Venezuela's Socialist Regime Is Mining Bitcoin In a Bunker To Generate Cash (vice.com) 87
The socialist regime once cracked down on bitcoin miners. Now it's mining the digital asset itself. From a report: At a military base outside Caracas, Venezuela, state video footage shows officers in green fatigues cut a blue ribbon donned with a cluster of glossy balloons. Then, the men pry open the doors of a narrow, dimly-lit bunker. But the balloons weren't inaugurating a new weapons factory or training facility. They marked the opening of a new bitcoin mining farm. Venezuela's President Nicolas Maduro needs cash to sustain his grip on power after muddling through one of the worst economic implosions seen in recent modern history in the Western Hemisphere. It appears that Maduro's last ditch effort to buoy Venezuela's shriveling economy is to dig deep for this digital asset and sell it for hard cash.
"In a strategic alliance with private capital, the Bolivarian army inaugurated the first center for the production of digital assets at the Fuerte Tiuna facilities," said a spokesperson in footage published by state television in late November. Venezuelan General Domingo Antonio Hernandez Larez details the project in a cramped conference room, then he and other officers fondle a few S9 AntMiners, a type of specialized computer used to mine bitcoin, the volatile cryptocurrency whose price is scraping all-time-highs of just under $20,000 per coin. "This center of digital asset production will ensure self-financing sufficiency within the military," the Venezuelan state TV official explains. "These mining activities will be key for increasing revenues for the country."
"In a strategic alliance with private capital, the Bolivarian army inaugurated the first center for the production of digital assets at the Fuerte Tiuna facilities," said a spokesperson in footage published by state television in late November. Venezuelan General Domingo Antonio Hernandez Larez details the project in a cramped conference room, then he and other officers fondle a few S9 AntMiners, a type of specialized computer used to mine bitcoin, the volatile cryptocurrency whose price is scraping all-time-highs of just under $20,000 per coin. "This center of digital asset production will ensure self-financing sufficiency within the military," the Venezuelan state TV official explains. "These mining activities will be key for increasing revenues for the country."
Old tech on bitcoin? Really? Well then. (Score:3, Funny)
It's going to be pretty awesome there when they work out they're not going to generate the kind of cash they're expecting.
Then it's implode time for them. Hopefully someone less corrupt will help that country instead.
Re: Old tech on bitcoin? Really? Well then. (Score:2)
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So I guess that explains it... (Score:4, Funny)
All the recent news stories about Bitcoin reaching new highs.... probably from manipulated "news" out of Venezuela.
The S Word (Score:3, Funny)
Uh oh... they used the "S" word in a slashdot summary. Cue smug neckbeard rage!
Re:The S Word (Score:4, Funny)
Sex?
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He referred to a "smug rage" so it's fair to say he's not too specific or meaningful with words.
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This is the decoy one (Score:2)
The real one is either in Bolivar state or in Amazonas state, much closer to the bulk of the electricity supply.
Of course, in a Bunker, inside a heavily armed Base.
Generate cash? (Score:2)
Re:Generate cash? (Score:5, Interesting)
Maybe if the government there uses its authority to get free electricity, uses other people's money to buy the hardware, and then keeps the bitcoins for itself...that's technically profit. Technically it's REALLY theft since someone has to pay to generate the electricity and to purchase the hardware. But if one has a narrow enough view, it's profitable for someone.
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Well no... nobody has to generate the electricity and purchase the hardware. Someone just has to do the work. If you are paying that someone in worthless government issued currency...
People have a really hard time remembering that nothing actually costs anything but time. We made up this money nonsense.
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Stealing the inputs doesn't make it profitable, because you're still sacrificing the opportunity to sell the inputs. But clearly, one of two things exists. Some people are able to make money mining bitcoin (maybe using hydroelectric power and FPGAs) or the country of Venezuela is the only bitcoin miner in the world and brilliantly/secretly controls the entire currency.
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The government owns the power stations and employs the staff. It is this a "tax is theft" argument?
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Nonsense, everyone generates a profit, they just don't always generate a profit in fiat currency at the time they mine.
A few years back I mined and my older generation ASIC miners dropped in returns. I was ready to shut it down at the point where the return was net - $0.01/day. The wife wanted to let it run and pointed at her wallet for fun (we had something set up to make a coin ting sound when made money and she loved it) so we let it run for... however long the thing ran without dying in the corner. Mayb
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Repost due to trolls.
Nonsense, everyone generates a profit, they just don't always generate a profit in fiat currency at the time they mine.
A few years back I mined and my older generation ASIC miners dropped in returns. I was ready to shut it down at the point where the return was net - $0.01/day. The wife wanted to let it run and pointed at her wallet for fun (we had something set up to make a coin ting sound when made money and she loved it) so we let it run for... however long the thing ran without dyin
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I believe that is his point. They still have the oil itself though so they can burn it for electricity.
