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Have you ever tried to buy bitcoins with our annual internet allowance ($300 per year on online purchases with credit card)? That's one way to get an instant 1000% profit (the official rate is Bs.11 per $ and the black market rate has been swinging between Bs.98-100 per dollar.)

I think holding USD in Venezuela is much more valuable. Most people wouldn't know what to do with bitcoins in the country. With USD, you can sell them in the black market and get bolivares instantly. You can live pretty comfortably here with $200 per month.

It's worth noting that the president, Maduro, had the brilliant idea that by blocking all the sites that report the value of the dollar (like dolartoday, posted by fellow venezuelan climber_mac) in the black market, he would somehow solve all our economic problems. Now you can see why our economy is gone to hell.

I have never bought bitcoin with the allowance. In case anyone is wondering, the government sells each Venezuelan $300 per year at the official exchange rate. This is the only amount that we're given without having to go through a lengthy process that typically involves having 'friends' within the government to pull strings for you. People usually buy Amazon gift cards with the money.

It's too scary to put your money in another volatile currency - I suppose people prefer dollars because they are stable and can be spent on popular e-commerce sites.

Are there no alternative currencies in Venezuela (like the Palma in Brazil)?

http://en.wikipedia.org/wiki/Banco_Palmas

I don't know if they have an alternative currency but there are some community banks similar to that one operating there (http://www.bankomunales.com/ (in Spanish)).

Cool, thanks for the link. For anyone else interested...

"Fundefir created a model of self-managed financing called Bankomunales con K, based on the exclusive use of funds from members of community groups, as a source of financing."

"Currently, there are around 150 groups, or Bankomunales, in 9 Venezuelan states."

Does anybody there take out loans in Bolivar, use the Bolviar to buy $300 at the official exchange rate, then sell a few of those purchased dollars in the black market to repay the loan immediately?

ye this is a pretty common practice, in fact, this is mainly the reason of why we have such high inflacion (because there is people, who, of course are gov related but also anti-gov, who only care to make free money from exchange corruption and they have alot of intentions to keep this going on).. also there is a 3000$ allowance to expend in travels wich you pay at 11 Bsf per USD, wich made a huge business for your average joe people since you pay the gov 33k Bsf but once you "cheat" the system, you get a return of 270k BsF after paying the gov. This is the major reason of all those flights problems in our country, because in order to get this 3000$ quota, you need to buy a plane ticket, airlines also want their cut on the huge bussiness so they sell overpriced tickets that people who will "cheat" will still buy, also note that the "big debt" that the gov has with the airlines is because when airlines sell a plane ticket in BsF they take the 100 Bsf Per USD rate, but then they expect the gov turns all those BsF into USD at official 6,3 rate, thus the gov "owes" the airlines billions of billions.

Anyways this is just a resume to see how everything is related, anyways as alot of people says here, bitcoin wont help at all. Sorry for mistakes in english . :) Edit: BsF = Bolivar

"Have you ever tried to buy bitcoins with our annual internet allowance ($300 per year on online purchases with credit card)?"

Wait, what ? What is an "internet allowance" ? How would one credit card issuer know if you had already spent $300 using a different credit card ?

How can this possibly be a thing ?

The govt created this central organism that controls your annual foreign currency allowance (it was called Cadivi, now called cencoex). You need to submit a bunch of docs to the bank you want your allowance at. So you can only spend your money using the credit cards issued by that bank.

For example, I sent in my papers to my bank at the beginning of the year. They activate my cards with that bank to be used online. You cannot use any other bank for online purchases.

We also get a $2500 yearly allowance for spending outside the country (if you travel) under a similar, more bureocratic mechanism.Unfortunately, since the govt has a MASSIVE debt with international airlines, most of them have cut most of their flights and you cannot get a flight out of Venezuela unless you are rich and can pay in dollars.

> Bitcoin won't solve our problems because no one will want to sell for Bolivares.

Price is everything.

Sure, people might not be willing to buy Bolivares in exchange for bitcoins according to the "official"/government set dollar price, but what about at 74,000 Bolivares per bitcoin, 74,000,000 Bolivares per bitcoin, 784 Bolivares per bitcoin? That's how a market forms.

Once upon a time (only a handful years ago), no one were willing to sell US Dollars for bitcoins either. Until there was, and now many people are willing to sell bitcoins for dollars.

The only thing that might prevent this from happening is regulation, which I imagine will be imposed in countries that already have USD controls, if people start using bitcoins to circumvent capital controls on a larger scale. But that's not really a problem of bitcoin, but rather the problem of an oppressive government.

Bitcoin is just a part of the solution, a single arrow in the war against the disgusting institutionalized theft being perpetrated by the Venezuelan government.

Other "arrows" include the existence of a thriving black market, competition from other currencies (ie the US dollar), the $300 stipend, the barter system, etc. All these give the citizens a choice to not use VEF for transactions, and as demand for something goes to zero (especially in the face of ever-increasing supply), so goes it's value.

Regarding crypto-currencies specifically, if it is proven that there is a market for "Bitcoin plus alpha" (eg guaranteed convertibility for USD - probably not gonna happen but for example) tailored for the Venezuelan market then you can bet someone is working to make that "V-coin" a reality.

