Crypto Mining Banned in Venezuela, Thousands of Machines Seized

The process of mining cryptocurrencies needs advanced mathematical equations to be solved on energy-intensive computers which need to always remain plugged-in.

Written by Radhika Parashar, Edited by Siddharth Suvarna | Updated: 20 May 2024 15:58 IST

Crypto Mining Banned in Venezuela, Thousands of Machines Seized

Photo Credit: Bloomberg

Crypto mining requires boatloads of power supply that disrupts electricity distribution

Highlights

Venezuela is trying to reduce power outage instances
Crypto mining, per year, uses more power than all global data centres com
Iran, Kosovo, China among other nations that have banned crypto mining

The crypto mining industry often finds itself under the scanner for being power-intensive and releasing greenhouse gasses into the environment. In a recent development, the South American nation of Venezuela has announced a ban on crypto mining. The massive load of electricity that is used for the mining several cryptocurrencies left the Venezuelan government concerned, which ultimately resorted to restricting these crypto mining operations all together. AlbertoNews, a Venezuelan publication was first to report on this development over the weekend.

The government of Venezuela has reportedly joined forces with the national electrical system to identify and disconnect crypto mining farms from the power grid in the course of the coming few days. The Venezuelan Ministry of Electrical Energy (MPPPE) has already kick started a power supply control plan to bust crypto mining clusters.

The enforcement of the crypto mining ban happened after the authorities of the South American nation confiscated 2,000 crypto mining firms in Maracay, Aragua state last week. The ministry of electricity there posted a video of these seized machineries on Instagram, informing its 26,500 followers about banning crypto mining due of the mammoth size of its power requirements.

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A post shared by Ministerio Energia Eléctrica (@ministerioenergiaelectrica)

The process of mining cryptocurrencies needs advanced complex mathematical equations to be solved on energy-intensive computers which need to always remain plugged to the electricity. As per a recently published blog by Just Energy, the energy consumption of all crypto assets combined is between 120 and 240 billion kilowatt-hours per year which makes for more than the combined electric usage of all of world's data centres.

As far as Venezuela is concerned, it was already seeing power crunches for years, causing inconvenience to its population of reportedly around 29.12 million.

Some parts of the country have seen massive blackouts since 2009 and the situation took a turn for the worse in 2019, AlbertoNews said. The report also noted that the lack of maintenance and upgrades to the electrical system in Venezuela is the reason behind these blackouts. The situation is nowhere near being resolved in the South American nation which has already seen 219 protests against frequent power outages between January and March this year already.

Reacting to the development, Rafael Lacava, the governor of the Venezuelan state of Carabobo released a public appeal asking people to report crypto mining activities around their locations.

“If you, neighbour, see a house that you know, tell that person to turn off the farm, or else report it, because when they turn off the light, because you have to give light to a man so that he can earn some Reales (money), you are left without electrical service," AkbertoNews quoted Lacava as saying.

In the past, Iran, Kosovo, and China alongside more nations have imposed bans on crypto mining.

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Further reading: Cryptocurrency, Crypto Mining, Venezuela

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More