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Title: Bitcoin Helps Humanitarian Aid In Ukraine
Originally reported on bitcoinmagazine.com by Bitcoin Magazine
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Bitcoin Helps Humanitarian Aid In Ukraine
This is a recording of a recent Twitter Spaces conversation about using bitcoin to get humanitarian aid to the people of Ukraine.
Listen To This Twitter Spaces:
Transcript.
[0:07] CK: Hey, how’s it going, Gleb?
[0:09] Gleb Naumenko: Not so bad. Mostly back to work at this point with the Bitcoin stuff. But also, yeah, that’s it.
[0:18] CK: Yeah. Of course, that’s a touchy question these days. We’re glad to have you on. Definitely excited to learn a little bit more about Bitcoin and how it has been a force with what you’ve been experiencing. I know that Gladstein is joining here momentarily. I just want to give a quick shout-out to the folks listening.
This is the Bitcoin Magazine Spaces. We’re going to be covering Bitcoin in Ukraine and go more in-depth into Alex Gladstein’s recent article, “Currency of Last Resort,” which was published in Bitcoin Magazine last week and heavily featured Gleb and other Ukrainian Bitcoiners’ stories. So, really excited about that.
I also want to give a shout-out to Bitcoin 2023. Presale tickets are on sale now. More details will be released shortly and ticket prices will be going up with those details. So, if you’re going to go to the conference no matter where it is, and what time of year it is, get your tickets now. VIP, as well as GA tickets, are available.
Hopefully, Gladstein jumps in here momentarily. But, yeah, that’s it for me right now. I’m going to go grab Gladstein’s article and throw it up here in the nest.
All right and with that perfect timing from Gladstein. So, he just joined. Hey, how’s it going, Alex?
[1:52] Alex Gladstein: It’s great.
[1:53] CK: We got you. We got Gleb. We’re ready to start.
[1:55] Alex: Awesome. Gleb, can you hear me, my friend?
[1:57] Gleb: Yeah.
[1:58] Alex: That’s great. Well, look, last week, we spoke to a friend who was in the Central African Republic, another war zone and we had to engineer a way to speak. It sounds like your internet’s better but if you run into any issues, CK will be happy to MacGyver something for you. But, anyway, we’ll get started. Thank you all so much for coming. I just wanted to provide a brief overview and then we’ll get into it with Gleb because we really want to hear from him.
Basically, my takeaway from doing 5 months of research and writing for my essay, “Currency of Last Resort,” which explores the stories of Ukrainian and Russian Bitcoin users is that this geopolitical moment makes Bitcoin’s global utility as a humanitarian instrument undeniable. I mean, you would have to be so ignorant and the only word to describe it would be ignorant. I mean, the way that people are using Bitcoin right now in Ukraine and Russia, where they don’t really have other options and we can talk about stable coins as well here specifically Tether, but the way that people are using, let’s say these 2 instruments, is just so clear and obvious.
It would take a lot of head in the sand mentality to deny Bitcoin’s humanitarian utility at this point. I know that I wrote a whole book about the million different ways people are using this thing all around the world. But I can’t really think of a more vivid explanation for why we need Bitcoin than the financial problems people are having in the time of war when this is the last resort when they have nothing else.
So, the essay explores the story of Gleb here, who we’ll get to talk to, which is awesome. He’s a Bitcoin developer. He’s currently in Ukraine. It explores the story of a guy named Aleksey, who is a Crimean Bitcoin educator who runs the world’s largest Russian language Bitcoin educational website. He’s currently living in Lugansk, which is currently a conflict zone that is claimed by Russian separatists in the eastern part of Ukraine.
I also interviewed Anna Chekhovich who’s the Financial Director for Alexei Navalny’s Anti-Corruption Foundation in Russia. All 3 of these people, obviously Bitcoin’s like a big part of their lives in different ways. I go into that in the story.