The Russians actually wrecked the oil business from my understanding.
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If you're interested in how Venezuela actually wrecked its oil industry this is interesting.
https://www.forbes.com/sites/rrapier/2017/05/07/how-venezuela-ruined-its-oil-industry/?sh=190791997399
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State (Score:2)
When the state owns the electrical grid, the energy is free!
Re:Generate cash? (Score:5, Interesting)
It was my understanding that bitcoin mining ceased being profitable a good 7 or more years ago.
Bitcoin is only unprofitable if you have to pay a market rate for electricity.
Venezuela is a socialist country. There are no markets, and the government owns the generators.
The goal here is not "profit" (a capitalist concept) but hard currency to pay for imports.
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Exactly.
Labor and resources from within their nation are essentially 'free' and they have plenty of oil.
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Bitcoin is only unprofitable if you have to pay a market rate for electricity.
So they've come up with a system to sell proxy electricity at exorbitant prices? Wow - cool!
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Sure, that's how the Chinese mine Bitcoin too.
Just like food exports are really water exports, Bitcoin exports are really electricity exports. Except that of course people need food.
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The goal is to get around sanctions and other bullshit.
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The actual goal is likely to further enrich the rulers. There's not enough resources left in the country to do this again:
https://www.dailymail.co.uk/ne... [dailymail.co.uk]
"Maria Gabriela Chavez, 35, the late president's second-oldest daughter, holds assets in American and Andorran banks totaling almost $4.2billion, Diario las Americas reports. "
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The goal is to get around sanctions and other bullshit.
Why are the sanctions bullshit?
If Venezuela wants socialism, that is their own business as long as they can keep the consequences within their own borders.
But millions of hungry people are crossing into neighboring countries, pushing the costs onto others and destabilizing the region.
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Very american. Wars, sanctions and any form of strongarming is always justified but when bad things happen in these targeted countries it is never caused by the US, it just happens somehow without agency or they bring it onto themselves.
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Right, because of the sanctions and other bullshit fucking up their country. If you go out of your way to make sure Venezuela fails you can't then blame them when their state fails.
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The goal is to get around sanctions and other bullshit.
Why are the sanctions bullshit?
If Venezuela wants socialism, that is their own business
It sure looks like America thinks it's its business.
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The goal here is not "profit" (a capitalist concept)...
It's a mathematical concept and is entirely orthogonal to politics and ideology. Come on, Bill.
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"hard currency to pay for imports"
Too bad they had to settle for bitcoin instead.
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Venezuela is a socialist country. There are no markets, and the government owns the generators.
No, Venezuela isn't a socialist country, it's a kleptocracy. The "ruling class" has plundered the country while bamboozling the population into thinking that everything will soon get better because "socialism".
There are no real socialist countries, there always seem to be a group of people who shoulders the burden of ruling the workers.
traceable? (Score:2)
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Short answer: maybe.
Basically, every Bitcoin transaction lists every user's public key associated with it. That's how you can prove someone now owns whatever part of the transaction: they can prove they know the associated private key.
So yes, you can trace every transaction a given key does by looking through the ledger, which as it is by definition a public ledger, everyone can see.
However, unless you can associate a given public key with a given entity, while you can see every transaction the public key d
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Won't this be traceable?
There are on-line mixing services that can effectively anonymize the origin of bitcoins. In theory, these mixing services could also be blocked or sanctioned, but that would be difficult.
Can't the developed governments track these coins and put sanctions on any attempt to purchase them?
Any sanctions would be nearly impossible to enforce.
Is it really possible to wash it in sufficient quantities to keep a government afloat?
They don't need money for domestic use. They can just print all they need. They only need bitcoins for hard currency to pay for imports and make debt payments.
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"They don't need money for domestic use. They can just print all they need."
At some point down that path people just wipe their buttocks with it and refuse to accept it. Luckily for them, the government generally has the biggest guns and therefore all the actual leverage.
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A whole lot of guns makes a day of life a good people must barter for... that works until the problem of needing lots of hands to hold all those guns bites you in the ass. AI is working on that pesky little glitch right now.
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Sure it will. Killerbots hold guns for you. A massive network of automated AI powered defenses can theoretically be under the control of one person. The US military just deployed with an AI mission commander. It is coming sooner than you might think.
"When someone shows me an AI actually capable of realtime determinations of new data, i'll take note"
The 90's called and want their AI chatbots pretending to be people back. Computers did not beat the world's go champions with rule based determinations. The rule
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At some point down that path people just wipe their buttocks with it and refuse to accept it.
Did you miss the part about Venezuela being a socialist country?
The prices of goods are set by the government, not the market. So people have no choice but to accept the currency.
Under capitalism, excess currency leads to runaway inflation.
