Eduardo Gómez: An on the Ground Perspective from Venezuela

Eduardo Gómez is the head of support at Purse.io, a native Venezuelan who has been working to expand adoption and awareness of Bitcoin throughout his country. In this conversation, Gómez and Anthony Pompliano discuss the current political issues in Venezuela, the hyper inflation of the bolívar, the creation of the petrodollar, the rapid adoption of Bitcoin, and he explains what's actually going on in his come country. ----- Join the Off the Chain newsletter. Pomp's daily email analyzes the crypto market for institutional investors. Simply, it’s the best crypto newsletter delivered to your inbox every morning. No frills. No bullsh*t. Just everything you need to know in a 3-minute read. https://offthechain.substack.com/ ----- BlockFi BlockFi allows you to keep your crypto, put it up as collateral, and receive a USD loan funded directly to your bank account. They do loans ranging from $2,000 to $10,000,000, and they're perfect for helping you reach your financial goals of all sizes. Visit BlockFi.com/Pomp to learn more about putting your crypto to work without having to sell it. ----- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe. This podcast is presented by BlockWorks Group. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworksgroup.io

• 0:01Speaker 00

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off the Chain, simply the best podcast in crypto. Let's kick this thing off.

• 0:13Speaker 00

  Eduardo Gomez is the head of support at Persio and a native Venezuelan who has been working to expand adoption and awareness of Bitcoin throughout his country. In this conversation, we discuss the current political issues in Venezuela, the hyperinflation of the Bolivar, the creation of the Petrodollar, the rapid adoption of Bitcoin, and he explains what the hell is actually going on in his home country. This conversation was absolutely fascinating, and I hope you enjoy it nearly as much as I did. Before we get started, I want to talk about one of our sponsors, BlockFi. These guys are doing really interesting work in crypto lending. What they allow you to do is keep your crypto, put it up as collateral, and receive a US dollar loan funded directly to your bank account.

• 0:55Speaker 00

  They do loans ranging from $2,000 to $10 million, and they're perfect for helping you reach your financial goals of all sizes. You should visit blockfi.com/pomp. Again, that's blockfi.com/pomp. Again, one more time, type it in, blockfi.com/pomp, if you'd like to learn more about putting your crypto to work without having to sell it. Definitely do it. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 1:43Speaker 00

  All right, guys, I'm super excited to bring you this special episode. I have Eduardo calling in. Eduardo, thank you so much for taking the time to help us better understand the situation that's going on in Venezuela.

• 1:57Speaker 01

  It's my pleasure, Anthony. I'm so glad to be here with you. And shout out to your listeners.

• 2:05Speaker 00

  Yeah, shout out to the listeners. All right, so just so people have context, maybe give us a little bit of background on yourself, you know, as much as you feel comfortable doing. And where you live, and kind of just your day to day, so that we have better understanding.

• 2:22Speaker 01

  Okay, yeah, well, for those who don't know me, my name is Eduardo Gomez. I'm the head of the support department at San Francisco Bitcoin startup purse.io.

• 2:35Speaker 01

  I joined Bitcoin space, I mean, I first learned about Bitcoin back in 2012. But it wasn't until 2015, 2016 that I started actually working full time in the space. Did all sorts of jobs from freelancing content creation, blog news writer for several websites, news website related to Bitcoin. And in 2016, at the end of 2016, I joined Purse as a customer support agent. And I'm now a customer support agent there. I'm Venezuelan. I was born in Venezuela.

• 3:18Speaker 01

  I left there and I came to Argentina four months ago. Where I had been living here, I spent over three months living on bank, fully living in Bitcoin and exchanging Bitcoin into fiat, specifically cash. So that pretty much sums up my background with Bitcoin.

• 3:40Speaker 00

  Okay, so four months ago, you moved from Venezuela to Argentina, and you've been living for quite a while exclusively on Bitcoin, correct?

• 3:49Speaker 01

  Yes, yes. When I was living in Venezuela, my main...

• 3:55Speaker 01

  My main source of income has been from Bitcoin. I was getting paid by this news website in Bitcoin back in 2016. And when I was living in Venezuela, I was getting paid with Bitcoin and then exchanging those Bitcoins into fiat approximately on a weekly basis due to hyperinflation. Inflation was so high that it only made sense if you were to exchange money frequently because otherwise, if you were to exchange money on a monthly basis, you were to lose a lot of money because inflation was going to eat through your savings.