So don't look at Bitcoin as the silver bullet solution to solve Venezuela's woes, but rather as a significant step in the war against oppressive government.

People in Venezuela will still need Bolivares for everyday life, though. So, just like people now buy USDs or Euros as savings they could also do it with bitcoins I guess, no?.

Also, as far as I know, it's illegal in Venezuela to buy/sell foreign currency outside of the systems provided by the state. The anonymous nature of bitcoins could be an advantage in that sense.

> because no one will want to sell for Bolivares

What about tourists? You should encourage tourists to bring bitcoins.

Tourists generally don't go to Venezuela because the country is extremely unsafe. The capital, Caracas, is ranked as the second city with the highest murder rate in the world [1]. There is an extremely low regard for life - petty criminals will kill you for your phone.

However, we do have some of the most unreal places on the planet! [2]

[1] http://www.theguardian.com/world/2014/jan/12/violent-crime-m...

[2] http://1.bp.blogspot.com/-4ghbtqN0bRY/TyV8kLJVivI/AAAAAAAABX...

It's a shame. I visited Caracas and Isla de Margarita for about a week 10 years ago. It's a very beautiful place and the people I met were very friendly. I hope the situation improves. Would love to visit again!

Damn, that's a nice waterfall. Not "worth dying over" nice, but close to it.

That's the Kerepakupai Vená or Angel Falls, highest waterfall in the world [1].

[1] http://en.wikipedia.org/wiki/Angel_Falls

You're half right: "tourists" are the one of the solutions, but you can't easily turn Bitcoin into food.

There's a booming trade in the port cities. Sailors bring dollars, which they trade for sex. That turns prostitutes into currency traders. Bloomberg had a story about this earlier this year.

http://www.bloomberg.com/news/2014-06-09/venezuela-prostitut...

Yeah, this. I would much preferred to have taken in bitcoin.

Either you use the ATM and everything is 3x as expensive as it should be or you carry around a minimum of $1000 on your person in one of the most violent countries in the world.

$300 of my USD stash got stolen by the Venezuelan army guard while strip searching me on the border with Colombia.

How did Veneuzuela end up like this ?

When attempting to consolidate power very destructive economic policies are often used out of fear that those forces could threaten ones' power. Similar thing happened in Zimbabwe. Russia is on this same path now too.

Venezuelans who can should request to be paid in bitcoin from foreigners. This probably would work best for those abroad since the bitcoin can be remitted as if there was no border at all. Venezuelans who have knowledge labor -- programmers, researchers, data entry, could also be paid in bitcoin. Eventually when enough people have bitcoin it could also be used to exchange value without the country.

Communism.

Venezuela is socialist democracy, as there are democratic elections and multiple political parties. Policies of nationalisation under Chavez, though, probably did contribute to the current problems, as they caused a flight of capital.

http://www.reuters.com/article/2011/12/01/venezuela-national...

Way to over simplify things. Present-day Venezuela is very far from being communist even though the current government likes to market itself as such.

The reason Venezuela is like it is now is an incredibly complex subject spanning several decades of bad governments, corruption, oil money dependency, social inequality, etc ... accelerated by a particularly disastrous current government.

Why don't you mine for BC using the super-cheap gas (6 cents a gallon)? (the ultimate insult to environmentalist, such as myself, everywhere)

You mean using a gasoline generator to power the miners? I wonder if using the house electricity isn't cheaper. If it cost more, wouldn't people all begin using generators?

Gas is apparently 0.06 cents (USD) a gallon. A gallon of gas provides roughly 30 kW/hr. How much is a kW/hr of electricity in Venezuela? If it is more than 0.002 (USD) a kW/hr you might be better of w/ electric generator. Anyone have any more recent numbers? I see an article from 2013 that says prices in Venezuela are roughly 0.03 cents per kW/hr. Maybe someone can check these calculations. Could have made an error.

I think there paying far more than 6cents per gallon.

Still, you forget generators are less than 100% efficient. At 30% that 30kW/hr = 9kW/hr for 6 cent. = 1.5 cents per kW/hr + cost of generator which is far from free.

Anyway, your far better off just selling the gas.

I think it is the efficiency that I didn't consider. As far as I know, gas is roughly 5 cents a gallon.

For comparison I suspect you could easily get 1$ a gallon by just selling that gas. Using a mid sized fishing boat you could probably move ~1 to 10k gallons from the ships's fuel tank to a near by country without that seeming odd. Make that trip once a week and your living the good life without doing anything 'odd.' Hell I suspect you could simply meeting other fishing boats at sea fill their tanks for cash or even fish which would be next to impossible to catch.

Would using BTC for remittances have any advantage to the way people currently do it?

How is it usually done now? Through USD?

Is holding USD in Venezuela more valuable than BTC?

Remittances are all about cash management, where BTC doesn't help. There is (was) a company called Buttercoin that wanted to do it, but I think they have since switched to a white label exchange model.

would they sell "things" for bitcoins?

But what is there to sell? Every industry has received incredible shock from the economic situation, there are no dollars to import material goods from the outside so that they can support themselves. Besides, I can't think of anything other than oil that others would be interested in buying.

Not sure if I understood your question correctly, sorry if this doesn't answer it!