Bitcoin mining is an extremely dangerous profession in Venezuela. A woman and three men have been arrested for "cyberfraud" and electricity theft in Charallave, a small city south of Caracas.
Their "crimes" were operating 300 Antiminer units and selling bitcoins on a commercial website, the Director of the Computer Crime Division of the Scientific, Penal and Criminal Investigation Corps Douglas Rico revealed. The four reportedly sold the bitcoins on the Colombian/Venezuelan border which affected the consumption and stability of electricity in the area.
Disturbingly bitcoin mining is not illegal under Venezuelan law, Ars Technica reported. That does not seem to stop the nation's law enforcement which now regards basic capitalism as a crime.
Venezuelan bitcoin miners use the cryptocurrency to purchase Amazon (NASDAQ: AMZN) and Walmart (NYSE: WMT) gift cards. They use the gift cards to buy items that are scarce in Venezuela because of hyperinflation. Many families in the country now depend on bitcoin for food and other items their country's dysfunctional economy cannot provide.
Secret Police Target bitcoin
Unfortunately the Marxist thugs who run Venezuela's police agencies see the bitcoin miners as criminals. Strangely enough the same government that punishes average people for entrepreneurship subsidizes bitcoin mining by selling electricity at incredibly low prices.
Venezuela is also suffering from electricity shortages because a drought is depriving the country's hydroelectric plants of the water that they need to operate. That has forced many miners to move their operations to places like industrial areas where electricity is less likely to be interrupted.
Venezuela is one of many countries where average people use bitcoin as a hedge against hyperinflation and monetary policy changes. Expect to see many other nations follow Venezuela's lead as both a center of bitcoin mining and of economic oppression.
Millions of average people throughout the world will turn to bitcoin in order to trade and in some cases eat. Sadly enough many politicians and bureaucrats will turn on them.
State Legislators Target Bitcoin
A state senator in Washington State wants to ban the use of bitcoin for marijuana use. Senator Ann Rivers (R-La Center) has introduced Senate Bill 5264 which would make it a crime to buy cannabis with bitcoin, Geek Wire reported.
Rivers is afraid that bitcoin payments would allow marijuana buyers to preserve their anonymity. It sounds as if Rivers wants to track marijuana users down and punish them.
"There's no tracking of cryptocurrency," Rivers said.
That means you can sell it for cash but most banks will not take the proceeds of marijuana deals. Bitcoin is one way that legal marijuana sellers can get around that ban. Many marijuana retailers use bitcoin ATMs as "banks."
One reason why Rivers wants to ban bitcoin is to suppress legal marijuana sales. In the United States, marijuana is illegal under federal law but legal in many states. With no bitcoin many marijuana dispensaries would have to shut down while the dealer on the street corner would stay in business.
The Luddites will come for the Bitcoin Miners first, then for the rest of us
Expect to see neo-puritans like Rivers step up efforts to ban or suppress bitcoin because it lets free citizens get around government controls. As cryptocurrency spreads so will the reaction to it and oppression directed against its users. Even American users of bitcoin have reason to be afraid and get politically involved.
The situation in Venezuela and Rivers' bill should be wake up calls to all interested in tech. Luddites are growing in power and getting more aggressive, so everybody interested in modern technology should pay attention. Bitcoin will be their first target, after they are finished with the bitcoin miners the luddites will come for the rest of us.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.