• 4:37Speaker 00

  Yep, and walk us through, what is the process? Like, so as you were getting paid in Bitcoin and you would go weekly to exchange that Bitcoin for fiat, what was that process like? What were the challenges that you faced in doing that or was it pretty easy?

• 4:53Speaker 01

  To be honest, I believe and I still think that it's easier to buy and to use Bitcoin in Venezuela than in the US. The reason being that back in 2016 and 2015, 2016, there was this Bitcoin exchange called SirBitcoin. It was a very good exchange that allowed you to purchase and sell Bitcoin and they actually had nearly instant fiat withdrawals. So coming in as a guy who was getting paid in Bitcoin, I was using SirBitcoin to exchange my Bitcoin to fiat every week.

• 5:36Speaker 01

  And when you sell Bitcoin, when you sell Bitcoin through SirBitcoin, you could get the fiat, you could get your money into your bank account in less than 10 minutes. So you tell me of any Bitcoin exchange in Europe or in the US where you can get fiat in less than 10 minutes after selling your Bitcoin. There isn't such an exchange. But sadly, I was using that exchange, I had no problems using it. But sadly, in 2017, at the beginning of 2017, the Venezuelan government...

• 6:13Speaker 01

  And crap, uh, you know, they, they, um, they went after, after Sir Bitcoin. They, they actually jailed one of the operations guy there. He was the first person to be arrested, uh, that, uh, related to Bitcoin, you know? He was the, he was the first person to be arrested, uh, on charges of, you know, using Bitcoin. And since the government, the Venezuelan government imposed a currency control mechanism, uh, back in 2004, uh, citizens have not been able to purchase dollars or foreign currency. So they saw Sir Bitcoin and Bitcoin as a threat because it allowed people to get access

• 6:58Speaker 01

  to foreign currency because you could buy Bitcoin and then sell it for any other currency that you would like or even store it on, on, on, or keep it in Bitcoin. So the government saw that as a challenge, as a threat, and they shut down Sir Bitcoin. But then they realized, the high-ranking government officials, they realized that they could profit from Bitcoin because, you know, you, you have the Bitcoin mining machines. You get the ASICs and they started, they actually went after Bitcoin miners afterwards. They started shutting down mines and then, instead of, you know, confiscating the equipment and, and, and storing them and storing it away in like evidence rooms, they used the

• 7:39Speaker 01

  mining equipment to mine themselves, the, uh, these, uh, high-ranking government officials. So throughout 2017, um, 2018, uh, the Venezuelan government, um, not, not, not as like an official, uh, policy, you know, but more as a, uh, more as, uh, as, um, high-ranking government officials taking, um...

• 8:07Speaker 01

  Or moving their influences with the police and intelligence agencies to shut down miners and then concocting the steal of that equipment to mine themselves. So that pretty much sums up what has been going on with Bitcoin in Venezuela, with cryptocurrencies. The government then started banning people from importing ASICs and Bitcoin miners. And then they even went a step further and they stopped people from importing computer parts. So if you wanted to buy like a GPU, not even for mining, you know, even if you wanted

• 8:49Speaker 01

  to buy a GPU because you're a gamer or whatever, they prohibited shipping companies from importing GPUs and anything that could be used to mine a cryptocurrency.

• 9:01Speaker 00

  Wow. So literally they just said, we're not even going to risk it. They're just not going to allow you to bring any computing power into the country.

• 9:12Speaker 01

  Exactly. And when some people decided to import their equipment, the Venezuelan government actually stole the equipment from the customs agencies, you know, the D-pots and storage units where these companies kept their merchandise. So whenever some people decided, you know, I want to buy a GPU. And during this period of time where the government banned import of that equipment, they pretty much stole everything that was sent down in D-pots and hangars and deposit units from these shipping companies.

• 9:55Speaker 00

  And then what, did they allow people to buy it back from them, from the government? Or the government kept it in there mining themselves?

• 10:03Speaker 01

  Well, the model of the typical model of these crooks was that.