I also got a chance to do a lot of other backgrounds, obviously, and I spoke to the Ukrainian government including basically the official who is in charge of the idea of doing a cryptocurrency fundraiser and just learning from him about what their vision was and just some amazing information like the fact that they raised $20 million in the first 48 hours of doing that fundraiser before any money had come in from any other country.
Again, these facts and realities are just undeniable at this point. You literally have to be with your head in the sand to deny the utility of this, it was my main takeaway from doing this essay and I was very privileged to be able to work with Bitcoin Magazine. So, thank you, CK and team.
So, we’ll hear from Gleb. I guess, Gleb, maybe we’ll start with just your perspective on how it’s going for you and your insight from what’s happening in Ukraine more broadly. Then we can get into your connection with Bitcoin and how it has been useful for you and how you’ve used it to help people right now. So, go ahead, my friend.
[5:51] Gleb: Well, to give some context from the essay and in general, this invasion was a big surprise for me despite all my American and Western friends telling me to leave the country and asking me what I’m going to do. It was an unexpected case. I would be helping with some stuff locally but it was impossible to predict.
I gave an interview a week ago before the invasion to some hacker-related magazine about Bitcoin and dissidents and how it presumably could help the war. I was thinking about something different. I was looking at Kazakhstan. I don’t even remember what happened there. Some riots or some, yeah, there was a 2-day power outage where people couldn’t use banks and they would have to find cash or sell their cars to just buy food because they couldn’t withdraw money from their bank accounts.
So, I was thinking and will figure out how to set up a Bitcoin over the radio if we have some trouble like that to maintain the exchange of goods on the ground to exchange food for Bitcoin or something. So, that was totally not what happened in the end because somehow we have good internet, we have electricity almost everywhere except the actual front line where there could be a power outage or the territories which are currently occupied by Russian They shut down the internet there to translate their propaganda.
My story ended up being totally different. I relocated on the third day to the safest place in Ukraine so I couldn’t help much with my hands. I couldn’t actually carry people or drive or do much physical help but I posted on Twitter to my Bitcoin followers that I would fundraise some and try to organize some logistics and delivery with the supply chains which got destroyed. Bitcoin went pretty well. We fundraised for Bitcoin over the first week and for the next couple of months, I’ve been spending Bitcoin, after the Bitcoin Magazine article about my work. So, we were slowly distributing that by driving medical supplies, buying them, driving food, and buying mattresses. So [crosstalk]…
[8:42] Alex: And Gleb, you told me that it changed because, in the first few days or hours after the invasion, things were legitimately collapsed in terms of the payments, financial infrastructure or just getting basic goods. But then maybe a few weeks later, things started to change and needs grew elsewhere. You’re basically telling me that in those first few days or weeks or whatever, it was very helpful to be able to use Bitcoin to make a payment to someone in Poland for a car that you needed to buy to bring stuff in, for example, right?
[9:17] Gleb: Well, yeah. There’s a lot of stuff. For the first couple of weeks, even the grocery stores were not working in the capital of Ukraine. Well, there was a shortage. There were 2 hours lines for food. So, we had to drive our own cars from Western Ukraine to the capital just to deliver some compressed food to be efficient. There are a lot of stories like that. Yes, we managed to pay for cars to do the delivery in Poland because all the cars in Ukraine were either already used or sent to the front and destroyed by the army. There are different ways I used Bitcoin to fundraise, to fund my way to help.
[10:09] Alex: Maybe you could help describe to the people here the little history of the currency of Ukraine, the hryvnia, and how it hasn’t been particularly stable over the last decade. It’s lost a lot of value. And when the war broke out, basically, the government told me that one of the reasons why Ukraine is a top-five country in the world in terms of Bitcoin and cryptocurrency adoption is because a lot of the big financial platforms didn’t make it to Ukraine or didn’t service Ukraine and basically doing any sort of international transfer commerce was always like a nightmare or difficult. So, the government told me that that was one of the reasons they noticed why things like Bitcoin became popular because people are just fed up with the system. I imagine that things only got much, much worse after the invasion, right?
