Leaving the banking system. How to live only on Bitcoins

Bitcoin interested me from the very beginning, but until recently I considered BTC as a very beautiful cryptographic experiment with great potential, but almost without use in real life.

A few years ago, buying or selling BTC for Fiat (a “real” currency like dollars, euros, rubles, etc.) was generally not an easy task, but now times have changed, everything has become much easier.
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Therefore, I decided to live only on Bitcoins, and this is how I try to implement this plan.

Please keep in mind that the work is not finished yet, I am testing these methods right now, and do not accept my advice implicitly. If you want to go this way, you must understand what you are going on, and the most important thing is to double check every step.

The reasons

I do not know about you, but I was very tired of the banking system.

• I do not accept the concept of "trust". I don't know these guys, why should I believe them? On the other hand, in BTC, trust is not even considered as a factor.
• I do not want anyone else to control my money and credit cards. I earned this money. What the fuck is someone deciding how much and when I can withdraw from the account or deposit? Who you are?
• It does not suit me that the government has access to my account, it can watch my balance, and if it wants it, it will freeze it.
• I don’t like 2-3 days for a bank transfer, we all know that this is not due to technical reasons, banks are simply cashing in on our money, delaying them.
• Their transfer fees do not suit me, they are too high for such a low quality of service.

Of course, there are many other, smaller reasons, but these are the most important, at least for me.

Problems

As in any other big business, there are several problems that need to be solved. In this section I will discuss the main ones, and in the next section I will show you how to solve them.

1. Security

The first thing to think about security . I mean that there are many services where you can make a wallet in bitcoins, but storing the wallet on the web is as safe as their web infrastructure.

No matter how safe they consider themselves. Any web services can be hacked (or just go bankrupt, like MtGox), and in the end there is a big chance that you will lose money.

There is no central organization, there is no guarantee, the online wallet is not a bank , so no one will return your BTC if they are somehow lost.

2. Getting Fiat from a BTC Wallet

Bitcoins are great, but you don’t buy products for them, right? Do not pay for renting an apartment or a restaurant ... you need a good and reliable way to receive USD and EUR, or other currency from your BTC account anytime, anywhere.

3. Enrollment of Fiat to the BTC account

In other words, how to transfer my salary directly to the BTC wallet ... I work for a foreign (American) company and every month I receive a payment in dollars, which my bank converts to euros. I need a way to get this money directly in bitcoins, without forcing the employer to switch to payments in bitcoins. Ideally, I would give him a new international bank account number (IBAN), which is somehow “translated” into my BTC wallet.

Solutions

Regarding the issue of security , the only way to protect yourself at 99% (100% is fantasy, we all know that) is a hardware wallet. Personally, I bought Trezor (which should come tomorrow), but there are many other options .



Unlike a web wallet or software wallet created by a client like Bitcoin-core, Mycelium or others, a hardware wallet like Trezor stores your cryptographic keys (which you basically use to receive or send BTC) in the device itself and never send data on the computer. It is the computer itself that sends the data to the device, and it eventually signs this transaction.

Thus, even if the computer is compromised, the attacker will not be able to steal your BTC. Moreover, if you lose a device or break it, you can recover Bitcoins from an initialization seed (24 words) that were used for initial device initialization and are supposed to be saved, for example, on paper [or distributed between relatives according to the separation scheme Shamir's secret - comment. ].

In addition, you need to remember to use any web service only as a "proxy", never store all your bitcoins there, only transfer the minimum amount from the hardware wallet if necessary, and always use two-factor authentication.

It is good to have a strong and unique password for each web service, here you can recommend password managers like KeepPass, 1Password or SafeInCloud to generate and securely store passwords.

The first problem is solved! :)

Now we need a good way to pay in restaurants, for purchases at Amazon, to receive USD / EUR / rubles from an ATM ... this is a debit card!

There are several online services that allow you to open a BTC wallet (remember not to list all your BTC in such wallets) and get a real debit card VISA, MasterCard, etc. You credit / withdraw BTC to this wallet, replenish a debit card and then you can use it as a regular credit card and withdraw cash from any ATM of the world.

I now use the service CryptoPay , which I consider the best. To confirm your identity, it is enough to download a scan of your passport and a receipt for utility bills with the address - they will consider that they have verified your identity. After that, you don’t have any limits at all , you can top up the card as many times as you like for any amount, just like a regular debit card from the bank.

The second problem is solved!

It remains to find a solution to the last problem - transfer the salary (or other type of income) directly to the BTC wallet. There are two services that allow you to do this, now I'm testing both. I also asked to share the Reddit user experience in order to be 100% sure:

• Cashila.com
• BitWage.com

They work almost equally, providing you with certain bank details with a unique identifier. You should ask the employer to transfer the salary to these details, and they will be automatically transferred via the blockchain to your BTC wallet.

Cashila also allows you to make non-cash bank payments, so if you need to pay bills, pay for an apartment or anything else with a regular money transfer, it can be easily done from your Cashila account, but BitWage does not have this option.

The third problem is solved!

findings

Using the above services and tools, now you can only live on Bitcoins, you will never need to open a bank account again.

You might think: “Yes, cool, but bitcoins are unstable, their value can change at any time” ... this is half true. Their cost really jumps much, but not like before. For example, over the past three months, it has fluctuated between $ 373 and $ 479, which seems great, but if you enter the Bitcoins at the right moment, you will not lose anything, and if you compare with standard banking commissions, you will most likely find yourself in the black anyway.

In a few months, I will write a great article with more recent information about the results of my decision to live only for Bitcoins ... In the meantime, let's hope for the best! :)

If you still have doubts or questions, Bitcoin Reddit will be a good source of information.

About the author. Simone Margaritelli , Italian hacker, mobile systems security specialist, lead C / C ++ programmer at Zimperium, writes in Python, Ruby, Java, Node.js, assembler (x86 and ARM), PHP and C #