• 10:12Speaker 01

  In 2017, it was more of like the head of the local police stations, or the head of the local, you know, there is this NSA equivalent. What we have in Venezuela, it's an agency called SEBIN. It's something like the NSA in the US. It's a civilian intelligence agency. And these guys, at least the head of some local headquarters spread throughout the country, they made unilateral unilateral operations to steal and seize miners from people.

• 10:53Speaker 01

  In some cases, you know, I've heard reports of people getting blackmailed. You know, hey, if you don't want to go to jail, you have to give us a percentage of your earnings, or you have to give us some equipment, or you need to give us some money. In some cases, they stole the equipment and then they sold it back to the owners for a percentage. It was crazy. Even after the government, you know, the government back in 2018, they said, you know, cryptocurrencies are perfectly legal. You can use cryptocurrencies here in Venezuela. We encourage people from mining, from setting miners.

• 11:38Speaker 01

  But then they established this centralized database where you had to register and you had to say, you had to say where you live, what was your mining power capacity, how many hashes and which cryptocurrencies were you mining? And you had to hand out all that information. I think less than 10% of actual Bitcoin miners, cryptocurrency miners, decided to register in that database. Also, when things were getting hard for people to import ASICS...

• 12:14Speaker 01

  You know, the government first cramp it down on ASICs because they were the most distinguishable piece of hardware equipment related to cryptocurrencies. And then when people started, you know, realizing it's so hard to bring ASICs to the country, people started to importing GPUs to mine things like Ethereum or C-Cash. A lot of people, I mean, the first batch of miners, they bought GPUs that had video memory of two gigabytes, two gigabytes of video memory. And then when Ethereum, the Ethereum DAC size or blockchain size increased, it was no longer, those GPUs were no longer able to mine Ethereum.

• 12:57Speaker 01

  So those miners, they switched to C-Cash, which was a nice alternative. And then the government then started cramping down on GPUs too, and they banned people from importing computer parts.

• 13:09Speaker 00

  Got it. And then talk to me about the Petro, right? And kind of what the Venezuelan people, what do they understand about that? How are they interacting with it? Is something that they fear? Are they excited about it? What's the general sense?

• 13:29Speaker 01

  So something that you need to understand before, something you personally need to understand is that the government, the Venezuelan government, is an expert on creating diversions. You know, whenever the economy is bad, things are worsening, the government always comes up with a new scheme, you know, with something new to keep people distracted. They've, you know, they claim that their hardship, the economic hardships that the Venezuelan people are enduring are caused by the United States in what they call an economic war. So. Since the US cannot allow such a government to exist on his hemisphere,

• 14:12Speaker 01

  the US started sanctioning specific high-ranking government officials. Despite what some people think, the US has not sanctioned the whole Venezuelan economy. What they did is that they sanctioned individuals within the Venezuelan government. They started sanctioning, they prohibited banks and other institutions from issuing bonds, instruments to the Venezuelan government. So, the Venezuelan government, strapped for cash, they decided to come up with this scheme of El Petro. El Petro is basically what my friend Alejandro Machado

• 14:54Speaker 01

  from Open Monetary Initiative calls "an initial country offering." He says that El Petro is an initial country offering because the Venezuelan government with El Petro, what they're trying to accomplish is to monetize the oil reserves. Venezuela is a country with the largest oil reserves in the world, but it's extra-heavy oil, it's oil that is very hard to extract. It's costly to extract. And no one wants to invest in Venezuela because they know that the government is corrupt. So, since it's very hard to obtain that oil and other minerals

• 15:36Speaker 01

  because Venezuela also has gold, coltan, diamonds, and all sorts of natural resources, the government knows that it's hard to extract those, no one wants to invest, so they came up with this Petro thing. A token that will represent, each token will represent a barrel of oil. They tried to market this, they tried to sell it to international investors. Funny thing is that they came up with this idea of El Petro. They encourage the local population, the Venezuelan population, encourage them to buy this petro. But then you cannot buy petro with our own currency, the Venezuelan bolivar, because they are not interested in people handing out bolivars

• 16:19Speaker 01

  and extending it for petros, because the government controls the monetary supply. The Venezuelan Central Bank has no independence from the government. There is no separation of institution. And since the government can always print new money to pay people, they do not want you to give them bolivars in exchange of petro. They were trying to sell their petro to international investors in China, in Russia, in Saudi Arabia, but no one wanted to buy petro. China refused to pay for oil with petro. Russia refused to pay for things with petro. No one wanted petro.

