CEO of Nethemba - Slovak IT security company founded in 2007, primarily focused on web application security and various penetration tests.
Achieving financial freedom using cryptocurrencies (2019 edition)
Let me introduce myself
- Perpetual traveller using crypto daily, with no permanent /tax residency in the EU
- Cryptoanarchist & voluntaryist focused on technology and society hacking
- IT security guy, founder of IT security hacking companies (Nethemba, Hacktrophy) & contemporary art (Satori)
- Co-founder of Bratislava's and Prague's hackerspaces (
- Member of Czech contemporary anti-government artistic group Ztohoven
- Responsible for many anti-government & digital privacy projects www.nepracujemeprestat.sk, www.internetbezcenzury.sk
Why do we need financial freedom I?
Ban of cash: the state forces you to use bank accounts
- Prohibition of anonymous cash in many EU countries above some limits including Czech and Slovak Republic, and it is becoming worse (India)
- In some EU countries it is impossible to use cash (e.g. Sweden, The Netherlands for many services)
- Above some cash limits, you cannot avoid using bank accounts even if you do not trust banks (e.g. 5000 EUR limit in Slovakia or only 1000 EUR in Spain!)
Which also means:
- The state forces you to use the financial transaction it can track & spy
Why do we need a financial freedom II?
Spying & tracking & blocking of all your transactions
- It is a drastic intervention to citizens' digital privacy - card payment companies, banks, government institutions - all of them can track your financial transactions
- There are a lot so called "protective regulations" like KYC, AML leading to "financial dictatorship"
- International payments (out of euro-zone) are thoroughly inspected, blocked by banks requiring a lot of bureaucracy - you are suspicious & have a burden to prove your innocence
- Above some limits your bank sends automatically notifications to the government officials...
Why do we need a financial freedom III?
Misuse by credit card / banking employees & hackers
- There were many incidents in the past when bank employees misused sensitive customer's information. And KYC database was hacked!
Information exchanged by OECD CRS can be leaked (by potential hacking attack or internal employees)
EU legislation "schizophrenia":
- According to GDPR, we should limit the number of gathered sensitive information about EU citizens (GDPR recommends to use both anonymization and pseudonymization)
- At the same time another EU legislation prohibits people to use anonymous prepaid cards, anonymous SIM cards, make anonymous transactions, ...... WTF?
Why do we need a financial freedom IV?
Because it is an effective protection against seizure of your assets by the government
The government can:
- freeze your bank account
- take your physical cash or gold
- take your property or land
- suspend your business
- In Czech Republic the government has destroyed many innocent companies by freezing their bank accounts (!)
- This wouldn't happen if they used crypto instead of bank accounts
Real digital privacy starts with protection your financial transactions
Bitcoin is not anonymous
In addition to Bitcoin, there are truly anonymous cryptocurrencies
- Monero - Ring Signatures, Ring CT, stealth addresses (fungibility)
- ZCash - zk-Snark (fungibility), requires a trusted setup
- ZCoin - Zerocoin protocol
- Particl.io - Ring Signatures, proof of stake
- Ring Signatures is more verified/stable crypto than zk-Snark/zerocoin protocol
- Bitcoin Lightning Network (Onion routed micropayments)
Bitcoin (especially when you change recipient addresses frequently) can still provide you a significantly better privacy than a traditional banking system
- Check Wasabi Wallet https://wasabiwallet.io/ with CoinJoin shuffling
Anonymous cryptocurrency exchanges
- The most popular ones (Coinbase, Kraken, Bitstamp, Bitfinex, Btc-e) are definitely not anonymous and have to follow AML/KYC regulations, expect governments can know everything about your Bitcoin trades
KYC database of Bittrex, Poloniex, Bitfinex, and Binance was hacked & sold at the black markets (45 USD for scan of passport/ID + proof of address + selfie)
- Localbitcoins.com (prefer trusted people trading with cash, public places for a physical exchange, use Tor & anonymous email)
- Localmonero.co (be aware of government secret agents:-)
- Bisq (prefer trusted people trading with cash, it supports fiat - SEPA/Revolut/N26)
- Hodlhodl (Global P2P Bitcoin exchange that doesn't hold funds)
- The comprehensive list of decentralized exchanges https://github.com/distribuyed/index
- Use your local anonymous Bitcoin ATM (expect at least 3% fee)
- Contact your local Parallel Polis or hackerspace :-)
Use SEPA gateways with BTC
- Has a strict KYC/AML process (requires a video call)
- It is a complicated to use - firstly it is necessary to top up your online BTC wallet, then change BTC and make SEPA payment (which requires two time-consuming and expensive BTC transactions)
- They require tax ID (what should I use if I am a perpetual traveller? :)
- Your SEPA account can be topped up with BTC, they charge 1% or 0.0025 BTC what is quite expensive
- The best solution is to make SEPA withdrawal from the crypto exchange (Bitstamp/Kraken) directly to Mistertango.com (they are crypto friendly)
Bitcoin SEPA gateways without KYC/AML
- Anonymous SEPA payments are allowed only for <1000 EUR transactions
- The most easy way to pay your bills
- No KYC/AML, therefore it is anonymous
- It is a bit expensive
- Above 1000 EUR they require KYC/AML
- They support CZK/EUR and BTC/LTC
- Or visit your Paralelni Polis community! (in Prague, Bratislava :-)
Let pay your invoices by community without KYC/AML
- Check the service https://lamium.fi
- Upload any invoice (no registration needed!)
