Venezuela is not doing so well. Economic turmoil and political tensions have made this oil-rich country fall to its knees. Extreme inflation has made the currency of this country, Bolívar, to depreciate greatly. Bolívar no longer has any buyers anywhere in the world, and its value is very low. It seems that these severe and complex economic problems make Venezuelans to turn to using cryptocurrencies and replace Bolívar with cryptocurrencies such as Bitcoin. However, it seems that this solution is not doable either. However, why?
Will Venezuela Benefit from Cryptocurrencies?
Despite that fact that using cryptocurrencies is a high-capacity solution for the development of countries such as Venezuela and can very well resolve inflation problems, but the complexities in its use in addition to being unknown to people hinders its effectiveness in the country of Venezuela. It seems that, currently, the people of Venezuela are not prepared enough to use cryptocurrencies and the statistics of people who use cryptocurrencies in this country are related to those people who employ cryptocurrencies and Blockchain for international foreign currency payments or want to receive their freelance payment from others outside their country’s borders.
You Can’t Buy Food with Bitcoin, Can You?
In the current situation of Venezuela, buying necessary goods is not possible using cryptocurrencies. The people of this country cannot pay with Bitcoin or other cryptocurrencies to buy bread and food. For this reason, they prefer to flee from their borders and move to countries such as Columbia. In other countries, they receive the payment of the work they do in dollar or they exchange their payment to the dollar. In this way, they can live their day-to-day lives and pay for their needed daily stuff. So, one of the main reasons for not being optimistic about the growth of cryptocurrencies in countries that suffer from numerous economic and political issues is that paying for needed daily stuff is not possible with cryptocurrencies. Perhaps in the coming years, and with the growth in the acceptance of cryptocurrencies and the creation of infrastructures and software that easily allow for the transfer of cryptocurrencies, economic crises will largely be resolved. However, currently, the capacity and possibility for this use and development is not available.
Do Cryptocurrencies Help Resolve Economic Crises?
As it was mentioned earlier, in case of the existence of infrastructure and the possibility of simple trade of cryptocurrencies in public and widely usable formats, the use of cryptocurrencies in crisis-stricken countries will be made possible. For example, the program and project of Facebook in creating the possibility of transferring cryptocurrencies via messaging apps can pave the way for the existence of Bitcoin and its counterparts as the savior of weak countries economic-wise. The analysis of cryptocurrencies and the way they can go indicates that we are still in the beginning steps of the growth of this newfound technologies. Cryptocurrencies have a great capacity to grow. If Blockchain-based transactions and trading cryptocurrencies became as simple as sending a message from a device to the other, then many of the economic problems such as high inflation in different countries of the world will be resolved.