• 17:03Speaker 01

  So this talking became something, is mostly a joke. The Venezuelan population started hearing about El Petro. The government shielded cryptocurrency, this cryptocurrency, which is not real cryptocurrency, because there is no real blockchain, there is no real code. It's just a website that you go to with, that has fake, a fake Block Explorer. It's something that, it's very reminiscent of OneCoin. For those listeners of your show that have been sticking long here, some people may recall OneCoin, which was a cryptocurrency, supposedly a cryptocurrency. But in reality, it was just a centralized database with a fake Block Explorer.

• 17:49Speaker 01

  And El Petro is pretty much like that. It's a fake cryptocurrency that the government tried to shield, and they tried to monetize oil reserves that are sitting deep down below in the ground that they know they cannot easily extract, and no one wanted to buy it. So they bombarded the Venezuelan population with marketing, and they talk about the petro constantly on public television. And mind, all television in Venezuela is controlled by the government.

• 18:22Speaker 01

  They started shilling this fake cryptocurrency for people to buy. And there was this office in the capital where you could go to and buy Petro and you had to pay for it with dollar in cash. And this office was pretty much empty all the time because no one wanted to buy it. So El Petro is pretty much a failure. The government has faded into obscurity as of lately. And the government realized it was a failure. And the person who was actually in charge of the government institution that was overseeing the development of Petro was replaced by someone else.

• 19:07Speaker 01

  And this one, someone else, I can't remember his name right now, but this guy tried, he held the first big blockchain conference in Venezuela, official blockchain conference organized by the government. And they invited all these guys, all these scammers from all over the world and foreigners, you know, Spaniards, some Spaniards came there and they made it look as if El Petro was going to skyrocket and it was going to increase in value, when in reality, the government is actually using Petro as a way to devalue the currency because they have pegged the boulevard to El Petro, right?

• 19:50Speaker 01

  And salaries are pegged to El Petro in the sense that if a Petro is worth a barrel of oil, the government has said that the minimum wage was going to be half a Petro. And half a Petro, if oil right now is sitting at fifty dollar per barrel of oil, so a minimum salary will be equivalent to twenty-five dollars. But in reality, Petro trades for less than that and the minimum wage is actually less than six dollar per month. Can you imagine it? Eighty-seven percent of, at least more than eighty percent of the population earns minimum wage in Venezuela

• 20:31Speaker 01

  and the minimum wage is less than five, six dollar per month of work. And a kilogram of meat costs like ten dollars. So people are pretty much starving and the minimum wage is worth jack shit, you know?

• 20:46Speaker 00

  All right, before we continue with this conversation, I want to mention our sponsor again, BlockFi. Remember, they do crypto lending. So you posted your crypto as collateral, they give you a US dollar loan, and you can use the US dollars to do whatever you want. You should visit blockfi.com/pomp and then tweet at me that you went. If you tweet at me after you went to blockfi.com/pomp, maybe I'll throw you a like, a smiley face, or the fire emoji. The fire emoji is the best. Remember, go to blockfi.com/pomp and I'll see you on Twitter. What, um, but let's talk about what's going on right now with Bitcoin in Venezuela. How do people on the ground interact with it? Is it being used a lot? Is it non-existent?

• 21:29Speaker 01

  It has increased significantly. It's not like people are transacting between each other with Bitcoin. It's mostly about Bitcoin, it's mostly about people using specifically

• 21:46Speaker 01

  local Bitcoin, which is the only functional Bitcoin exchange in Venezuela.

• 21:51Speaker 01

  People are using local Bitcoin for things like buying it and to, and they also use local Bitcoin as a payment processor. Because, you know, bank accounts in Venezuela, personal bank accounts have very low daily transaction limits. So if you want to send money to someone, the maximum amount that you can send to a personal bank account in Venezuela is about $96 per day. That's the cap, that's the limit. If you want to send more money than that, you need to have a corporate bank account. So what people are doing is that they are using local Bitcoin to make payments to, you know, companies are using local Bitcoin

• 22:36Speaker 01

  to pay suppliers.

