How Venezuelans Use Cryptocurrencies: Interview #1

I was researching an app called “We Nano”, where anyone can create a “hotspot” anywhere in the world and deposit money in the form of Nano (a cryptocurrency), and whoever is near it can withdraw the money with the app. I noticed that there were a lot of people creating hotspots in Venezuela, and also that Nano is used in Venezuela more than in any other country, and I wanted to know why.

This is an interview with an anonymous Venezuelan I found in a forum about Nano and cryptocurrency usage in Venezuela.

There are more than 200 WeNano Spots in Venezuela.

Without giving me too much information about your identity, can you tell me a little bit about what you do for a living?

I dedicate my life to engineering but don’t let this scare you. Unfortunately here in Venezuela for many years the education has been free and of quality, but as in a country in crisis, having a career doesn’t guarantee an adequate standard of living. According to the College of Engineers, a starting salary for an engineer is only $240 (per month) and thats only a suggestion. The CIV doesn’t have the authority to establish an obligatory minimum salary for engineers, little businesses fulfill it, I think the salary is on average between 100 and 200 USD. It’s to say, according to the CIV, 240 USD, but according to http://cenda.org.ve/ (CENDA), you need about 350 USD monthly to “live” without luxuries.

An example of the success and quality of free education in Venezuela is Rafael Reif, an Engineering graduate from Venezuela and current Provost from MIT.

I’ve always been a fan of the internet. The situation in Venezuela is strange, today you can have people who were upper-middle class about 15–20 years ago and today they are basically in extreme poverty. For example, the university professors 20 years ago had an extremely high status, dare I say the highest in Latin America, with monthly salaries almost 5000 USD and amazing job benefits, obviously while this lasted they travelled the world, studied, bought houses, properties, cars, etc.

The situation is starting to get worse, they were 50–60 years old when the situation starts to get ugly (approximately around 2012) and they basically continue to live on their savings until now, they are educated people with neglected properties and without maintenance (to paint a house in very expensive), with a computer, internet, but basically they can only afford to eat. It’s a different poverty to countries traditionally poor like in Africa, for example. Today the salary of that same professor who earned 5000 USD per month doesn’t even reach 20 USD.

How did you start using cryptocurrencies?

Precisely and for my age, I come from the first generation that prefers the internet over the TV. I remember around 2014/2015 when I found out about Bitcoin and that with a computer you could generate it (I didn’t understand the subject very well). I remember having installed and configured a software to mine BTC on my PC of that time, I got to the point where I had to download I think the blockchain in its entirety (to synchronize the wallet), honestly I don’t remember what I was supposed to download but what I do remember it was a lot of Megabytes and with my internet connection of 1MB it was impossible, after several days like that I just gave up (in fact to this day, my connection is barely 4MB). What would be my fate if I had done that?

After, I became interested in other cryptocurrencies in smaller amounts. And with LocalBitcoin.com I could buy some satoshis of BTC with Bolívares (something I thought was impossible).

Here in Venezuela around 2018 the government changed their discourse on cryptos, before 2018 they would say that it was “money of delinquents” and thats the type of discourse of a government that dreams of controlling the ENTIRE country.

Someone advised the government and explained to them that rather, with crypto you could skip any international sanctions and other advantages. From there they changed their discourse and everything was love with cryptocurrencies, however it was against the policies that they like (to control everything), they had a kind of ideological short-circuit.

https://www.nytimes.com/2020/03/20/technology/venezuela-petro-cryptocurrency.html

I say this because the general acceptance of cryptos in Venezuela is higher than most countries because the government uses all of its communication apparatus to promote the Petro.

Nicolás Maduro with the Petro cryptocurrency logo behind him.

The Petro was a failure, even the first version which was a scam. Basically they use it to not say “60 USD”, they say “1 Petro”. If something is worth 120 USD they say “2 Petros”. They insist that the value should be 60 USD but in the “free” exchanges that exist in Venezuela, the Petros trade for 15–20 USD. The government itself became entangled.

https://beincrypto.com/venezuelan-government-insists-petro-is-worth-60-despite-free-markets-trading-it-at-less-than-8/

https://coingeek.com/venezuelans-dont-want-the-petro-crypto/

Estafa Petro V1 https://bitcointalk.org/index.php?topic=3006037.540

Why do you use cryptocurrency? What do you use it for? How does it help you?

Look, in occasional freelance activities that I do here in Venezuela, they pay me in Bolívares, and I immediately exchange this money into crypto. I particularly use it like as a method to save but that’s just me.

Cryptocurrency helps me and any other Venezuelan to escape inflation, here the bank accounts are mostly in Bolívares (the accounts in USD generate distrust in the population and they are also new, the government can easily keep those funds due to a decree), so crypto wallets are like “hard” currency savings accounts, even for cryptos like USDT.

Some people have bank accounts in dollars outside of the country (USA, Panama, Spain), but the percentage is very low, it’s easier to open an account in Uphold/Airtm/Binance/LocalBitcoin and others.

Which cryptocurrencies do you use?

I like Bitcoin because its the most widely known, LocalBitcoin is one of the most effective ways to exchange large quantities of Bolívares to cryptos (I mean more than 100 USD as large amounts) and it exclusively handles Bitcoin, theres a lot of movement on a daily basis. But I think that for use in Venezuela for the low transaction amounts (many times less than 5 USD) cryptos such as NANO, USDT (I don’t know if it counts as crypto?) and LTC are better.

How do you obtain crypto?

I started by buying satoshis with Bolívares in LocalBitcoin, some money that they paid me in Bolívares and I had to “get rid of it” as soon as possible (Here to keep money in the bank in Bolívares is crazy, you can easily lose 20–30% easily in one week).

