Going Crypto with Roubles For Those Who Haven’t
Over these past two weeks I have received a number of requests from non-Russians living here in Russia on how to get involved with cryptocurrencies, and also while having them be able to get cash roubles or other currencies as and when needed. I decided to spend this Saturday scribbling my how-to, which I hope will be clear, and useful. This is a raw starter piece, something along the lines of having dollars in your pocket and stopping at a ‘change’ booth at your local Metro to convert into roubles – nothing fancy.
There are as of this writing over 5902 cryptocurrencies, altcoins and tokens trading in crypto markets. Some think they are all called ‘Bitcoin,’ they’re not. For practical purposes the markets look at the top 50 as this is where the volume and liquidity are at this time. Bitcoin happened to be the first that started and startled the world with a cryptocurrency.
Bitcoin was the first, the priciest, and best recognized name, but in terms of practical applications (Dapps) it is less deeply or widely useful as Ethereum, or some other more recent, nimbler cryptos such as ChainLink that are coming into their own. Ethereum ushered in the era of practical commercial applications (Dapps, Defi) coming at us from the several development highways.
Not too long ago, during the world cup soccer event in Moscow I wrote an article “A Crypto Cherry Broken in Russia”, which was my very first attempt at crypto use and my personal demystification path inside Russia.
Most of us would have loved to have bought Bitcoin or Ethereum in the dark ages (pre-2015) when they were priced at less than US$1.00. Since those times, the multiples of growth have been and keep on astounding our world. In general, the use-cases for the various Crypto’s is only now truly developing into applied business, although developing with unprecedented geometric disruptor speed! It is therefore no wonder many Crypto investors have been buying in as speculators, not necessarily users, and the crypto term for this is “HODLERS”. No, it is not a misspelled “Holders”, it means “Hold On for Dear Life”, which is what many have been and are doing through thick and thin times.
In keeping with the Hodler way, unless you want to go the day-trading route, leveraging or very seriously getting immersed in crypto positions, I initially would stick to basics. The raw useful basics of buying, storing and exchanging your cryptocurrencies to Roubles or other fiat currencies.Then, when you have a comfort level established, definitely get deeper into the world of blockchains and their many applications.
There are about 14 major cryptocurrencies, tokens and coins which today have indirect unofficial (sandbox) links with banks in Russia. The banks used are: Sberbank, Alfa-bank, Tinkoff, VTB, and of course those accessed through some other VISA/Mastercard issuers, either in Roubles or Dollars. For those that use electronic money like QIWI, Yandex cash, Paypal, Perfect money, Skrill or Payeer those are usable as well.
The 14 cryptocurrencies currently easily traded on service exchanges in Russia from and to Roubles are: BTC, BCH, ETH, ETC, LTC, XRP, XMR, DOGE, DASH, ZEC, USDT (OMNI or ERC20), XLM, and TRX. If you have some idea of what Crypto’s you want to buy with your spare roubles that is good. If you don’t, then I suggest looking at some of the many Crypto news sites like Coindesk, Cointelegraph, and others and see what turns your crank.
A good place to start your initial hands-on experience is Best Change, which is an exchange monitoring service that qualifies services, and sets out the very latest (every few seconds) changes in buy or sell rates with direct real-time click links to those exchange services. Visiting the site and its simple format makes it all clear pretty fast. They give each exchanger a reliability rating, exchange minimums, and the latest rates for the relevant crypto in roubles, or your chosen medium. This is NOT a main global exchange like Bitfinex, Binance, Phemex or others, it is a portal to exchangers dealing in Russia, pure and simple.
Now that you know where you can electronically exchange roubles, euros, or dollars to or from Crypto, remember, this article is for use as a street exchange booth, short and simple, where the bid and ask rates are a bit wider than the main global exchanges.
To start the process you will need an online e-Wallet for your cryptocurrencies. There are also Hard Wallets, which I won’t delve into in this piece. You can find out for yourselves when and if you get serious enough with Crypto assets where security becomes a volume critical issue. As far as security is concerned, most online wallets today are quite secure, but nothing at the end of the day beats a hard wallet which is offline entirely and in your physical possession. Start with the online for small holdings, then as you get used to the rhythms of crypto, obtain an offline hard wallet.
There are different e-wallets for various blockchains. This is worth a short brief as not all wallets accept all cryptocurrencies as cryptocurrencies can use different blockchains. For example ETH (Ethereum) is part of the ERC blockchain, and all the coins and tokens based on the Ethereum protocol can only be stored or exchanged through an Ethereum wallet such as MetaMask. BTC (Bitcoin) is a different blockchain, and without some transition bridge will not be recognised in an ERC wallet and vice-versa.