• 22:39Speaker 01

  To do business-to-business transactions. And the general population is also using, specifically people outside Venezuela, immigrants, you know, people that left Venezuela. They're living in Argentina. They're living in Colombia. They're living in Ecuador, in Peru. And they're using local Bitcoin to send money to their family members back in Venezuela. The government has realized that their remittance business is another possible revenue source. I don't know if you guys are aware of this, but one of the main revenue sources of the Cuban regime, of the Cuban dictatorship, is the remittances that people send from Florida, from Miami, back into Cuba.

• 23:22Speaker 01

  Since there are no private banks in Cuba, it is the Cuban government that sets the exchange rate. So they control the remittance business. If you want to send money to your relatives in Cuba, you send money to the government and, you know, the government makes, is the one who sends the actual payment to your family members. They control the exchange rate and they take a huge cut. The Venezuelan government has realized, since there are 4 million Venezuelans living outside the country, if you go here, if you go in Argentina, if you go to any establishment, if you go to any restaurant, there is a Venezuelan working there. So all those Venezuelans are working hard outside Venezuela to send money to their relatives. And if you want to send money to Venezuela,

• 24:06Speaker 01

  it's becoming increasingly harder. The government has sent guidelines to private banks and public banks in Venezuela, prohibiting you, prohibiting people outside Venezuela from logging into their bank account. If you're accessing from outside Venezuela, you cannot log into your bank account. I recently experienced the same problem. I'm living in Argentina. I'm no longer able to access to my bank account in Venezuela with my Argentinian IP address on my computer. And since the internet infrastructure is so bad in Venezuela, there are no VPN providers in Venezuela.

• 24:49Speaker 01

  So a good chunk of the immigrated people Have to resort to intermediaries and a good chunk of them are actually using LocalBitcoin. It's what I'm using right now to send money to my family relatives in Venezuela. If I need to send money, I open up localbitcoin.com. I search for a trader because LocalBitcoin is a peer-to-peer trading platform. I find out a trader that has the same bank account that my family relatives have and I initiate a trade with him. I specify the Bitcoin amount and then he makes a Bitcoin transaction, he makes a fee a transaction to my relatives. I call my relative, I ask, "Hey, have you received the money right now?"

• 25:31Speaker 01

  And if he says, if they say yes, then I release the escrow and I give the, I give the Bitcoin to my family, I'm sorry, I give the Bitcoin to my counterparty. We're also seeing at the company Workforce, we're seeing a lot of Venezuelans using Bitcoin to pay for things on Amazon. They use our service to buy stuff from Amazon by paying with Bitcoin. They get a 15% discount and they use that to import goods. Back in, back in 2016, 2017, before the government banned people from importing GPUs, a lot of Venezuelans

• 26:12Speaker 01

  were using our service, Purse, to import GPUs into the country, to import mining equipment. So there is this huge surge in activity. Right now, to talk a specific numbers, a specific stats, in the last weeks, in the last couple of weeks, at least 1,900 Bitcoin have been trading on LocalBitcoin. Each week, more than 1,000 Bitcoin gets traded on LocalBitcoin compared to merely 300, 400, 500 Bitcoin from last year throughout the whole bear market. The Bitcoin trading volume on LocalBitcoin has surged dramatically.

• 26:57Speaker 01

  A few weeks ago, the LocalBitcoin broke the record, the all-time high in volume.

• 27:08Speaker 01

  To 1900 Bitcoin in a single week. We're talking that more than 6 million dollars, more than 7 million dollars get traded on local Bitcoin each day. One of the main factors for this is the currency control mechanism that Venezuela has. So the local population cannot legally purchase dollars. You have to go to the black market. You have to search for people. Venezuela is pretty much running on WhatsApp, on Facebook and Instagram. Because, you know, Venezuelans use WhatsApp a lot to communicate securely between each other. And there are big WhatsApp groups where you can find people selling whatever stuff.

