In April I wrote for To The Moon an article about alternatives of popular social networks and chose to receive my fee in Tether—a stablecoin connected to the dollar’s exchange course, so I wouldn't risk my money. It was my first experience with cryptocurrencies. Here is what I learned about it summed up in five main tips.

1. Find the right coin

Sounds obvious, but first thing first. Regardless of the goal, your first step should be deciding the type of crypto to get the funds. There are a ton of currencies with different levels of reliability and usability for your future transactions.

Number of cryptocurrencies over time. Source: explodingtopics.com/blog/number-of-cryptocurrencies
Number of cryptocurrencies over time. Source: explodingtopics.com/blog/number-of-cryptocurrencies

There are two most applicable coins right now for donations and crowdfunding: Bitcoin (BTC) and Tether (USDT). And if you think you know everything about BTC, there is USDT. They call it stablecoin where «stable» means that Tether is tied to a real-life US Dollar course.

These two coins are the best options for one reason—they are very popular in the crypto world. So you can always find a way to sell it to someone.

But there are some nuances. Bitcoin is a very volatile coin, one can’t predict its course. The price for BTC could hugely change in the short term, but over time Bitcoin always grows from the beginning. It can be a successful investment for the long term (years, for example). Crypto-guys called it digital gold for historical growth.

An image by Edik Katykhin
An image by Edik Katykhin

Tether—quite another matter. Price for USDT has strong ties to USD (without «T»). So this coin has stability, but this stable status is secured by money from the company emitting Tether (also called Tether). It’s obviously not the US FED but from 2014 till now that’s stayed safe.

I conducted my own crypto-research and after talks with a bunch of people close to the subject matter finally chose USDT. It sounded reliable enough and easy to cash out if I needed it.

2. Find the wallet (and the chain)

Choosing a coin was just the tip of an iceberg. The next step is choosing the crypto-wallet and the blockchain network. It’s a hell of a work – there’s a ton of chains (you literally can make your own). The Blockchain network you choose will define the fees and ability to transfer and manage the money.

It’s like a bunch of different financial systems that you can choose. One will give you speed and reliability but will cost a lot, others will be cheaper but work not so well.

Some of blockсhain networks. Source: kucoin.com. A screenshot by To The Moon
Some of blockсhain networks. Source: kucoin.com. A screenshot by To The Moon

One of the most popular networks is Ethereum (ETH), yes, , but it’s also one of the most expensive ones in terms of fees. If you are operating with a small number of coins like me, Ethereum Blockchain is not the best option, but it’s still very reliable and fast. You can use the Binance blockchain network instead. Also as TRON or Algorand. All of them will cost lower than ETH, as I found out.

So I chose the right coin but the wrong Blockchain. That’s got me in the trap of fees — if you are not operating tens of thousands of dollars, you will pay a huge ETH to complete transfers. Price could be up to 30% of one transfer.

If you will fail with the Blockchain choice like me, you could pay the fee twice. Because for transferring in Ethereum Blockchain you need to have Ethereum, so you will need to buy some ETH and pay a fee, then pay a fee in ETH to transfer your currency.

Transfer from Ethereum Blockhain. Source: metamask.io. A screenshot by To The Moon
Transfer from Ethereum Blockhain. Source: metamask.io. A screenshot by To The Moon

A good wallet is a key to future operations. Several wallets tend to infinity so we will talk about a limited number of them. A wallet is a place where your money will be stored, but these virtual safes can’t keep all the coins. For Bitcoins, it’s Blue Wallet and Muun Wallet. For other coins, the best options are TrusteeWallet, Metamask, and Blockstream Green.

My choice was the Metamask wallet—it’s one of the most mainstream wallets right now. It’s simple, but you should be careful with the blockchain you choose. There are also nuances to blockchain compatibility. Not all wallets will support blockchain networks you can choose, so you should research that beforehand. For example, Metamask works by default with Ethereum Main Network, other coins can be added only manually.

3. Think about cash-out

If you want to use the money you got, you should think about cash-out. There are some aspects you should know: that’s not that simple like with regular currencies like USD to something. To transfer cryptocurrency to regular money without any problems, you should have a trusted broker or seller.

But there are other options. You can use exchange platforms, ATMs for cryptocurrencies (in some countries), and online converters. Not all of them are safe, and definitely, they’re not anonymous. You can choose between usability, optimal conversation course, and anonymity, but can’t choose both.

