It is no secret that in recent years, Venezuela has experienced one of the deepest economic crises in the world. With inflation eroding the value of the bolivar, the local currency, Venezuelans have sought ways to protect their purchasing power and this is where Bitcoin comes into the picture.
Bitcoin, a very popular cryptocurrency, operates through a network of distributed computers, making it independent of any national economy. This is crucial for Venezuelans, as massive inflation has caused bolivars to steadily lose their value. Instead of holding money in bolivars, some people are choosing to store their money in Bitcoin, which has proven to be a more stable store of value in the long run.
Examples:
Imagine that Juan, an average Venezuelan, has 100 bolivars. Today, those 100 bolivars can buy a loaf of bread, but in a month, due to inflation, those same 100 bolivars may not be enough for even one slice. Juan decides to convert his bolivars to Bitcoin. Although the value of Bitcoin also fluctuates, in the long run, it tends to be more stable and sometimes even increases in value. This gives Juan the ability to maintain or even improve his purchasing power amidst inflation.
Maria lives abroad and wants to send money to her family in Venezuela. With Bitcoin, she can do so quickly and without paying the high fees charged by traditional banks. Her family, once they receive the bitcoins, can decide whether to convert them to bolivars (only what is necessary) or keep them in Bitcoin to avoid losing value due to inflation.
