Translated material
How to open fees in cryptocurrency
Due to the disconnection of payment systems and the impossibility of international transactions, people have problems with the transfer of funds. Is it possible to use an alternative to collecting alternative during this period? The greenhouse team understood how the digital currency works and how activists can open fees to maintain their activities in it. In more detail about different methods of using crypts for charitable purposes, you can read here .
What is cryptocurrency
Cryptocurrency is a variety of digital currency. It exists in blockchain technology - it is a distributed database that contains information about all transactions conducted by the system participants. And this information is stored in the form of a chain of blocks.
It is important to understand that everything is transparent in the blockchain, all operations are visible. If the cryptocurrency is legalized, then various operations can be carried out openly through it - it will be clear where the donations come from from. The greenhouse wrote more about the openness and anonymity of the crypto and fees in it in this article .
There are several different digital currencies: Bitcoin, Ethereum, Lightcoin. Steiblcoins are considered the most reliable. Their peculiarity is that they are attached to the course of a certain currency and therefore are less volatile. For example, USDT is a cryptocurrency that is most attached to the dollar rate. In addition, cryptocurrencies are distinguished by anonymization technologies. For example, Monero , Zcash or Dash uses unique methods of increased privacy protection.
Why is cryptocurrency used
It is common that cryptocurrency is mainly used to buy illegal goods on the Internet. But in fact, cryptocurrency is spent for other purposes. Someone earns on cryptocurrency, speculating at raising the price: he buys cheaper, but sells more expensive. It is more convenient for someone to transfer abroad using cryptocurrency. And recently, NFT (Non-Fungible tokens, not interchangeable tokens) became popular, in the form of which works of digital art are sold.
Some people prefer to store their savings in cryptocurrency, believing that this is more reliable than a bank account (such funds cannot be “frozen”). But it is worth remembering that cryptocurrency is a very risky tool for investments. It is volatile, which means that its cost can be greatly changed overnight and the opportunity to lose money is great. In addition, now Russians are faced with risks due to sanctions: in the spring of 2022 , restrictions on the amount in the account were introduced, some exchanges block the accounts of Russian customers. And, most likely, sanctions measures will only intensify.
Activists from different countries also accept donations in cryptocurrency. For example, this was done by Nigerian feminists - representatives of the Feminist Coalition movement. The Belarusian BYSOL Solidarity Fund during the protests of 2020 also raised part of the money in cryptocurrency, and then sent money in it to those who needed support. That is how helping from other countries could bypass the blocks of international banking transactions. And the receiving help is to avoid problems due to the close attention of the authorities to the movement of funds in Belarusian accounts.
Sometimes cryptocurrency is used for charity purposes private individuals. For example, they sell their works of digital art, and they send the proceeds to the aid for those in need. This was done by Pussy Riot participants: they sold NFT (“digital cast”) of their single, and the proceeds were sent to a shelter for women in Eastern Europe.
In some countries, cryptocurrency is quite common, but still one cannot talk about its use as a trend. Today, people most often prefer cryptocurrency when other payments are not available.
At the beginning of 2022, the cryptocurrency turned out to be a saving “financial pillow” for people from Russia and Ukraine. Cointelegraph authors have gathered the stories of such people. For example, one of the heroes of the material paid cryptocurrency to the driver who took him from Kharkov to the western part of Ukraine. And the cryptocurrency helped many Russians when moving abroad, when Russian bank cards stopped working there.
Cryptocurrency status in Russia
An individual can own a crypto -core and accept funds on it. In Federal Law No. 259-FZ, a ban is prescribed to accept cryptocurrency in exchange for another provision (goods, services, work). Formally, it remains acceptable to accept cryptocurrency as a donation or gift, since in this case we are talking about cryptocurrency as property.
However, remember: when crediting funds to the account, banks check the funds in accordance with the requirements of the Federal Law “On Combating the legalization (laundering) of income received by criminal means and the financing of terrorism”. For individuals, this can happen if cash to the account or operation with digital financial assets in the amount of more than 600 thousand, for NGOs, any operations, regardless of the amount.
In such cases, the bank may require the provision of documents on the source of the origin of funds. And in the case of cryptocurrency, it is quite difficult to prove that they are not obtained from extremist or terrorist organizations: transactions are anonymous for users. Because of this, the bank can freeze the account of the organization or individual. This can be a key problem for organizing a gathering of donations in the form of cryptocurrency.
This issue may be resolved by the bill on the regulation of cryptocurrencies, which was submitted to the government of the Ministry of Finance in February 2022. The changes planned in it are related to include banks in the system of operations related to the transfer of cryptocurrency. This will identify the parties and the origin of the property.
That is, if the law is adopted, all operations with cryptocurrencies will pass through banks. And they will be:
- identify persons as in standard financial calculations;
- check operations with digital currency in order to identify possible connection with illegal activities;
- control the further movement of funds.