• 27:49Speaker 01

  You know, there are WhatsApp and Facebook groups of people selling goods, foods, basic necessity goods, selling dollars. And a lot of people have started realizing that local Bitcoin is a safer approach to buying dollars because there is an escrow system. And I'm not saying this because I'm getting paid by local Bitcoin or anything. I'm not getting paid by local Bitcoin. I'm merely a user of the platform. I've been using the platform since 2015. I'm just saying it is the only Bitcoin exchange that works in Venezuela. All other Bitcoin exchanges have been shut down by the government.

• 28:31Speaker 01

  The government, through third-party proxies and through businessmen that are in bed together with the government, they tried to set up some exchanges that are regulated by the government, but those don't work. They don't actually work in Venezuela. So people have to use local Bitcoin. Trading volume is up. More people are using it. It's a safer way to... It's much more safer than buying dollars on the streets. And since you have people in an account, since you have money in an account, people can't... People cannot physically sell it from you.

• 29:13Speaker 01

  Another interesting use case is of people... People have companies in Venezuela. They have a hard time to import stuff, you know, to buy supplies and stuff for the companies. What they do is that they use local bitcoin to purchase bitcoin. They send bitcoin to their bank account, sorry, they send their bitcoin to a bitcoin, a bitcoin exchange, another bitcoin exchange. And they exchange it, they exchange that bitcoin into fiat, into dollars in their American, in the US bank accounts. And they use the dollars to buy stock, to buy supplies, to buy merchandise.

• 29:56Speaker 01

  And then they pour that back into the country.

• 29:59Speaker 00

  And so what's the current situation right now, right? There's obviously incredible dissent, if you will, on the political front, where you've got one party and one leader in, you know, kind of the incumbent saying that they're the president, they're sure going to stay the president. Then you've got a new kind of interim president that many around the world are recognizing as the actual president of the country. What can you tell me about that?

• 30:31Speaker 01

  Okay. So to simplify things, what happened was that in 2017, in 2018, last year, there was a presidential election in Venezuela, where Maduro was official, the official political party candidate. And then all the competitors were pretty much fake. They were paid by the government to go to election because the political opposition, the true political opposition did not present a contender to those elections. Additionally, it should be noted that elections in Venezuela are held with electronic voting machines, okay?

• 31:16Speaker 01

  These voting machines have been used ever since 2006.

• 31:23Speaker 01

  These machines are manufactured by a company called Smartmatic. So in 2018, after the election ended, Smartmatic, the same company that fabricates and manufactures the voting machines, they evacuated the managerial staff of the company in Venezuela. And from the UK, they held a press conference and they said, "Hey, we cannot guarantee the transparency of the presidential election. At least 1 million votes were illegally added." I'm talking about the same company that manufactures the voting machines.

• 32:08Speaker 01

  The company said, "We cannot guarantee the transparency of these elections." So not only this election, but the previous one. And they said that. So the whole international community, well, not the whole, but at least the European Union and the US.

• 32:34Speaker 01

  They're not going to recognize this election. This election was rigged because the same company fabricating the voting machines says that there were inconsistencies. So fast forward to January 10. January 10 was the day when the person that got elected in that presidential election in 2018 was supposed to swear an oath and take charge of the presidency. But since there is a vacuum of power because the opposition, the political opposition and the international community says that last year's election was fake, it was a scam, essentially, if you think about it on legal terms, there is a vacuum of power.

• 33:18Speaker 01

  There is no real president in Venezuela. So the National Assembly, the Congress of Venezuela, which was democratically elected in 2015, and which is controlled by the opposition, the political opposition controls the Congress.

• 33:39Speaker 01

  A congress which was systematically shut down by the government. The government removed all budgets and removed everything. They stripped away the congress because it was controlled by the opposition. So legally speaking, as per Article 233 of our national constitution, the president of the National Assembly had to take charge of the country. And that's what happened. The president of the National Assembly, the congress of Venezuela, controlled by the opposition, had to take control of the presidency because there was a vacuum of power.

• 34:19Speaker 01

  So unlike what some media, international media is saying out there, there was no self-proclamation, there was no coup. There was no coup. It was just the political opposition activating Article 233 of the national constitution and electing and proclaiming the head of the congress as interim president of Venezuela. What's going to happen now is that the military, the high-ranking military officers, which are in bed together with the government, the, or military run drugs. You know, Venezuela is a narcostate, it's a failed state. Their own military run drugs.