It therefore is easiest to start with and use online multi-currency wallets like: Freewallet, Exodus, Jaxx, or others that advertise on the internet. They enable you to keep many different cryptocurrencies, and gives you your all important e-wallet address. You can now begin exchanging between currencies and crypto’s. For this service you will pay upon exchange or movement of your crypto a “gas” fee, which can vary greatly depending on your cryptocurrency or if you move crypto between differing blockchains.
Once you fill in the necessary details to set up your e-wallet, you will now have your e-wallet address. Remember when setting up to keep a careful written record of the security “key words”, which the wallet provider will send you. These will enable you to restore your wallet if your PC crashes, or something else goes haywire. This is different from your login and password, and should be kept physically safe and secure. It is your only ultimate proof of ownership of your assets in your e-wallet.
Lets try a transaction. I have 20,000 roubles in my Sberbank mastercard account. I am dreaming passionately of owning ETH (Ethereum) for whatever reasons. I get online and visit Best Change where on the left side of the screen I see two columns – a give column and a get column. I click Sberbank on the give column, and click Ethereum on the get column. The screen changes to show all the offerings on exchange, the minimums, and rates. I select and click the appropriate one, although the best rates are at the top they are usually the rates for higher volumes like several ETH’s, not just fractions like 0.2,0.5 or 1.
You are then taken to that selected exchanger site. There you must enter either the amount of ETH you want to buy, or the Roubles you are willing to pay. The site converts to either one based on their current spot rates. You will have to enter your name, in some cases in Cyrillic, your valid email address for the notification/confirmation of exchange and any difficulties which might arise, and you must paste your e-wallet address into the window provided. They ask you to confirm. One you click confirmation a new screen appears which tells you the Sberbank Mastercard number to transfer the agreed upon sum to. These will both be reflected on screen. You now have 20 minutes within which to pay for your crypto at the mutually agreed rate.
On your Sberbank online screen, go to transfers to Sberbank customers, enter the indicated Mastercard number, the exact sum in roubles, and make a note that this is a PERSONAL TRANSFER (important). Then go ahead and make the transfer. Once done, go back to the exchangers screen, where some of them ask that you click on “payment made”. Now you wait. If there are many users online it may take up to 15 minutes, but usually you will get your crypto within 5 – 10 minutes and you can see it in your wallet.
You are now a proud Crypto owner!
What if you decide it is time to sell your crypto and get roubles, dollars or euro’s back? Simple, it is the reverse process. On Best Change you indicate you are giving lets say ETH, and getting roubles. The offerings come up, select the one that suits, you are taken to their site and you provide the same information with the addition of your Mastercard account number in Sberbank. Once you confirm, their e-wallet address comes up, you copy it along with the exact amount of ETH you are selling. Go to your wallet, and instruct the payment (withdrawal) of that specific amount of ETH, and paste the exchanger’s e-wallet address in the space provided for it. Confirm. You will see another screen pop up with a gas fee selection, this is the cost of transfer out of your wallet. Sometimes a choice is given; slow, average and fast. Slow is less costly than fast. Make your choice and confirm. Again, some exchangers on their site have a click bar which you press when you have completed the transfer, press that, and now wait. You should get an SMS from your bank within 15 minutes that usable funds are already on your account.
There you have it. This is about as basic as it comes. Once you dip your toes into this cryptosphere and absorb the many new branches of use that are developing, it truly opens the door to major frontiers of opportunity. For instance, you are “HODLing” say 10 ETH, it is just laying there and you are seeing unrealized gains or losses as the case may be, but otherwise not benefitting from the asset as such. Today there are “Yield farms”, these are DeFi based where you can lend your crypto at varying rates, and in most you can liquidate at any time (for a gas or other service fee). If curious, have a look at farms like Compound, Uniswap, or others now opening up. In these days of negative, zero or close to zero yields, getting positive returns while HODLing your cryptocurrency makes pleasant sense while you wait until the day you decide to liquidate.
I hope this article has been useful to those who have yet to get involved in the Cryptosphere. This time of virus and lockdowns is an ideal period to get involved in getting up to speed with this major trend of the future while sitting at home or at your dachas stoking the samovar. I think you will find this to be a captivating new world that keeps on expanding before your eyes. Enjoy!
Moscow, August 15, 2020