I really don't understand what I'm missing here: How the fuck are cryptos useful to Russian or Ukranian people right now? I mean, they can't buy stuff with it (you know, like food), and if you exchange it to Ruble, why not start with Ruble in the first place?
I know that Ruble will be in a free fall, but cryptos are not stable either. So it's like buying Ruble, but with extra steps.
There are basically two outcomes for someone involved in a war. Either their world will end, or they will have to live after the war. Which is a roundabout way of saying that on an individual level the economic calculations aren't that different from usual. They still need to plan on living a life after the current conflict, and will need to preserve their savings despite a rather predatory government looking for logs to throw into the fire of war.
What ordinary people desperately need is assets they can hide from their government to preserve some wealth. However, because it is 2022, they also have the option of assets that literally nobody can take off them. It'd be worth a shot, maybe the legal situation will be different in 5-10 years and if they invest in a crypto they'll be able to trade it for something.
I like their odds in literally anything more than odds in the Russian rouble. So crypto would make sense.
> However, because it is 2022, they also have the option of assets that literally nobody can take off them.
Don’t oversell it: this is a government with advanced internet monitoring capabilities and little concern about civil liberties. Make one opsec mistake or transact with someone who does, show unexplained money, etc. and then it’s “turn over the key if you want to see your children out of prison”. Blockchains are exceptionally risky here because they require a lot of visible network activity and leave a full history of your activity for the authorities.
There is a high cost for the Russian government to do that - they have to organise some thugs, analyse the blockchain, set up back channels to on-sell the crypto, etc, etc. With the ruble they print more. Maybe update some numbers in a database. Very low cost. The harder it is to execute, the more likely it is for families to preserve some wealth.
And they can skim off the top of all Russians at once. Even bitcoin is a pretty uncontestable step up - fiat currencies are bad for storing wealth at the best of times but this is really not the best of times. This is the time to flee a sinking ship.
> assets they can hide from their government to preserve some wealth
I doubt that a government who pioneered cyberwarfare will be unable to locate your bitcoins; and once you do that, to acquire them they only need some goon with a monkeywrench - of which, I'm sure, there is no scarcity in Russia right now.
I expect it's easy to send funds via crypto to and from there and regardless of sanctions from the west. It's unlikely to be the only solution even after swift and other bans but it's an easyish extra option, especially for those already familiar with the ecosystem.
Ok, let's say it is easier and cheaper to send funds via crypto (which I'd argue is not generally the case). I'm a Russian in Russia and somebody sent me some Bitcoin. What do I do next to use this money?
Localbitcoin/local crypto/localmonero and similar (e.g. asking at a crypto meetup forum) are an option if bank transfers don't work. Bitcoin ATMs if you really are in a hurry and willing to take a potentially high exchange rate hit.
Otherwise there's exchanges which still operate within Russia for the time being and some business (tho too rare to be useful but In a big city, if you don't have funds others than what was sent to you, you might be able to buy more than otherwise) accept it though I wouldn't rely on that too much unless you know a specific one.
However, not everyone can receive or send rubles as easily to/from the west especially after the SWIFT and related bans. Either way, it doesn't hurt to have the extra option.
I've been seeing them occasionally in big cities since 2014-15 though again it's never worth it at least for me - the exchange rate is typically pretty bad and I'd rather wait but go through a low fee/feeless option.
Nearest is in Kiel, just short of 600 km away. If I drive to it it will take about eleven hours and involve driving in four countries to drive almost 1000 km.
Find another person who accepts Bitcoin and do business with them. Neither of you has to exchange to rubles to participate in the economy.
At some point the flow does have to exit to something that a corporation or ministry controls; so an exchange business will necessarily appear, even if it's extremely high risk; someone will be in a position to pull strings. It's not a stretch when you look at how countries with weak local currencies have been operating for decades, just usually with USD as the preferred trade currency instead.
We're talking about savings here. Buy crypto stablecoins, store somewhere encrypted. Then move out of Russia and collect your savings. Or wait it out until the dust settles.
Anyway, do you have a better way how to store wealth or savings in such situations? Crypto seems like a very good option.
I'd wager most Russians don't have savings, and need money today to feed themselves. And for most people just moving out and collecting our Bitcoin savings is not a viable option, not even in the future.
I don't have a better way, but I'm just saying that crypto is also not a good way.
According to Wikipedia median Russian wealth is only a bit over 5 kUSD per person. Ukraine 2.5 kUSD. I haven't been able to find figures for actual savings in Russia but this page https://www.expertmarket.com/credit-card-processing/countrie... gives figures for the countries that save most. Russia is not on the list, but for comparison Norwegians mean annual savings are almost 5 kUSD per year.
