus mine cheaply for bitcoins.

Bitcoin mining also generates income in bitcoin and that changes the dynamics. After all, unlike in the traditional financial system, no one on the decentralized Bitcoin network is able to block transactions, confiscate funds or impose other restrictions.

Bitcoins also have value all over the world and they are quite easy and fast to send worldwide. It is independent and politically neutral money, which can be exchanged almost anywhere in the world. Bitcoin could be interesting for Venezuela for these reasons and the Venezuelan government seems to understand that better and better.

National mining pool

Not long ago, the Venezuelan government introduced regulations requiring local bitcoin miners to join a national mining pool, managed by the regulator SUNACRIP.

Now that the Venezuelan army is also actively involved in bitcoin mining, it seems that the adoption of Bitcoin in Venezuela is entering a new phase.

Iran

Venezuela is not the only country that is enthusiastic about bitcoin, because the government in Iran also seems to be increasingly interested in bitcoin. Like Venezuela, Iran also has a lot of oil and is also struggling with international trade restrictions.

The Iranian central bank therefore announced that it wants to use bitcoin for importing goods from abroad. Bitcoin miners in Iran are now obliged to make the bitcoins they mine available to the central bank.

Earlier, the Iranian government also introduced a licensing system for bitcoin miners. Since then, some Iranian power plants have been making their energy surpluses available for mining purposes.

Decentralized

Bitcoin is a decentralized and open network, based on mathematics. Mathematics is free of value judgments, has no agenda and does not discriminate. This means that everyone has access to this money system, regardless of religion, skin color, origin, gender, sexual preference, place of residence or any other personal characteristic. It also means that powerful institutions, individuals or countries are unable to impose their agenda on the network.

This creates censorship resistance , which many believe is Bitcoin’s most valuable asset. It means that it is independent and that everyone can participate, including the 2 billion poorest people in the world without a bank account and also people living in a state of oppression. Unfortunately, the downside is that criminals, corrupt governments, and other dubious parties can also take advantage of it. Many Bitcoiners consider that a necessary evil, with the benefits outweighing the drawbacks.

Bitcoin is decentralized. That is new, different and has all kinds of implications, but it is a reality that we will probably have to get used to. Beyond moral issues, it is perhaps mainly the question of how we want to position ourselves in this new reality.

Here you can read more about the growing interest in Venezuela and the national mining pool. Earlier we also wrote about Iran and sanctions and about the Iranian plans to use bitcoin for import.

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