• 35:04Speaker 01

  Their own military is in charge of illegal mining activity in gold-rich states in Venezuela. The same military supports up an unofficial paramilitary arm of people called colectivos. Colectivos are people that have been funded by the government. They have guns and they support the government. And whenever there is a protest, the first guy, the first people to show up are these paramilitary guys who threaten people and who shoot people. They're the ones who commit, who commit murders in protest and they are government-backed.

• 35:48Speaker 01

  So the international community has supported the political opposition in Venezuela to take control of the country. There's going to be, in the near future, there's going to be two parallel states. One, the legal government, which is the political opposition.

• 36:08Speaker 01

  And the Maduro's regime, Maduro's narcostate. Since the high-ranking military officers are still supporting Maduro, things are going to complicate further in the coming weeks. The political opposition, the legally, the head of the National Assembly or legal interim president has said that they're going, they have created a bill, a legal, a congress bill, to give amnesty and immunity to those high-ranking government officials who decide to stay together with the people and to overthrow Maduro.

• 36:53Speaker 01

  They're trying to guarantee the, they're trying to guarantee the immunity and, and safety of all those military officers who side with democracy and who side with the people in overthrowing Maduro. However, despite that, you know, the, the democracy is extending that offer to high-ranking government officials and military personnel, they are still with the government, at least the high-ranking officers, because the middle tiers and the middle hierarchy of the military, they are suffering the same,

• 37:36Speaker 01

  they're struggling the same as the general population. They earn low wages, they're earning less than $10 per month. And things are very expensive in Venezuela. There are things that are more expensive in Venezuela than in the US. I was comparing prices the other day of dog cable, dog food, and it's much more, it's 50% more expensive to buy dog food in Venezuela than here in Argentina. It's, it's, it's crazy. Food is expense, is more expensive in Venezuela than in Argentina. So the middle, the middle ranks, the middle ranks in the military, they're suffering the same as the general population.

• 38:18Speaker 01

  So what is going to happen in the coming weeks is that the US alongside the international community are going to put clear

• 38:31Speaker 01

  Timeframes for the military to decide to side with the democracy. When the high-ranking government officials realize that they have nowhere to go, that there is going to be a clear timeframe for them to cross and have immunity. When they realize that the time is expiring, they will probably overthrow Maduro. Maduro is pretty much a situation. Right now Maduro is a hostage because he is being held hostage by the high-ranking government military. Because the military knows they have to stick with Maduro because that's the only way they can profit them.

• 39:16Speaker 01

  They can keep profiting from illegal mining, from running drugs. But they also know that if Maduro falls, they are going to fall too. So they're making Maduro not to negotiate with the US government and with democracy in Venezuela to avoid having their revenue sources cut short.

• 39:44Speaker 00

  What do you think the future of Venezuela and Bitcoin is? As all of this is going on, obviously, I think people in the United States use Venezuela as an example all of the time, an area where the digital decentralized currency has started to gain adoption. But what's your view as to what's going to play out here over the next, you know, it's called two to three years?

• 40:09Speaker 01

  Well, in the next two or three years, I think the future of Bitcoin in Venezuela is tied with the political situation. If the political situation continues to worsen and to be as it is right now, we will continue to see increasingly more volume activity and trading activity in Venezuela. Because people will continue to use Bitcoin to circumvent government controls, to circumvent banking restrictions. They will continue to use platforms like local Bitcoin. So I think in the short term, middle and in the midterm, short term, midterm.

• 40:53Speaker 01

  Bitcoin transactional volume will continue to increase. Long term, if we are able to restore democracy in Venezuela, I think Venezuela will become a central hub for cryptocurrency

• 41:09Speaker 01

  in Latin America, because there's going to be so many startups coming to the country, so many people wanting to create new things in Venezuela. So I'm hopeful for the future of cryptocurrency in Venezuela if we're able to restore democracy, even if that democracy removes the currency control mechanism. And even if Bitcoin transactional volume goes down, because there will be eventually no need to use Bitcoin to circumvent a state. If there is a democracy, they will likely remove this currency control mechanism immediately.