Under socialism, excess currency leads to empty shelves.
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"The prices of goods are set by the government, not the market. So people have no choice but to accept the currency."
And if the people decide they are keeping their stuff and not accepting the price set by government? Right, it seems to have really been guns all along. The rest was just smokescreen that lets people pretend they aren't slaves or for the dim ones, not see through the smokescreen in the first place.
Capitalism isn't a lot different but it is a better smokescreen and at least there is fluidity i
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Capitalism isn't a lot different
You should talk to people that have lived under both systems.
They would disagree that there isn't much difference.
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I definitely have and they all planned to stick with capitalism in the US. But both are definitely run at gunpoint. Now many would argue we no longer have true capitalism free from goverment interference and that is a fair point but nobody has had a true communist society at scale either.
They're under heavy economic sanctions (Score:3, Interesting)
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It'd be nice if we'd do something besides blockade countries we don't like. A little more carrot and less stick.
I can support that, but what do you have in mind?
Well for starters send economic advisors (Score:2)
Our main goals should be to promote democracy and ensure the world's dictatorships don't get a foot hold their. Doing the above would serve both goals pretty w
anti Venezuela propaganda on /.? (Score:1, Interesting)
Wow, now we don't have to tune into MSNBC or Fox to get anti-Venezuela propaganda, we are getting it on /. too?
Please. Venezuela's economy is in shambles because of US imposed sanctions. Many people in the US "mine bitcoins to generate cash". What is the deal here?
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Yeah, it's the fault of the US. It's not like Chavez robbed the country blind:
https://www.dailymail.co.uk/ne... [dailymail.co.uk]
"Maria Gabriela Chavez, 35, the late president's second-oldest daughter, holds assets in American and Andorran banks totaling almost $4.2billion, Diario las Americas reports."
Oh, wait.
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When you have to reach for the Daily Fail for your cite it's time to stop typing.
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Please. Venezuela's economy is in shambles because of US imposed sanctions. Many people in the US "mine bitcoins to generate cash". What is the deal here?
Actually, the US sanctions are the cherry on top of that sundae. Venezuela themselves put the ice cream, nuts and chocolate sauce in the cup. Years of "Free or almost free stuff for everybody!" were paid for by oil money and when that dried up, the free stuff didn't for a while, so the economy got into trouble.
Re:anti Venezuela propaganda on /.? (Score:5, Informative)
No, the Venezuelan economy is in shambles because their government appropriated the means of production by nationalizing most of their critical industries. After each nationalization, production then fell to half or less in those same industries. We have a term for this, it's called socialism.
The below was originally written in response to an article [benjaminstudebaker.com] blaming the Venezuelan economic issues on oil price declines, so you’ll see references to that. I’m posting this as-is, rather than rewriting it. Since I wrote it, things have only gotten worse, in terms of lack of food and in terms of oil production (despite recently rising oil prices, up $10/barrel in that time), to the point where we’re seeing news stories [reuters.com] about treason charges for oil workers in a futile attempt to get production back up at government-run PDVSA. How bad is it according to Reuters?
“About 25,000 PDVSA workers resigned between the start of January 2017 and the end of January 2018, out of a workforce last officially reported at 146,000, Reuters reported last week. The resignations – including high-level professionals that are now almost impossible to replace – have only accelerated since Quevedo arrived, two dozen industry sources told Reuters.”
—
The article contains some facts, but it also includes opinions and as Gilberto pointed out, it leaves many facts out, mostly about the government as related to the economy.
Here are some additional facts and opinions to consider:
From 1998 to 2018, oil production in Venezuela is down from 3.5 million barrels per day in December of 1997 vs 2 million in October of 2017.
So what happened in the last 20 years? From Wikipedia [wikipedia.org] :
“After Hugo Chávez officially took office in February 1999, several policy changes involving the country’s oil industry were made to explicitly tie it to the state under his Bolivarian Revolution. Since then, PDVSA has not demonstrated any capability to bring new oil fields on stream since nationalizing heavy oil projects in the Orinoco Petroleum Belt formerly operated by international oil companies ExxonMobil, ConocoPhillips, Chevron and Total. Chávez’s policies damaged Venezuela’s oil industry due to lack of investment, corruption and cash shortages.”
Probably just a fluke, though, right? I mean, steel production in Venezuela increased from 3400 tons in 1998 to about 4600 tons in 2008. The steel industry was nationalized by the Venezuelan government in 2008 and production declined to under 1600 tons. Huh, definitely a pattern forming. Similar stories of lower production and losses in the other industries after they were taken over: aluminum, cement, gold, iron, farming, transportation, electricity, food production, banking, paper and the media.