There are a bunch of services you can use to be more anonymous. BTCPayServer is a program that gives a new address for transactions to every pay. It can protect you from thieves – no one will know how much money you have when you got them and what you’ve done after. BTCPayServer requires technical skills, but the broader community could help. Another service is Strike. You can pay in regular money, but the receiver will get cryptocurrency.

An image by Edik Katykhin
An image by Edik Katykhin

You can also exchange and deposit your crypto there. But there are always fees and that’s not the best instrument for transferring money. The online-exchanging services are the best option, but usually, they swap only a certain amount of money.

There are a few popular mainstream exchanges for cryptocurrencies. I heard that Binance blocked some accounts, so I chose KuCoin. The interface looks familiar to me — it reminded me of neo-bank products. It’s simple but useful and after registration, you get a quick guide.

Asset management screen at KuCoin. Source: KuCoin.com. A screenshot by To The Moon
Asset management screen at KuCoin. Source: KuCoin.com. A screenshot by To The Moon

Services like KuCoin can be used as a «bridge» between blockchain networks. You will pay for that too, but your money will not get away. Because you can’t transfer cryptocurrency between different works directly—that will likely result in asset loss. That’s even warnings at some wallets like Metamask.

Metamask disclaimer about direct transfer between different networks. Source: metamask.io. A screenshot by To the Moon Metamask.
Metamask disclaimer about direct transfer between different networks. Source: metamask.io. A screenshot by To the Moon Metamask.

4. Call the lawyer

To make things right you can do everything legal. Cryptocurrency exists for quite some time, and there are many understandings of it in terms of the law. Usually, you can’t get through it by yourself so find a lawyer with a crypto specialization or successful cases.

When you get paid in crypto, you stand up to the question: Do I want to pay taxes or not? In some countries, you can’t get paid in crypto legally. Just because cryptocurrencies aren't recognized as payment methods in the country. In my case, you should pay taxes if you cash out your money in real-life currency to pay for something. Also with a lawyer, you can foresee some things. For example, you can include gas fee’s in your contract or find some way to avoid future problems.

I didn’t do all of that and I don't regret it. With my amount of salary, it was not necessary, but in some countries like the USA or Europe it could end up with fines. So better work legally if you can.

An image by Edik Katykhin
An image by Edik Katykhin

5. Know your government

Not all countries welcome cryptocurrency. Always check the local aspect of your operations. Even if the crypto world is not banned, it can be strictly regulated in the country. That happens because the government can’t fully control the blockchain projects, so it's easier to lock down the whole digital nomad financial system.

It can be regulated for individual aspects like Initial Coin Offering (ICO)—a mainstream method of crowdfunding by issuing crypto-tokens on the blockchain. Usually, ICO gives early investors the chance to acquire tokens that can be rewarded by the product or the ability to earn more money later.

The legal classification of ICOs remains murky. They can’t be defined as donations, because they give crypto-token purchasers a stake in the company, but they also can’t call the stock's alternative. US Securities and Exchange Commission (SEC) regulates crypto-tokens as securities anyway. In some countries like Russia, the central bank could define crypto-currencies as surrogates for regular money. But you could earn it, you just legally can’t get stuff for this money and get the profit from them.

My (Russian) government doesn't strictly regulate cryptocurrencies as of now. So I could get paid in cryptocurrencies (but with a better understanding of the process). But it could change soon, so it is better to be prepared.

An image by Edik Katykhin
An image by Edik Katykhin

Why I don’t want to do it again, but I’ll have to

After my first experience with cryptocurrencies, I realized why it probably never could become a mainstream financial system for everyone. At this moment you just need to know too many details and make too many preparations to not get fooled.

You should know how to avoid fees, conduct your research to find the right wallet for your purpose—they are not universal—then think about taxes and regulations. And most important—how to make cash from it. It could require way more time, energy, and focus than any money transfer in your life. And it’s all up to you: there’s no guarantee that you will do everything right.

In some countries like UAE, it could be simple: you can get cash from an ATM or pay with crypto. In many others, it will not. But in a world where countries could block money transfers of each other's currencies, crypto could be the only way to get money from abroad or send it away. So I won't give up and next time I will be prepared and will switch my account to the TRX20 network with much lower fees.

UPD: I got payed for this text also in crypto—but without any huge fees this time. How did I manage it? I switched to USDT in Tron Network (USDT-TRC20).