• 41:52Speaker 01

  Even if the transactional volume goes down, I will be very happy. And I think we will see a lot of investment. We will see a lot of innovation coming from startups. So I think the future is very exciting for cryptocurrencies in Venezuela. The economy in Venezuela has shrunk dramatically. The GDP per capita was something like $11,000 20, 10, 20 years ago. It's now sitting at $3,300. It's more than a 50% decrease in GDP.

• 42:34Speaker 01

  The whole economy has shrunk by more than 70%. And Venezuela has a huge natural resources. It has huge natural reserves, lots of biodiversity, lots of beautiful places to go, a lot of potential for tourism. So if we restore, if we manage to restore democracy, there's going to be a boom in investment if the democracy is able to open up the country. For foreign investment, I think we will see a boon again and Venezuela will become the prime place to invest in Latin America. Venezuela is located at a strategic position.

• 43:17Speaker 01

  Venezuela is one of the best strategically positioned countries because it has access to Europe, it has access to South America, it has access to the US via maritime shipping routes, via aerial routes. So it's a, it is a very good country to invest if, if democracy can be restored.

• 43:40Speaker 00

  For sure. What, um, what's the one thing that you hope everyone listening to this knows, kind of coming out of the, uh, the podcast in terms of Bitcoin Venezuela in the future?

• 43:52Speaker 01

  Yes, well, I, it is important for, for your listeners to understand that first, there was no coup in Venezuela, it was just the democracy elected institution of the Congress electing a president in the, in, in this scenario where there's a vacuum of power. Second thing that you need to understand is that the country is, has been undergoing since 2004 in a currency control mechanism that prohibits people from accessing foreign currency. The regular Venezuelan cannot buy dollar. They have to go through a black market. So they have resorted to options like Bitcoin and cryptocurrencies.

• 44:36Speaker 01

  And the future isn't certain, but I think there's a good chance that democracy can be restored in Venezuela. And if, if, um, if you're able to support our efforts to restore democracy, please give a retweet on Twitter, on social media. Let people from Venezuela speak to through of what's happening in the country and support all initiatives that are, are being undertaken to restore democracy in Venezuela.

• 45:11Speaker 00

  Absolutely. Man, listen, thank you so much for coming on and talking about this. I think that you've really been able to share information that most people don't have, and frankly, they need to be educated on. So I really appreciate you doing this, and maybe we can do it again in a couple of weeks or something.

• 45:30Speaker 01

  Yeah, thank you so much. I want to do a shout out to, you know, things like Local Bitcoin, which enables Venezuelans to trade, freely trade, and is pretty much censorship resistant because it's peer-to-peer, even though it can be blocked by the government. The government has not done so because a lot of, actually, a lot of government officials use Local Bitcoin. Shout out also to Local Ethereum, which is a more decentralized platform than Local Bitcoin, and it runs on a smart account. It allows you to trade Ethereum

• 46:11Speaker 01

  for fiat in a decentralized, secure way. Shout out also to, you know, cryptocurrencies like C Cash that enable privacy payments. And please, whatever you can do to retweet and spread the word, what's happening in my country, please do so. Thank you so much, Anthony, for having me on this podcast, and I hope all your listeners enjoy this interview and have a good day.

• 46:40Speaker 00

  I love it, man. You're the only person who's ever gotten shout outs in on the podcast, so I appreciate it, and we'll talk soon.

• 46:49Speaker 01

  Absolutely.

• 46:51Speaker 00

  All right, you reached the end of the podcast. Congratulations. I appreciate you listening all the way to the end. You deserve a trophy. But before I hand out the virtual trophies, remember to go visit blockFi.com/pomp. They're the crypto lending leader in the US. They do it in 45 states, interest rates as low as 8%, and you can use the US dollar funded directly to your bank account to do whatever you want. You should definitely go visit blockFi.com/pomp. You know you want to do it, so just do it. BlockFi.com/pomp.

• 47:22Speaker 00

  Hey everyone, Pop here. If you liked this episode of Off the Chain and want to help us take crypto to the top of the Apple, Spotify, and other podcast charts, please do us a favor and rate, review, and subscribe. To review, simply go to the Off the Chain homepage, scroll down until you see the five blank stars. Taking 15 seconds to fill those stars in and leave a quick review goes a long way in helping us take the entire crypto ecosystem to the top of the charts. I appreciate you listening and see you next time on Off the Chain.