The appalling economic crisis in Venezuela serves as a robust litmus test of peer-to-peer digital currency transfer mechanisms. Ongoing crypto aid efforts must be encouraged to help a “dire humanitarian situation.”
Circumventing Corruption with Cryptocurrencies
On July 11, 2018, Forbes cited a Center for Strategic and International Studies (CSIS) report which highlighted the use of cryptocurrencies in providing aid to downtrodden regions. The report acknowledged the lack of a centralized body in facilitating peer-to-peer transfers, which eliminates the possibility of the misuse of donated funds by corrupt authorities.
In a piece titled, “The Maduro Diet: Food v. Freedom in Venezuela,” author Moises Rendon details the advent, scale, and repercussions of the Venezuelan Crisis. He also confirms reports of people using cryptocurrencies as a means of survival. Rendon notes that while cryptocurrencies are now a proven method of targeting funding, they additionally “undercut” the corrupt Venezuelan government’s ability to “manipulate and control the population.”
The DAG-based cryptocurrency, NANO, made the headlines in July 2018 for its instant, fee-less money transmissions to a Reddit user in Venezuela. However, the case remains highly localized in terms of geography, with only one Reddit user receiving a bulk of donations. As reported by BTCManager, user Windows7753 received enough in NANO donations to purchase necessary sustenance for himself and ten other families in his community.
NANO is not the only cryptocurrency coming to the rescue. Rendon pointed out another instance of cryptocurrencies helping citizens:
“The use of cryptocurrency to safely transfer worldwide donations, following a model like EatBCH, is a novel approach already creating a positive impact for Venezuelans on the ground today.”
Controversial Bitcoin Cash Helps During Crisis
Bitcoin Cash (BCH) has received flak by members of the online cryptocurrency community since it hard forked from Bitcoin in September 2017. However, many critics in the tough community backed off a little upon learning of the use of BCH in aiding humanitarian efforts. Formed in May 2018, EatBCH is a Twitter account featuring a BCH address and a short description of its aim to help crisis stricken Venezuelans. The account features several photos of children and adults benefiting from BCH donations with regards to food supplies.
Unfortunately, groceries are reportedly a weaponized mechanism of Nicolas Maduro, the President of Venezuela. Supporters of his political party are rewarded with food, while the opposition is deprived. The rampant food shortage, as detailed in BTCManager’s coverage on the issue, forces Venezuelans to remain dependent on a state-owned food aid program and makes them vulnerable to political manipulation.
Since the relative success of the EatBCH program, another account has been set up for Sudan, another region in the throes of conflict and hardship.