Venezuela bans Bitcoin mining and confiscates 11,000 Asic miners – BitcoinBlog.de – the blog for Bitcoin and other virtual currencies

Bitcoin mining is popular in Venezuela because of low electricity prices. But now politicians are taking action against it – they are issuing a kind of ban and closing a large mining farm.

In Venezuela, the old insight is being confirmed that it is not enough to offer cheap electricity to be a major mining power – without a powerful, easily scalable power grid, it doesn’t work.

Venezuela may have one of the cheapest electricity prices in the world, at less than 5 dollar cents per kilowatt hour, but the grid itself is apparently not prepared for mining. To protect it from overload, the government is now apparently taking stronger action against Bitcoin mining by announcing a kind of complete ban and confiscating more than 11,000 devices.

Venezuela’s Ministry of Electricity wrote on Instagram on Friday: It had initiated a “special plan for load control” that “targets heavy consumers linked to digital mining.” The purpose of the plan is to eliminate all crypto mining To disconnect farms in the country from the power grid to avoid the high impact on demand. “This allows us to provide an efficient and reliable service to the citizens of Venezuela.”

So, according to the Ministry of Electricity, Bitcoin miners have reached a scale in Venezuela that it is no longer possible to keep the power grid reliable as long as they siphon off the available electricity. The content of the post sounds like a complete ban, but a temporary measure would also be conceivable.

A day later, Raphael Lacava, the governor of Carabobo state, where much of the country’s industrial base is located, presented the seizure of more than 11,000 mining devices. He writes, also on Instagram:

“I have asked for the greatest possible collaboration to improve the situation of the electrical system in our state. It will only be temporary, but it is necessary so that people no longer suffer.” The governor also describes a dramatic electricity supply situation, but calls a mining ban only temporary.

In a video accompanying the post, he shows himself in a mining farm in an industrial area near the provincial capital of Valencia. He walks through the farm and points in disbelief at the many mining devices – “there are thousands, more than thousands!” – and explains that he has unplugged them because they are “practically stealing thousands of kilowatts from the nation.” “at the expense of the population.” Apparently the power supply for the whole of Valencia was threatened.

Power outages and grid problems have long plagued Venezuela. It is difficult to say whether the power outages have actually intensified this year. Reuters reported in March that a power outage had even shut down the country’s largest oil refining complex, the Paraguana Refinery Complex. Such blackouts, the news service comments, regularly affect Venezuela’s refineries and oil terminals. There are regular reports of power outages in the Spanish press, most recently at the end of April this year.

Of course, it is impossible to say whether crypto mining is actually the cause of the power outages or a welcome excuse for the fact that corrupt ministries have criminally neglected the construction and maintenance of the power grid. However, one can assume that the presence of crypto miners will quickly push weak power grids to their limits when electricity prices are low. If electricity prices are set by the state, they quickly lead to a shortage; the price and the relationship between supply and demand are becoming increasingly different.

Either way, a country like Venezuela is only partially suitable for being a major mining power – despite its rich energy sources.