[10:59] Gleb: Yeah. Well, in what is it? Eight years ago through the dictator, the currency collapsed 3 times, 3X down because they basically used all the gold reserves. When they were thrown out, the budget had less than 1 million dollars for 40 million country people, which is certainly not enough to maintain even a couple of days of… I don’t know. [inaudible]
[11:27] Alex: So, you’re saying just for the audience, in 2014…
[11:32] Gleb: Yeah.
[11:32] Alex: When Putin’s forces took Crimea, the hryvnia collapsed from some unit, some amount of hryvnia buying you a hundred dollars to all of a sudden only buying you $33. Like it, basically, devalued by 2/3, right? In a quick span.
[11:49] Gleb: Yeah, exactly.
[11:49] Alex: Right. So, imagine Americans and Europeans in the west of Ukraine haven’t really experienced that in a while, in a long time. So, that’s a very vivid recent memory from Ukrainians and I think helps explain why the country was so ready to explore digital alternatives. I guess we could put it that way. Also, it wasn’t as easy, I guess, from what I understand for you guys to make international payments and commerce and things like that as it would be for, let’s say, someone living in California to someone living in New York, right?
[12:09] Gleb: Yeah, totally. PayPal is something we’ve been waiting for, probably. I remember 10 years ago, my friend is trying to sell some handmade toys. She was making it to Americans and she couldn’t accept the payment because we cannot use PayPal. We can spend but we cannot receive. So, that was happening for 10 years and who knows why that never happened. Maybe, the Ukrainian regulation is hard. Maybe PayPal doesn’t trust us. Nobody really knew but people got to accept all those small payments.
[13:01] Alex: Well, the irony just to pause for a second is that a lot of the founding people who created companies like PayPal, whether it’s like Levchin or people who created apps like WhatsApp, Jan Koum, or whatever, Ukrainians have been so omnipresent and everywhere. Let’s say the broader world’s tech scene and the IT scene in Silicon Valley, they’ve been really outsized in their presence and really a global force. Yet none of this financial technology was or not a lot of it wasn’t connected. How do you explain that?
[13:35] Gleb: I would totally expect these guys, the Ukrainian bureaucracy, and Putin to do with them. I mean for the context, we were trying to bring Ikea to Ukraine for 5 years and they couldn’t because they would have to pay a bribe on every step, basically. Like you’re going to have a big building, you pay a bribe. Well, things were better, things were getting much better after the last 2 elections, for the last 8 years.
[14:07] Alex: So basically, it’s probably helpful to just do a very short recap. What we’re describing here is that there’s this legacy of corruption in this country which is a result of the last hundred years of history which was… I try to go into this in my essay but just horrific depredations on the people, insane famines, genocides occupations, and enslavement. We’re talking about millions of people moving this way, moving to that way, sent to Germany sent to Kazakhstan, killed, starved and this had a huge impact on the country from a perspective of leadership and entrepreneurialism, obviously.
It got so bad that in 1986 at the very end of the whole Soviet experiment, the world’s largest nuclear disaster happened in Ukraine and the people of Ukraine weren’t allowed to even know about it. They found out later after this radioactive cloud passed through Kyiv and all these things. A lot of this led to the downfall of the Soviet Union and Ukraine played a huge role in the downfall of the Soviet Union, actually. The Bravery of the people to stand up and choose Independence was one of the key things which led to the downfall of the whole thing. But unfortunately for Ukraine, the freedom that they got had major downfalls. When they became their own nation, they weren’t used to being their own nation economically and they went through an economic period in the ’90s that was worse than the United States Great Depression of the 1930s. Just as you looked at GDP, agricultural or industrial output, when you look at Ukraine from ’91 to ’97 or ’98 during that decade, Ukraine basically collapsed economically. The same way that the United States did in the 1930s. So much so that by the end of the 90s, half of Ukrainians didn’t have enough food to eat.