It is also important that the inclusion of banks in this mechanism will lead to the need to pay for their services (commission). This will level the meaning of cryptocurrency, Konstantin Vorobyov is sure. After all, the meaning of using cryptocurrencies is precisely the absence of a financial intermediary, which significantly reduces the cost of the transaction.
How to collect in cryptocurrency
To open a fee, activists can follow such an algorithm.
The first step. Get a crypto -coolant
There are two types of wallets:
- Cold. They are not connected to the Internet and have a physical form - a carrier (usually a flash drive). Because of this, it is more difficult to hack them. Unlike castodial wallets (that is, instituted on the exchange), with a cold wallet you actually have a key to your assets hidden from the whole world and are its only keeper. No one but you has access to him and cannot block it. The disadvantage of such a wallet - it can be lost, it can be taken away. You actually have the key to your assets hidden from the whole world. The disadvantage of such a wallet - it can be lost, it can be taken away. Popular manufacturers of cold wallets - Ledger , Trezor ;
- Hot. They are connected to the Internet and are used for frequent purchases or trading. This is usually an application, not a physical medium. Such a wallet can be opened on the exchange, and it will be responsible for its safety-in this case there are risks of blocking unilaterally, for example, due to sanctions. Or it can be a wallet in a browser or a mobile application. For example, Safepal , Phantom , Solflare , Exodus , Jaxx (it is important to understand that not all of them work with all types of cryptocurrency).
Any crypto-core, except for a casteodial (inquired on the exchange), has a password of 12 random words-SEED-FRAZ. They need to be remembered, recorded on paper and hidden (it is advisable not to store the SEED-Fraz in the phone or computer). Remember: a hot wallet is more vulnerable to hacking.
The second step. Publish the address of your wallet and offer to transfer donates to it
For safety reasons, you can use BTCPAY SERVER . This server is developing a unique link for each donor, by which he can go to transfer money. Thus, anonymity for both sides remains. There will be no address of your wallet in the public domain to track operations with it, although information about these transfers will still remain in the blockchain. True, the installation and setting of this server will require technical skills.
The third step. Bring the raised funds
To do this, you can use exchanges or Internet exchanges.
To withdraw money through the exchange, you will need to start a caste -dedicated wallet on it. In conditions of sanctions and risk of account locks, it is better to use this wallet only for the exchange of funds and not to store large amounts there. In addition, to open a wallet, the exchanges will ask you to provide personal data. If leaks subsequently occur or the exchange will cooperate with the authorities, your operations can be deanonymized.
Among the well -known global exchanges, currently available in Russia and striving for legal work here: Binance (Reuters claims that the cryptocurrency has handed Rosfinmonitoring the data of Russian customers), EXMO . You can use the PEER-2-Peer section-in fact it is a transaction between two individuals through the intermediation of the exchange. It acts as an authorized intermediary and guarantees receiving money and cryptocurrency of each side.
Three stages of such a transaction can be distinguished:
1. You find the seller of cryptocurrencies with the way to transfer money to you, form a warrant and transfer money to the seller.
2. The exchange “freezes” them on the seller’s account until you receive cryptocurrency.
3. The seller transferred cryptocurrency to your account on the exchange account. She “defrosts” the money that the seller receives for the cryptocurrency. As a result, your personal account on the exchange is cryptocurrency.
The sale of cryptocurrency occurs in exactly the same way. Only initially you are looking for a buyer who is ready to buy your cryptocurrency and transfer money to your bank account in a suitable currency.
It turns out that all cryptocurrency transactions are under the control of the exchange in order to insure users from fraud. That is, the exchange is the guarantor of the safety of operations carried out through it. But note that you should not sell and buy more than $ 5,000 on exchanges. The bank can block operations with more amounts and freeze your transfer.
There are also unregulated and “informal” Internet exchanges where you can exchange cryptocurrency for fiat money (rubles, dollars or any other currencies). You can find such exchangers and their ratings on the Bestchange aggregator. This is also a deal between two individuals, but already without intermediation of the exchange. In this case, there is less risk that your wallet will be blocked unilaterally , but even with trusted exchangers should be very careful: there is a danger of meeting a fraudster.
The fourth step. If necessary, spend the cryptocurrency online
With the help of cryptocurrency, you can also make online buying. Not everything is sold in cryptocurrency, but some Internet-Tovars, especially related to IT technologies, are often possible to buy, including for digital money.
An important point: from a legal point of view, you can use cryptocurrency to pay for the services of only a foreign counterparty. In this case, the transaction is complicated by a foreign element and problems with Russian law should not arise. Especially if you register payment with cryptocurrency in the contract, and as an applicable right to establish the right of states with a more favorable regulation in relation to cryptocurrencies.
It is impossible to officially pay cryptocurrency with the Russian counterparty. This will be a violation of Federal Law No. 259-FZ, according to which digital financial assets cannot be used as a fee for goods and services.
Also, cryptocurrency can be used to pay for online services that cannot be paid from Russia, for example, foreign hosting.
If you represent an activist initiative and you have difficulties with setting up the collection in cryptocurrency, write to us.
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