How well does the government run the nationalized oil company, PDVSA? Reuters [reuters.com]:
“The output fall could not come at a worse time, with the economy in crisis and the socialist government struggling to pay its foreign debt.” and “Compounding the situation, another eight managers and employees of state oil company PDVSA in eastern Venezuela were arrested in recent days for fiddling production figures, chief prosecutor Tarek Saab told reporters.
In a major corruption sweep engulfing the oil sector, about two dozen high-level executives have already been arrested in recent weeks, ridding PDVSA of much of its top brass.”
Without the government takeover, even if oil companies we
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Studebaker compares their policies to Saudi Arabia, but says Venezuela is more dependent on oil than anyone else. In fact, they’re 8th, with 7-8% of their GDP from oil. The UAE and Kazakhstan are about 14%. Saudi Arabia is 21%. Oman is 25%. Iraq is 28%. Kuwait is 30%. Angola gets about 34% of their GDP from oil production. (Stats from the World Bank and The World Factbook)
And how many of those are literal monarchies? Or war-ravaged shitholes?
Huh, funny you don’t hear about people starving and rioting in the street from the results of “lower oil prices” in all those countries.
Why would you? When the monarchy has been in power for generations, people are accustomed to being dirt poor and living in shacks. And when they complain, the monarchy literally shoots and kills them. No, they don't riot. They know better. Venezuela's standard of living had actually risen for a while. Now they're reverting to the mean.
It's almost like the form of government has nothing to do with the situation.
Because it doesn't.
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Please. Venezuela's economy is in shambles because of US imposed sanctions. Many people in the US "mine bitcoins to generate cash". What is the deal here?
The deal is that, while half of Venezuela suffers daily hours blackouts, these guys in green get free electricity to mine and keep for themselves quite a few bitcoin.
So What? (Score:2)
Why all the reaction to this?
Slashdot is always full of mockery for 'innovative' patents for old ideas 'done on a computer' yet this case seems to raise a lot of arguments for an exactly parallel use case.
Almost every country mines, drills or otherwise uses natural resources.
In this case Venezuela is 'mining' for Bitcoin - a resource kept in artificial scarcity, but a resource nonetheless. In essence, it's no different from the US mining for coal to use or sell -- except that it's done 'on a computer'.
Both
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. In essence, it's no different from the US mining for coal to use or sell -- except that it's done 'on a computer'.
Except mining bitcoin produces nothing and wastes energy.
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Except mining bitcoin produces nothing and wastes energy.
Agreed. No argument there - but so many other 'economic' activities fall in the same boat.
In my small market town there were (before Covid - not sure now) THREE nail bars operating; these used volatile chemicals with fans venting onto the street to protect the workers - yet produced nothing of value. There are dozens of other "non productive" and "service" type activities I could choose -- including most spectator sports. Now I'm not denying them the
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I wouldn't want to live in the US at the moment, either. The joke going around here right now is, "What's the difference between the United States and a Third World country?"
The answer is, "PR".
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I've lived in a developing country (3rd world makes no sense here) and in the US, and there is a difference.
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It's pretty obvious there's some parts of the US you haven't experienced. Poisonous drinking water, tent cities, hungry children, murderous thugs with badges...I've seen all of these things in the hellhole to the south of my country. The difference, if there is one, is small.
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Capitalist US regime running low on propaganda? (Score:2, Interesting)
Slow news day at the CIA? And Venezuela's economy is mostly capitalist - only the oil industry was nationalized. Don't take it from me, take it from Fox News:
https://www.foxnews.com/world/... [foxnews.com]
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where do you come up with such stupidity....Venezuela is Socialist because they nationalized vast swaths of their economy.
https://www.reuters.com/articl... [reuters.com]
https://tennesseestar.com/2020... [tennesseestar.com]
https://foreignpolicy.com/2018... [foreignpolicy.com]
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In Venezuela they nationalized not just oil, but also aluminum, cement, gold, iron, farming, transportation, electricity, food production, banking, paper and the media, among others.
The only reason the non-nationalized portions of the economy still "dominate" it (the claim made in the article you linked) is because as the nationalized ones have been destroyed over time by the government running them "for the people", they've shrunk to ever smaller portions of the economy.
So yeah, if you have ten dollar bill
Sanctions (Score:2)
President Maduro and his cronies are on US sanctions lists. These bitcoin should be seized. https://en.wikipedia.org/wiki/... [wikipedia.org]
Looks like Venezuela is going to lead the world (Score:2)
Wanting to tell the busdriver ... (Score:1)
.... I want my RTX3080 back!
Capalism is so easy and effective, Hah? (Score:2)
Instead of buying Congresscritters and Senators (Score:2)
"This center of digital asset production will ensure self-financing sufficiency within the military,"
They're paying for their military this way. I will say it's a lot cheaper than the fraudulent ad campaigns the GOP and the military-industrial complex uses in the US to get hundreds of billions every year....