So Russians might not be on the edge of starvation but I imagine that a substantial minority could find themselves close to that edge quite quickly.
The median US citizen's savings is around $5k, and the US is the richest country on Earth (or so I'm told) [0]. So, my point stands: Most people don't have a lot of savings, and don't have the luxury to just save money for a later date.
That is bank account value (typically spending money and emergency fund) and does not include retirement savings (401k, ira) or other wealth stores (house, car) so it’s not really an accurate picture of long term savings.
As much as I dislike the whole crypto space, I can see how crypto stable coins (which comes with it's own risk...) could help Russian people secure their savings against government seizing and also fight against the devaluation of their currency.
I think it's naive to think that the Russian government can't interfere with funds held in crypto by Russian people. In the least, they can prevent them converting it to fiat currency.
Russia is likely to outlaw cryptocurrencies for that reason (of course the rich will be able to do it with no punishment). But the small citizen will just get visited by putin's police and beaten within an inch of dying, before being told to never touch crypto again, on the mere suspicion they are using cryptocurrencies.
In this particular case it is more likely that the other side has a high percentage of oligarchs who have had plenty of time and ability to divest to crypto and other assets outside of government control. Most of the people on the street wouldn't even know where to start. So welcome to the other side, same as this side, same as it ever was.
You are misreading my response. It was because HN is known to be anti-crypto. So I meant 'welcome to the pro crypto side'.
And to your response, maybe instead disallowing all people crypto, let's make it easier for everyone. Times like this make it more clear than ever that crypto is not just a "solution looking for a problem".
Don't forget that legal way to buy Bitcoin is through the certified exchanges that require ID verification. Meaning, these certified exchanges will comply with all the sanctions and getting money back in your bank might not be trivial and risky.
I am saying that conversion back to RUB (actually something you can use to pay for gas/food/rent) is still going to be problematic. Meaning that you're supposed to pay tax and if amount of money is somewhat significant, you might get your bank account auto-blocked.
LocalBitcoins is blocked, but there are still analogues (not with greatest rate, but anyway).
Russia <-> Crypto relationship is complicated and recently Central Bank proposed additional restrictions, but its not approved yet.
> I am saying that conversion back to RUB (actually something you can use to pay for gas/food/rent) is still going to be problematic.
I suspect - but absent evidence this is speculation - that you can probably pay with gold and 'hard' currency easily right now in Russia, this was the case before the iron curtain fell (illegal, of course) and I don't see why it would be any different today. People hate being paid in a currency that loses double digit percentages of value overnight.
Well, a google search for "localbitcoin arrests" has about 317,000 results.
Also, if you want to arrange buying bitcoin (with rubles) in person with a stranger on the internet, and arrange physical meetup in some secluded spot in Moscow, then getting arrested might not be your only worry.
With a vast graph containing every wallet and exchange you ever traded with. The onramps to crypto are becoming more and more monitored by law enforcement agencies to the point that remaining pseudonymous is beyond all but the most paranoid.
It doesn't matter how you exchange ownership. You still need to obey the law.
Have you tried taking more than 10k € across an airport?
And just because you normally can't move money to north Korea, if you do this with P2P you are equally breaking the law. Same for Iran and Venezuela I believe
Why would you buy Russian securities for bitcoins? I mean literally? You buy securities for profit. In current political situation buying anything from Russia is more like making a donation to terrorist organisation. So why anyone on Earth will be doing that?
Because great companies can be bought for pennies on the dollar? It’s irrelevant now because they’re trying to prevent foreigners from selling and the sanctions are probably going to get worse but if I was a Russian with good savings I would probably buy. It’s unlikely that there will be any actual war in Russia itself which means the aluminum plants pipelines etc should be fine (although maybe limited in who they can trade with).
What do you think about selling software with Russia? I’m unbalanced between taking their money for my software, or not taking that money and it stays in Russia and they’ll hack my software…
> In current political situation buying anything from Russia is more like making a donation to terrorist organisation.
I don't agree with that statement.
(a) Russian stocks have crashed hard already, and if you believe war is already priced in, you could buy in low, sell high at a later date, and donate proceeds to Ukraine rebuilding efforts, effectively creating a Russia->Ukraine money funnel
(b) Putin might be a terrorist, but most Russian civilian businesses are most certainly not. Many of them don't support attacking Ukraine, as evidenced by the numerous protests in Russia, and likely a whole lot of other people that would protest but are afraid to. The way I see it, "Russia" isn't attacking Ukraine, a corrupt leader of Russia is.
