Coin News

On July 1, 2018, Héctor* received 0.5 nano. The transaction was a first for the Venezuelan, and he received it thanks to a donation from one of his fellow countrymen. To some, the roughly $1.80 sum in USD may be inconsequential. But to Héctor, whose country’s native currency is worth next to nothing, it was a godsend.

“0.5 nano is almost one entire monthly salary in my country. It's more than I made last month,” he wrote in a post celebrating his newfound wealth on the r/nanocurrency subreddit.

Fast forward a few days to July 5. After a round of direct messages and a post update to list his Nano wallet address, Héctor had amassed 360.68 nano (nearly $950). With these funds, Héctor was able to purchase some 224 lbs. of food for 29 nano, according to an update he shared with the nano community in a new Reddit post.

“When I told my family about "las monedas virtuales" I got from a Reddit post, my dad gave me a huge hug because it was a relief for all of us. We are five in our house, four of us are adult and we work in different areas. Every month when we get paid, our salaries weren't enough to buy basic supplies or even food,” Héctor told Bitcoin Magazine in an interview.

“We were almost running out of food some days ago; it was common for that to happen every six or seven days after getting paid. With the 3 NANO (around $8 USD) we were able to buy food for the whole week and that's only something to be very happy about, something that doesn’t happening very often,” he continued.

Cryptocurrencies have become increasingly popular in Venezuela as a form of private money in the country’s faltering economy. So popular, in fact, that the Venezuelan government has co-opted the movement to issue its own national coin. The petro, as it’s called, is President Maduro’s attempt to resuscitate the nation’s economy. Allegedly backed by commodity reserves like oil and gold, analysts have also speculated that the currency is an avenue for the Venezuelan government to circumvent international sanctions.

Petro aside, as Venezuela’s national currency, the bolivar, continues to hemorrhage in value amidst worsening hyperinflation, Venezuelans have turned to cryptocurrencies like bitcoin and nano to buy basic necessities on the mercado paralelo — the black market.

“On Facebook it is extremely common to see groups with thousands of hundreds of people talking about getting free money during airdrops,” Héctor said in our interview. “They talk about exchanging the token or the currency they get from the airdrop to Bitcoin and then trade it on LocalBitcoin or any other exchange for bolivars and then spend it on goods.”

Still, it’s not always easy to find a dealer. Given the Venezuelan government’s crackdown on private currencies and assets, you have to be cautious, and you have to know where to look.

“You have to search carefully to find someone willing to sell you goods directly for cryptocurrencies,” Héctor told us. “Cryptocurrencies — and any other currency but bolivars — are banned for all citizens, so it has always been common to buy assets, coins, foreign currencies, tokens, etc. in the black market (or "mercado paralelo" as people refer to it) by contacts, friends, family members who travel abroad and brought cash with them.”

It feels unsound — and ironically unsympathetic — to call an underground marketplace of basic necessities and food stuffs a black market. But by official standards, the Venezuelan government and police force do treat these hubs and their transactions like an illicit market. In fact, buying food in any large quantity, Héctor indicated, is illegal.

“In Venezuela the police — if we can refer to those thugs with uniform as policemen — are extremely corrupt. Buying food in large quantities, it doesn't matter if you are buying from supervised retail stores, is already a crime. The dictatorship recently sent the army to markets to confiscate goods being sold at black market prices,” he stated in the interview.

When transporting the food back to his home, Héctor revealed that he had to take extra care to not be caught with more than a modest haul.

“If I get stopped by an alcabala and if they would have inspected me, they would have found food and it certainly would have been confiscated. It applies not only to food but to absolutely everything that is being transported in ‘large’ quantities. You need to bribe the official to get off from getting your goods confiscated if they stop you,” he said.

This is the first time that Héctor bought food from the black market and, given the reserve of nano in his wallet, it likely won’t be the last. In our interview, he conveyed that, while bitcoin is the most entrenched cryptocurrency in the country, bitcoin cash and nano are beginning to cultivate a presence of their own, thanks to lower transaction fees.

With the nano left in his wallet, Héctor hopes to pay it forward in the same way it was passed to him — by donating to other Venezuelans so that they might be able to put food on their own tables as well.

In His Own Words

Héctor was glad of the opportunity to share his story, and he especially wanted to highlight the promise that cryptocurrency offers to those in Venezuela:

"Cryptocurrencies in general have a great future ahead. Not only inside the global economy but also for the smallest unit in society, the family. In Venezuela there are millions of families risking their freedom to escape the economic controls the Venezuelan dictatorship imposed against us.

"We are not only fighting in the streets in form of protests, strikes and negotiations with the government, we are fighting for our freedom every time we successfully exchange freely our labor for something we are demanding from the market, escaping price controls when store owners are obliged to sell their goods at the price the government imposed to them, but then the store owner has to close because it's not profitable.

"Risking to sell goods ‘underground’ would expose him after receiving [an] unusual amount of bolivars in the bank account because the government is supervising the store owner's bank account.

"Cryptocurrencies have the property to help these people, and also help the consumers who want to buy something, but it's restricted by the government to be permitted only 1 or 2 items every week during certain hours of the day.

"Venezuela is what a country with almost zero economic freedom looks like, and many are at risk of ending up like us. One important focus the cryptocurrency community has is to fight for our freedom and I congratulate you guys for standing for what is yours.”

*Héctor is an alias used to protect his identity.