The dream of making it big in Crypto is becoming more and more popular everyday. This popularity has become increasingly significant in third world and developing countries, to the extent of even the Venezuelan Government is launchings its own “cryptocurrency”. It seems like nobody wants to miss the get-rich-quick crypto train, but we have got to ask ourselves: is living of crypto really as it easy as it seems?
The great thing about cryptocurrency is that it has literally no entry barrier. Anyone can anonymously use, buy and trade coins and tokens. In one hand, this provides great freedom to people around the world who come in this industry chasing the #thecryptolife hashtag, however it also provides great hurdles for banks and financial institutions who are lost and unprepared to deal with these new kind of customers (kind of like your grandpa trying to figure out how to use the new ipad).
Living of Crypto: The reality
Living of crypto really isn’t as glamorous as it seems. We are still in the very early days, governments and banks simple don’t know how to deal with “blockchain professionals” like us. Most countries still don’t have the systems in place so that a Blockchain Company can register and have a simple bank account to receive payments.
But why do banks and institutions think so poorly of the blockchain industry, are we not providing innovation and entrepreneurship? Well, here is the thing: most governmental institutions are still in the stone age, they need you to prove with some kind of invoice bill that you bought that crypto that made you rich, if you don’t have it there is no way of proving where those coins come from and because they don’t want to take the risk of you been a very high-end tech-savvy drug dealer they will simply exclude you from their banking system.
The problem is even more complex if you are in the mining or block producing industry. Because how can you invoice the decentralized blockchain that is paying you for the infrastructure you are providing? It is simply not possible.
The Crypto Species.
Now, I have been in the game for a while so I have meet all kind of crypto people. First, you have the libertarian rebels that just don’t care and live a happy non-banked crypto life (fuck the system man). This crypto species is mostly found in South America and other developing countries, they are used to seeing injustice in all parts of their society, which has given them a weird sense of right and wrong. If they believe the rules are wrong or obsolete they will do what they think is right and in case someone questions them they will argue their way into convincing them of their line of thinking. The libertarian rebels usually don’t have any troubles except for when they want to spend their Bitcoin to buy the Lambo and the Beach House, as they don’t have any means to justify their hard-earned crypto fortune.
The second group of the crypto community is the business wannabes . This sort of crypto person is commonly found in first world countries where people have a tendency to respect the rules, even if those rules are unfair the wannabes will follow them as they know their government will impose a harsh punishment if they don’t. The wannabes have the same troubles having a business and opening a bank account as the libertarian rebels, so they look for more flexible legislation to carry out their operations like the Cayman Islands or the Isle of Men for instance. Others will stay in their country of residence but open a front-end cover that has nothing to do with their real business, like selling furniture or a consulting agency. Now, what is ironic about this group is that even when they want to comply with the current set of rules, they often end up breaking even more rules by trying to fit in with the obsolete legislation.
The way forward
Now, not everything is as grim as it looks on first glance. There are some countries that are making a great effort to adjust their laws and systems to be able to adopt all the different crypto species out there. Estonia and Malta are great examples of this and I am sure more countries will follow.
If you are into crypto and you are making your first hard-end money, the first thing that you need to understand is that you are not doing anything wrong and as long as you don’t do anything wrong you will be ok. When you want to buy cars and real state, get an accountant, it is highly likely that your first accountant wont know a thing about your situation, so fire him and get another one, and so on. When your money hits the bank, pay all the taxes they tell you to pay and be ready to answer the question: “where that money came from” if your account gets flagged. But most importantly DO NOT PANIC!
I wish someone would have told me all of this when I started “living of crypto”, so here you have it, I hope it helps!
Side notes:
1 This is an opinion article that approaches with comedy the issues of living of crypto, do not take it to seriously
2 I know that people who are into crypto are not species, they are respectable human beings that are trying their best to take us to the future, I just thought it was funny and I went with it
3 Thank you Cypress Hill for providing inspiration for the title