Economic Crisis | How Bitcoin and Videogames are Helping Citizens in Venezuela

As you may know, Venezuela is living the worst economic crisis of its entire history. The national currency, Bolívar, has lost so much of its value that playing video games for bitcoins is now a viable option to earn a living.

Gold Farming

The practice of gold farming is not new. It first started in the 1990’s when videogamers started to sell virtual items from massive multiplayer online role-playing games (MMORPGs) in exchange for real money, fiat currencies at the time. It first originated in South Korea but it is now practiced all over the world, being extremely popular in China. Employing about 400,000 people, China is the biggest gold farming market with about 80% of the industry based on the country.

According to reports, it seems like the gold farming trend has now spread to Venezuela. Venezuela citizens are playing Runescape, a popular MMORPG, in order to obtain (“farm”) in-game items. Those items are then sold inside the Runescape economy for in-game gold and platforms like Papusgold that exchanges gold for Bitcoins. Seeing as unemployment is at an all-time high and minimum wage is currently $12,50/month, it’s not hard to see why people turn to online gaming as a way of sustenance. Gold farming in Runescape can earn you an average of $0,50 an hour, making it a very attractive hourly rate for many people in the country.

Several projects in the blockchain space are addressing the in-game items’ market by turning said items into tokenized assets on the blockchain. Enjin, Dmarket and even LAToken, are three examples of such projects. They allow users to own their in-game items like they do a real-life object. As crypto and gold farming becomes more popular in regions like Venezuela and others, projects like the aforementioned ones may start seeing a huge uptick in activity.

Venezuela Crisis

The cornerstone of Venezuela’s economy is oil. The Dutch disease, a term defining how overdeveloped economical sectors cause underdevelopment of other economic sectors, was not a tangible problem until oil prices started to drop. Being valued at around $100 a barrel in 2014, oil prices plummeted and were worth $26 at some point last year and now hover around $50. Although being an oil-dependent economy played a part in its demise, government corruption and bad policies also played a major role in the collapse of the economy. Hyperinflation and demonetization policies have pushed the general public to adopt Bitcoins and cryptocurrencies as a way to protect their savings. Allowing family members living abroad to send money to their relatives in Venezuela, bitcoin also allows people to be able to buy basic goods, such as food or medicine, which are unavailable due to a shortage of resources.

It seems like cryptocurrencies continue to help the Venezuelan people survive the socioeconomic crisis. Cryptocurrencies have also proven themselves effective against inflation and demonetisation and, due to it’s virtual and decentralized nature, seem to be a perfect match for the videogame industry. Blockchain and smart contract technologies are great tools for developing transaction systems for video game virtual economies. Although the technologies are still not accepted by the mainstream gaming community, as more and more videogame projects adopt blockchain and ICO crowdfunding, we will start to witness the growth of the crypto gaming space.