In the later part of Bitcoin's 10th anniversary, many parts of Latin America, especially countries like Venezuela, found new uses for the royal coin. The deteriorating economic landscape combined with bad fiat currencies in the region has forced many users to find new and novel ways to use cryptocurrencies like Bitcoin. Interestingly, Venezuela has not only developed into a center for the use of Bitcoin in the region, but has also shown that it has a significant impact on the introduction of Bitcoin and its utility.
No later than episode Matt Ahlborg, founder of UsefulTulips.org, highlighted Venezuela's growing influence in the region on Bitcoin use and how it was shown during the country's recent blackout in early March 2020. Due to the severe disruption to Internet service in the country, it was evident that the Bitcoin trading activity would cease. However, according to Ahlborg, it was interesting to see that
“The surprising part was that trading in virtually all Latin American currencies also declined significantly during a power outage in Venezuela. And what that meant to me is only at a very basic level that these other countries or these other currencies were somehow connected to the situation in Venezuela. "
Interestingly, the trading volume of local bitcoins in 2020 has seen quite a surge given the increasing global uncertainty, markets in recession and power outages in the country. Ahlborg added that mass migration from Venezuela to various other parts such as Colombia, Peru etc. played a role in such an event. Many of the Bitcoin users in the region are involved in a transfer transaction with Venezuela due to the high demand.
“This is why you saw a massive drop in other transactions in Latin American countries during the Venezuelan blackout. This is because this two-transaction event requires communication with the person in Venezuela who was disconnected at the time.
Venezuela has recently become, for example, poor economic planning and below-average currencies, and has become a test bed for Bitcoin's various value propositions. However, for most Venezuelans, Ahlborg found that Bitcoin is neither a store of value nor a medium of exchange. Many users simply use Bitcoin as the vehicle currency to gain access to the US dollar. He noticed,
“In this situation, Bitcoin is at least largely used as a vehicle currency, and that means people buy Bitcoin just to buy another Fiat currency. So you switch from one fiat currency to another fiat currency, as in this cross-border value transfer process. "