Bitcoins have recently gained interest as a protective measure. Government agencies and banks have started to hoard bitcoin to ward off hackers. DDoS hackers know they can make ransom deals with organizations, which now are becoming keenly aware of how to keep the peace. But still bitcoin users stay a minority.
However, analysts are predicting that Venezuelans will be buying bitcoin more as the country faces more economic uncertainty. The country is currently grappling with the highest inflation rate in the world (about 500 percent), and so, some businesses and citizens have already cashed in bolivars for bitcoin in order to purchase basics, like food and medicine, and also pay employees. Some Venezuelans say they’ve used the bitcoin for their savings. There have been additional instances of Venezuelans buying bitcoin to purchase Amazon gift cards, as well as other goods online, that can be delivered to them, as even simple products like toilet paper have disappeared (or can be paid for at very high prices) from store shelves.
Brokerage website SurBitcoin, which helps Venezuelans to buy and sell bitcoin, said there were more than 450 bitcoin in Aug. 2014, but by Nov. 2016, that number leapt up past 85,000.
Just this past week, Venezuelans hastily swapped the highest-bill bolivars for bitcoin as the government decided to pull the smallest bills from circulation and replace them with larger notes in an attempt to fight profiteering. Citizens responded by saying it would cause an already terrible problem to worsen. And then, some of them started swapping bills for bitcoin.
One reason for the anticipated escalating popularity hinges on the currency being free from central bank or government control and it being seen as a safer currency alternative.
Arguably, the bigger reason, however, is that citizens only need a phone, computer or online wallet to store those bitcoin and then exchange them on the black market at what experts say is turning at about five times the exchange rate.
“There is a growing interest in the technology. More and more people from different industries are getting on board,” Jorge Farias, CEO of exchange platform cryptobuyer.io, told The Guardian.
Although bitcoin can face hot volatility, it is arguably more stable than the bolivar, which depreciated by 60 percent this past month. Experts say many citizens have lost faith in the bolivar, and many of them — especially tech-focused Venezuelans — are now preferring to be paid in bitcoin.
Around June 2014, a bitcoin was worth 40,000 bolivars, or $630. Now, a bitcoin is worth just under 2 million bolivars.
For more bitcoin news, check out PYMNTS’ Bitcoin Tracker.