This is basically how I bought. Later I discovered AirTM which is like a LocalBitcoin but it allows exchanges to be done with other cryptos. Binance also does the same.

I’ve met a lot of people on here who have offered me jobs, assignments, consultation and they ask me for obvious reasons in crypto. Bitrex was also popular here but they stopped offering services to Venezuelans around 2020 I believe.

Which crypto is your favorite? Why?

It’s a hard question, I like Nano a lot, its fast, without fees and the WeNano project is very nice, a group of people from other countries setting hotspots in Venezuela to help a Venezuelan and also to promote cryptocurrencies? Great idea, a win-win situation.

People all over the way create WeNano spots in Venezuela to help Venezuelans. The person who made this spot is from the United States.

What do you think about Nano? Do you think Nano could be widely adopted by the population?

Well, above I mentioned Nano without having read this question, I think that the response is obvious. I like Nano and hopefully Venezuela can be an example for Nano and for cryptos worldwide. The speed and the fact that it has no fees, in a country where a couple of cents make a difference is very good.

How often do you use cryptocurrencies for transaction in stores? If you use it in stores, why? If you don’t, why not?

Honestly not often, I particularly crypto more as a method of temporarily storing. But here in Venezuela I would say that incredibly enough we are pioneers of using crypto.

You can go to Traki (a department store) and buy food, clothes, electronic appliances, and pay with crypto. I don’t think in any other country there exists a legal framework that allows you to do that.

https://es.beincrypto.com/aprende/opciones-comprar-alimentos-venezuela-usando-criptomonedas/

I’m planning (when I have the money) on making a purchase in Traki of something that I need and pay for it in crypto, I’ll document the process to make it known.

¿You mentioned before (in a comment) that cryptos “give you freedom”. Can you talk a little more about this?

The thing is that for many years here in Venezuela we’ve had very limited options for our finances, there existed for many years an “exchange control” that impeded with the freedom to convert currency (you couldn’t go to the bank and buy USD and euros), even if you had a Visa Gold credit card from a Venezuelan bank you could NOT use it to buy on Amazon (for example), and that has NOTHING to do with sanctions. It’s something that has been happening since 2001.

The financial subject worldwide always has been difficult for us Venezuelans, the government has always put limits and barriers in effort to control everything.

With cryptos, you bypass all these limitations, you’re free, you can buy and sell whatever you want and without scrutiny from the government, your only limit is your financial situation, but thats a personal limit, and its a limit that affects everyone worldwide, its not something a limit that the government is setting.

Do you think that cryptocurrencies can help the Venezuelan population against inflation?

Honestly, it can help but it’s not the ultimate solution. The problem of inflation is more profound, with many political roots and sadly there has to be a change in the government so that (with the help of cryptos) we can get out of this hole.

The person who made this WeNano spot called it “Inflation is theft”.

Are there any problems that still exist with cryptocurrencies that hopefully can be solved? Before you had mentioned that some problems with the adoption of crypto include: the distrust of the population, the necessity to have a smartphone with internet, and the fees of cryptocurrencies. Which one of these problems do you think is the biggest obstacle to the widespread adoption of cryptocurrencies in Venezuela? Why?

Let it be known, Venezuela is a highly digitized country. Incredibly enough, even with all of the problems, the majority if not all the transactions are digital, and cash basically doesn’t exist (Yesterday the Central Bank of Venezuela announced the 1,000,000 Bolívares bill which is only worth 0.5 USD), cash circulating is in dollars. So theres many people that are used to making digitals transfers and payments (my dad is almost 70 years old and he uses mobile payments in a very solvent way, a digital interbank system is between Venezuelan banks in bolivars). I think that in other countries the majority of people are still clinging to cash.

If here the government opened up a little and there existed campaigns for the education of crypto, easily the people would migrate to that!

Distrust I do not believe for what I mentioned before. The biggest problem could be the smartphone with internet, it’s not difficult to obtain but there are people without smartphones, or even worse, smartphones without mobile data (recently the prices of mobile data have risen, 1Gb cost close to 0.5 USD).

If a national exchange manages to implement a system with SMS with the support of the government (whether it be this government or a different one), I think it would be a success.

The fees, yes its a problem! Thats why Nano and other cryptos with low fees have a lot of opportunity. Hopefully soon LocalBitcoin will migrate at least partially to the Lightning Network, that would help a lot with speed and fees.

Are there any concerns with privacy in relation to the government and cryptocurrencies?

Yes, this is a government of control. At first (before 2018, when they launched the Petro, the governments “cryptocurrency”) they said that crypto was the money of delinquents, they had to change their discourse with the Petro but they aren’t very happy that another parallel economy exists that they can’t control.

For example with the miners, the government felt “bad” because they couldn’t receive something from the miners, in Venezuela the electricity in free. What they invented was a miner registry, where EVERYONE who mined MUST be required to register and report their numbers. People who mined on a medium and large scale had no option to register against their will.

If they found a mining farm (due to electricity consumption) and it wasn’t already registered, there would be problems, fines, jail, extortion, confiscation of equipment, etc.

This is dangerous, you tell the government that you are mining, and you are a target for extortion and kidnapping.

I don’t know what the current status of this is, no further news has come out about. Obviously if you start mining now with a PC and a modern GPU, its unlikely that they detect the electricity because it dissipates, that is my dream!

What do you think is the future of cryptocurrencies in Venezuela? And in Latin America?

I don’t know about in Latin America, but in Venezuela I see it very promising. It surprises me that in spite of the whole crisis and thousands of political and economic problems, even so Venezuela (at a legal level and for ordinary people) is a pioneer in many points in relation to this issue when you compare it with neighboring countries such as Ecuador, Colombia, and Peru.