Sunday, August 14

“It will always be profitable to mine Bitcoin in Venezuela”: Miner Alexis Lugo

Key facts:
  • Sunacrip has accelerated the industrialization of mining in Venezuela, according to the specialist.

  • There is no exact way to know how many Bitcoin miners are operating in Venezuela.

Bitcoin (BTC) mining in Venezuela is a profitable activity, with which good profits can be made. For this, there are two conditions: operating under the law and necessarily adding recurring electrical failures to the business model.

This was pointed out to CriptoNoticias by the Venezuelan miner, CEO of Criptoneros and BTC enthusiast, Alexis Lugo, during an exclusive interview. According to the specialist, “you will always suffer blackouts” if you want to extract cryptocurrencies in the country, even doing legal, regulated activity and in an industrial zone.

When they are engaged in this activity, they must be clear that there is going to be a part of their activity that is going to be affected by power outages. In general measures, if you are a miner, the fact that the power goes out has to be a factor to include in the business model, and even if the power goes out every day for up to 4 hours, it will always be profitable to mine Bitcoin here.

Alexis Lugo, Venezuelan Bitcoin miner.

Lugo highlights that this profitability is also granted by being part of a recognized or regulated industry. This, he says, has been accelerated by the measures taken by the National Superintendency of Crypto Assets and Related Activities (Sunacrip), that has promoted a legal framework to operate with cryptocurrencies.

“It is positive, because I agree that we are graduates and have to pay taxes in some way, because this way the industry becomes visible and gains weight within the industrial park of Venezuela,” he commented.

Alexis Lugo provided us with photographs of his mining equipment in operation / Source: Alexis Lugo.

Impossible to know how many Bitcoin miners there are in Venezuela

Alexis asserted that there is no exact way to know how many Bitcoin miners are operating in Venezuela, since just as there are organizations and companies that adhere to the law, “there are many others that mine clandestinely.”

Venezuela’s electricity consumption with respect to BTC mining, he says, is 0.1% of the total. “And that is a lot of electricity that we are moving in the Bitcoin network,” he suggested. “There are many miners in Venezuela, but it is impossible to know how many there are,” he said.

Lugo points out that mining in Venezuela, while profitable, does not mean that it is easy. “When you go to mine you have to start by choosing the space, and comply with the legislation, which says it has to be in an industrial zone,” he said.

But there are limitations: “You are not going to rent an industrial warehouse if your operation is going to be up to 50 machines, because the costs are very high”, so you should aim for about 100 machines, as required.

Once the problem has been overcome, he described, it is necessary to clarify what concerns the electrical issue, presenting the project in Corpoelec and bringing a draft of the constitutional act of the mining company to Sunacrip. Then at the end, you get the permission. However, it is good to clarify that, in general, complying with all this requires a reasonable amount of time and is not as simple as it is shown.

“It is already beginning to be seen that the number of steps to legally mine in Venezuela are quite enough,” he said, adding: “a small operation [de 10 mineros] It is very difficult to achieve this in Venezuela, especially if you are alone, because this requires investment.

“If you have space and investment capacity, it will surely be good for you, as long as regulations and legality are followed. It can always be done clandestinely, but you have to understand the risks you can run, “he explained.

Venezuelan bureaucracy, “very heavy”

Lugo stressed that in Venezuela the bureaucracy, which has always existed, “is very heavy” and the issue of mining does not escape from that.

“They ask you to register in this organization, but you must have a specific document and the bureaucracy begins, something that has always been the case, and the governing body of cryptocurrencies, Sunacrip, does not escape that. It is not impossible to do it, but it is bureaucratically burdensome. So if you have the purchasing power to pay a person who is dedicated to that [gestor]You can have your papers up to date, fast, expeditiously, “he said.

But it is good, in his words, “because it filters out malicious entities.” «It is a way of filtering the activity. If you want to do it without a license, you can do it, but at some point the law will fall on you, “he warned.

Sunacrip is always there, pending and knows who you are. It may take time to do the inspection, but it will always come. All of us who do activities in crypto-assets should be registered in the Comprehensive Registry of Services in Crypto-assets.

Alexis Lugo, Venezuelan Bitcoin miner.

Alexis has been a cryptocurrency miner for five years / Source: Alexis Lugo.

Several cryptocurrencies are mined in Venezuela

Alexis Lugo emphasized that in Venezuela is mining Bitcoin, to a large extent, but there is also room for other cryptocurrencies, What ether (ETH), the currency of Ethereum and litecoin.

It also indicates that the activity is carried out with GPUs, or graphics cards, and ASIC miners. In your particular case, mine with the Antminer S9, from the china Bitmain. Lugo provided us with images of some of his miners, some ASUS GPU rigs.

With regard to hardware, he touched on the issue of the Chinese ban, a situation that he appreciated, since it generated, in his words, a “boom time”, where anyone who wanted to start in the activity, was going to be able to do so.

The large number of mining companies that freed themselves from China did two things: they moved to other countries, such as Kazakhstan, Iran or the United States (…) and sold their hardware, and much reached this hemisphere, where Venezuela was no exception : very cheap mining equipment was obtained and it was the moment where people could enter the business and obtain their return on investment in less than five months.

Alexis Lugo, Venezuelan Bitcoin miner.

Can Mining Contribute to Venezuela Recovery?

To close the interview with Alexis Lugo, we asked him if the Bitcoin mining industry could influence an economic advance in Venezuela. He affirmed that, although it is what is wanted, right now it is a very difficult task.

“We want [los empresarios] that mining helps the recovery of the country, but it is difficult to do so. I would like it to be like that, and that’s what we were going for, but there are actors who see the Sunacrip drives in a prohibitive way, “he said.

Lugo believes that a lot of money is needed to be able to dedicate himself to the mining activity, although electricity in Venezuela is cheap and there are many options to connect to the Internet. “The truth is that setting up a mining farm is quite expensive, especially in the electrical installation part,” he commented.

“I want mining to help, yes, but at the moment it is somewhat difficult for it to happen,” he concluded.

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