- Venezuela has passed a law regarding Bitcoin mining firms
- The law mandates that all Bitcoin mining operations are to be strictly supervised by the State
- Law passed by the government has a particular motive and that is to centralize BTC in Venezuela
Venezuela has been the hub for crypto mining in the Latin America. The country’s economic instability and falling values of its fiat currency has facilitated the growth of crypto currencies. The crypto adoption in Venezuela is evolving and won’t stop anytime soon. However, amidst the pandemic and increasing crypto growth the government of Venezuela has passed a law regarding Bitcoin mining firms. The law mandates that all Bitcoin mining operations are to be strictly supervised by the State. This means that the miners are compelled to join the national pool and consequently, each and every activity of them would be looked upon by the competent Venezuelan authorities.
All Miners to Come Under a Pool Operator who Will Supervise Their Activities
So what triggered an outcome of such a law for Venezuelan BTC miners? Some authorities have clarified that with increasing mining activities in the country, the number of crimes, attacks and speculations on the value of dollar have also increased. Overcoming the country’s financial controls has also become very easy. Consequently,the Registry of Miners (RIM) has been established to issue licenses for the industry. This will include the equipment farmers and all entities and organisations involving the construction of mining industries.
Frustrations of the Cryptocurrency Entrepreneurs Regarding the Registry
With the increasing hash rate of the country’s cryptocurrency industry, comes the frustration of thr crypto entrepreneurs regarding the Registry. This is because they feel that by unveiling the accounts and financial income they might be subject to criminal activity and the corrupt government organisations.
Ultimately, the law passed by the government has a particular motive and that is to centralize BTC in Venezuela. This may sound absurd because it is meant to be decentralised and any attempt to tamper this feature may ultimately result in a negative way. And not to mention, state controlled operations are often vulnerable to the pool operator in this case, it is the state.
Increasing Hash Rate: Venezuela Ranks 10th Globally
Venezuela as we know comes in the top 10 list of countries with vigorous mining activities. The cheap electricity and the nation suffering from inflation ultimately drives the cryptocurrency industry in the country. A recent study from the University of Cambridge suggests that Venezuela ranks 10th on the basis of average monthly share of total hash rate and contributes 0.42% to the global hash rate. On the first, second and third places are China, the United States and Russia with 65%, 7% and 6.90% respectively.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.