Venezuela has the largest proven oil reserves in the world.
Bigger than Saudi Arabia. Bigger than the US.
And yet, it is among the world’s poorest countries.
In a very short space of time it has gone from being Latin America’s richest to its poorest country.
It has an inflation rate of 40,000%, and the monthly salary of a minimum-wage worker is less than $1.50.
There is almost nothing ordinary citizens can do to combat these conditions. It’s the result of political corruption at every level.
As a result, 87% of its people live in poverty.
And Venezuela is a big country. Its population is 32.3 million. So that’s some 28 million people living in poverty.
But while its people are powerless to end the corruption, they can, and are, circumventing it with cryptocurrencies.
For the last year or so now, I’ve seen numerous arguments for using cryptocurrencies in corrupt countries like Venezuela. But very few real-life examples. Last week, that all changed.
Can crypto defeat corruption?
Bitcoin was made as a response to the 2008 financial crisis. Its creator saw how little control people have over their own money and decided to build something to change that.
The whole idea of cryptocurrencies is that you don’t need a central power to issue them. You don’t need a central authority to trust them. And, perhaps most importantly, no one can shut them down.
And while bitcoin’s price has fluctuated massively over the last year, it’s nothing compared to what the Venezuelan bolivar has done.
Cryptocurrencies are also much easier to keep out of the hands of corrupt authorities. Authorities can easily seize a wad of cash under your mattress, or raid your bank account, but it’s harder for them to find, trace and steal cryptocurrencies.
In fact, if citizens were to use privacy focused cryptocurrencies like Monero, governments could never even discover people’s balances. However, that’s an issue I’ve already covered here.
As for today, I’m focusing on Venezuela. Because last week an incredible story of kindness, hope and cryptocurrencies emerged.
Venezuelan worker feeds ten families thanks to NANO cryptocurrency
Last Sunday, a Reddit user posted this on a bitcoin Reddit.
As you can see it garnered a lot of community interest and comments.
Further down in the comments, the user says he works 50 hours a week for a transport company and earns $1.61 a month.
Following this post he was sent 0.5 NANO – a cryptocurrency I have written about before in my free beginner’s guide to crypto: part 2.
NANO is based on a different structure to bitcoin called a DAG. This means there are no fees to use NANO and its transactions take less than a second.
So that makes it perfect for sending tiny transactions. What you send is what they get, in less than a second.
(I have written about the difference between DAGs and blockchains before here. Have a read if you want a simple explanation of the basics and benefits.)
At the moment 0.5 NANO is worth about one month’s wages in Venezuela. So, as you can imagine, this man was overjoyed.
He made a post on the NANO Reddit to thank the community and then things snowballed.
The response to this post was even bigger than the one to his first post and he was inundated with donations.
Now, you’re probably wondering if this guy was just a scammer out to make a fast buck. So, after some conversation, he also posted a photo of his passport along with his Reddit username.
Then he went dark.
No one heard from him for a few days.
Then suddenly he posted this:
Venezuelan user: I bought +102 kg of food today (UPDATE)
I feel extremely happy because today I was able to convince someone who I trust to accept NANO (he was already accepting bitcoin cash) in exchange for food. He sold me 102 kilograms (224 lb) of food, including cornmeal, meat, rice, sugar, beans, sauces and avocados…
This is wonderful because I’m hoping to send proper food to the people. This morning someone came to my house and asked me for food and of course I gave them some kgs. Her face was pure joy. This would be the same for others 10 families who will receive love and food tonight from you guys.
Thank you so much. I can’t express in words how I’m feeling today. It’s amazing what this Reddit community is doing for my family, my neighbors, and all these people in need. NANO could change their lifes and I will help them to know and use NANO. This is already improving and chaging their lifes for better!
I took pictures after I brought the food to my house. I took several precautions to avoid being extortioned by policemen; they would have taken everything from me if I got “caught” with food. https://imgur.com/a/zrSVOYc
We bought 102 kg of food with 29 NANO or $80.
Thanks to the help of random people on the internet, and the magic of cryptocurrency, he’d managed to buy enough food to feed ten families in his community.
He also posted this photo of the food he’d bought, with his username on a piece of paper for proof.
But that wasn’t the end.
Since then, his story has exploded over the crypto community, and he’s received hundreds and hundreds of NANO.
Here’s a screenshot of his wallet address I took on Friday:
That 273.5 NANO is worth $710… or 36 years of wages to him.
He says he is working on getting even more food to feed his community and to get them medical supplies.
This small story shows the power of that cryptocurrencies have to help people living in corrupt states all around the world.
Many people don’t like the fact no one entity can control cryptocurrencies, but when you see stories like this, you understand why that is such a good thing.
If you want to learn more about how you can invest in cryptocurrencies for yourself, you should read my colleague Sam Volkering’s book: Crypto Revolution. It’s the perfect introduction and Sam is the most knowledgeable crypto investor I’ve ever come across. If you want to learn more about how you can invest in cryptocurrencies for yourself, you should read my colleague Sam Volkering’s book: Crypto Revolution. It’s the perfect introduction and Sam is the most knowledgeable crypto investor I’ve ever come across. Get your copy here.
The main issue I now see with this story is it may gather so much attention that the poster may be tracked down by the Venezuelan authorities.
He has stated that he’s taking extreme security steps, however. And it looks as though he’s using a “throwaway account” on Reddit, which will make him very hard to track.
Something tells me this story has further to go yet, so I’ll be following it closely and keeping you updated as things progress.
But, next time someone tells you cryptocurrencies are useless, or just “magic internet money”, remind them that they are literally being used to save lives.
Cryptocurrencies are the ultimate safeguard against corrupt authorities.
Not all of us get to live in peaceful places. And for those that don’t, cryptocurrencies can be a lifeline.
Until next time,
Editor, Exponential Investor