I think you're directionally correct. It's too late for Russia to amass any amount of BTC to mitigate sanctions. They need to exchange something of value for the BTC, and right now, everything they own is worthless or (figuratively) radioactive. However, every time currencies, banks, and payment systems are disrupted, demand increases for alternative trade and transfer mechanisms.
Yeah I was thinking about this - surely the incentives for Russians to buy crypto just went through the roof? Is it worth anyone's money to receive rubles in exchange though.
Ironically, the countries that Russia would have been able to trade with in BTC (China, India etc) are the countries that are most resistant to crypto.
This is because major countries with their own currencies do not like having dollarized economies. Trade with the west could be done in BTC because there is no blanket prohibition on business with Russia just mostly their financial institutions. Promoting CIPS is probably the best option.
Please don't post unsubstantive and/or flamebait comments to HN.
Edit: We've had to ask you this more than once before, and ban accounts that don't stop, so please stop. It's not what this site is for, and it destroys what it is for.
Please do not take HN threads further into ideological flamewar hell. Definitely not cool.
Edit: We've had to ask you this more than once before, and ban accounts that don't stop, so please stop. It's not what this site is for, and it destroys what it is for.
I think the underlying point is not about the actual Canadian truckers, but the fact that Canadian truckers got all their donations canceled by a central authority.
You might think that the central authority was right because the truckers were all 'crazy conspiracy people', but the underlying point remain : if you're in a line of politics that can get you on the wrong side of a central authority that can stop you, might be better to go for solutions that are less dependent on central authorities.
Indeed. Towards what the GP comment was saying, maybe they need to ask how this road to hell was paved with good intentions? Especially for cryptocurrencies, Signal and the internet.
The same technology used by Ukraine donators is also used by terrorists, criminals and extremists. Maybe ask why they use it? Or even in the case for Signal, the same users who want privacy and want to chat securely and send MobileCoin to each other, the same extremists are doing just that on Signal and financing their criminal activities with MobileCoin to each other; with that being completely untraceable.
All these libertarian technologies can be used by anybody, including the 'crazy conspiracy people' which some of them once thought that mass-surveillance was happening to everyone vs those who said: 'If you have nothing to fear, you have nothing to hide'.
Those 'crazy conspiracy people' they speak of built those tools and it's a double-edged sword since anyone can use them.
I think that the point is, Canada has demonstrated that, by using laws allegedly designed to combat terrorism, governments can easily cease FIAT assets and accounts from political opponents... or everybody.
or, charitably, I don't know why you would buy crypto when you can buy bucks or euros, maybe you should ask people who are buying crypto instead of bucks or euros why they do it. If the answer sounds like crazy conspiracy talk then you may have an answer.
Can you please stop posting unsubstantive and/or flamebait comments? I don't want to ban you but you've been doing this repeatedly, and if you keep it up we'll have to. It's not what this site is for, and it destroys what it is for.
So you can have a Ruble-like crash of your investment every 3 months with Bitcoin? Have any of the clowns suggesting crypto like a broken record ever looked at a 1yr chart of that?
Swiss government just anounced in a press conference, that they will implement the EU sanctions. Accounts of the listed persons would be frozen effective immediately.
Cash Swiss francs remain a popular way for Eastern Europeans to save and hide wealth. This demand can impact the exchange rate even with sanctions in place.
>a popular way for Eastern Europeans to save and hide wealth
Save - I'd not think it's not a popular instrument, and it's hard to buy lots of it. (Technically you can trade it as forex and the let the position open?). Hide - as in "cash under the blanket": 1) moving cash in the EU is regulated (ie 10k euro), and to do that they'd have to have an account in CHF send money (in any other currency to), and then withdraw in cash. I am not sure how many banks offer CHF accounts outside Switzerland.
Ironically, Russian central bank recommended complete ban of crypto like 3 weeks back while their finance ministry was pushing to make it more main stream. I guess people at the Central bank didn't get the memo about the rogue invasion. Its the same story in many countries including India, EU, IMF. Central banks don't see beyond their own noses when it comes to also taking geopolitics into account. Seems like they all study the same stale theories in universities and give the same stale recommendations.
The job of the Russian central bank is to safeguard the Russian economy.
It reminds me of German civil servants who ran the numbers and advised Hitler that the country was going to lose. Recommendations are worthless when politicians ignore them and declare war anyway.
>It reminds me of German civil servants who ran the numbers and advised Hitler that the country was going to lose. Recommendations are worthless when politicians ignore them and declare war anyway.