- Pay in BTC
- Your bill will be paid within 24 hours by the network of approved payers
- They charge 1.97% of the invoice sum plus a fix amount of 0.0001 BTC per invoice.
Expect no anonymity in case of Bitcoin debit cards
- All VISA & MasterCard prepaid bitcoin cards issued by Wavecrest were blocked (it was the majority of all bitcoin cards) including Mistertango debit cards
- The working Bitcoin debit cards are Bitwa.la and Wirex
- Wirex support XRP/ETH/DAI/LTC/BTC/WLO/NANO/WAVES
- Now there are no "anonymous" debit cards at all (in the EU there were prohibited one year ago because of "terrorism threat")
- If you want to some kind of privacy, issue your (Bitcoin) debit cards to an offshore company with nominee director
Consider to use Revolut
- Revolut is not a bitcoin debit card, but it has a strong competitive advantage - free ATM withdrawals anywhere in the world up to 200 GBP/monthly (then 2%) - with Metal program it can be more, free currency exchanges up to 5000 GBP/monthly (then 0.5%)
- Ideal debit card for travelling if you want to have best currency exchange rates
- It can be topped up by any Bitcoin debit card (!)
- They also have business accounts (suitable for any EU companies)
Consider to use N26
- N26 has a stricter KYC/AML process than Revolut
- N26 has better fees for ATM pickups in Euro zone
- N26 cannot be topped up by any debit card, just using SEPA payment
Consider to use TransferWise
- Ideal for perpetual travellers (they do not verify proof-of-address, so scanned passport is sufficient)
- They are crypto-friendly (they accept SEPA withdrawals from crypto exchanges)
- They are very fast (SEPA payment approx. 2-3 hours)
- There is no monthly subscription, just small fees for payments
- ATM withdrawals up to 200 EUR for free (then top up your N26:-)
Will you report my transfers to the tax authorities?
TransferWise Limited is a UK company authorised by the Financial Conduct Authority as an Electronic Money Institution. We are still evaluating the impact of the Common Reporting Standards, including FATCA, to our business and how we will adopt the new requirements. At this time we are not reporting this information to HMRC or any other tax authority.
Invoice your customers in fiat, but receive BTC
- Check bitwage.com
- If you are an entrepreneur / small company, you don't need a bank account, just issue the invoice with bitwage.com, they generate unique SEPA payment details, the customer will pay your invoice and you receive bitcoins only
- It requires your personal verification (a photo with your personal ID)
- There is no similar anonymous service (probably because of money laundering)
Bitcoin mixing services XMR.TO
- Send your anonymous Monero and receive "clean" bitcoins (Monero transactions are anonymous by default)
- It works through Tor network as well
- Fair conversion rates & stable service
- Be aware there are multiple "blockchain forensic agencies" working for Interpol / governments - using mixing service you can easily destroy your real Bitcoin blockchain history
- There are still some crypto exchanges where you can buy Monero (below specific limits) without KYC/AML
Change your tax/permanent residency
- Using crypto-currencies does not make economic sense in countries where you have to tax your profit from conversion rates (crypto vs. fiat), but at the same time you cannot use your potential loss as your expense (e.g. Slovakia)
- For these situations it makes a sense to change your tax/permanent residency to more free - territorial taxation countries like Panama (see https://liberation.travel)
- In this situation you are obligated to pay taxes only from your local Panamanian income
- Be aware that officially for not having a tax residency in the given country, you should not stay there more than 6 months per year
Let's switch to complete bankless setup
- Issue all invoices to your customers using bitwage.com
- Prefer direct bitcoin or monero payments everywhere as possible
- Check www.coinmap.org
- Pay all bills using Lamium.fi, Simplecoin.eu or Bitbill.nl
- Pay the rest using your bitcoin debit cards (Wirex, Bitwala)
- if you travel a lot, use Revolut topped up by your bitcoin debit cards
Bankless setup - more anonymous scenario
- Invoice your customers directly in Bitcoins / Monero
- Mix your received Bitcoins using XMR.TO
Prefer direct bitcoin payments everywhere as possible
- Check www.coinmap.org
- Pay your invoices using Lamium.fi or Bitbill.nl that do not require a registration
- Pickup your cash from Bitcoin ATM machines regularly and anonymously
- Never use Revolut or N26 (it's not anonymous)
- Change your permanent/tax residency to a territorial taxation country
Hardware wallets for truly anonymous cryptocurrencies
- Trezor does not support Monero yet (only in testing), but it is almost done
- Trezor supports ZCash, but not anonymous transactions
- Nano Ledger S has a stable support of Monero
- Monero community develops "Dedicated Monero hardware wallet".
- It still better to use software wallets (original getmonero.org wallet)
In Paralelni Polis it is possible to buy XMR for cash as well as to use XMR to pay coffee!
General Bytes ATM/POST terminals have XMR support.
The privacy of government fiat money is dead.
Long life to anonymous cryptocurrencies!
Thanks a lot for your attention!
Achieving financial freedom using cryptocurrencies (2019 edition)
By Pavol Luptak