Then the people who dragged Ukraine out of this were very corrupt. I mean that they had steel. Two of the five largest steel plants in the world are in Ukraine. In fact, the largest one in the world is currently being occupied by Russians in Mariupol. They used heavy industry that was set up by the Soviets and they managed to generate an export economy that… It did move the economy forward. I mean, it wasn’t great but it was better than the 90s. The hryvnia had 2500% hyperinflation in the mid-1990s, just for context. So things improved but corruption remains hugely omnipresent.
Basically, the previous 3 leaders, well including Poroshenko but even just go before that, if you looked at the first post-Soviet leader, you looked at Yushchenko and Yanukovych and they all had massive corruption scandals. Yanukovych who was ousted in 2014 stole 70 billion dollars during his reign. All of this corruption just continues to be and bureaucratization just continues to be like the legacy of just decades of occupation and exploitation.
If you really look at it and obviously want to get Gleb’s thoughts on this, what the Soviets did is they stole all the natural resources of Ukraine and they use them for the rest of their empire. Basically, if you think about a country’s resources, like their savings account, the Soviets spent down a lot of the fossil fuels in Ukraine and they used them. You don’t get more of them. So those things are very valuable. They were used by the Soviets to do things elsewhere in the world. Fight in Afghanistan or whatever and they were stolen from the future of Ukraine, right? So it left the country much, much depleted but that explains partially the current economic fragile situation and the corruption and the reason why people might be interested in Bitcoin. I don’t know, Gleb, if you want to add any of your own perspective or personal experience to that backstory?
[18:17] Gleb: Oh, yeah. After the Soviet Union collapsed in 1991, nobody knew how to do democracy. There is actually quite a cool question of how to distribute the goods which used to be cooperative. Like the plants and the factories that caused a lot of corruption in 1991 where just the trickiest people are the most not trusted people. They started owning them and bought them from the government cheaply by bribing. We were trying to learn how to live, how to respect the Constitution, and how to have this government. Then people in Western Europe do…. but it was certainly not enough time and I would say, well, we started getting somehow satisfactory results 8 years ago. At the same time, people realized that we could use… I mean, the parallel system, the gray sector was huge all the time. It was never decreased. Probably half of our economy was gray. I mean, not paying taxes and all this stuff before the invasion. Given that, yes, you cannot use PayPal. You cannot buy stocks in Ukraine. You have to pay a lot of overhead to the broker.
[19:50] Alex: So basically, the economic system is just nowhere near where it is. In a place like America or Germany. Again, as a result of these decades of oppression and violence. There’s a saying about dictatorships. Like, if you think about civil society, local business, and commerce, you have to think about what grows in a desert, right? So what grows in a desert, which would be a dictatorship scorpion, right? So there’s a lot of crime and extremists and all kinds of things that grow under the boot of a dictator, right? So Ukraine had to come out of that. Now, they did have some things that have allowed them to thrive as much as they have thrived, which are interesting.
Number one that the history of constitutionalism. I didn’t know actually, what Americans probably don’t know is that Ukraine created a constitution that separated the executive, legislative, and judicial branches 70 years before the United States did. So 70 years before the declaration of independence and the Constitution, Ukrainians made their own which was quite dramatic. Then later, I think what’s interesting to reflect on also is at least for Western Ukraine, there’s this religion which obviously still is important but used to be way more important in people’s lives. There were actually elections in the church, in the western part of Ukraine. The way that church officials would be chosen was through elections and there was a little bit of a democratic process. This had gone back hundreds of years. Whereas on the Russian side, the Orthodox side, it’s not elections. It’s by decree. So, these two things are interesting. I’m not sure if you’ve ever thought about those, Gleb, or if you have a
comment on that before we move on.
[21:39] Gleb: Yeah. Yeah. Those are really good remarks. We usually just say we wrote the first Constitution. In general, yeah, I really liked what was happening here before the invasion. So it’s the combination of the government which tries to operate the country but cannot do much at the same time. It cannot take too much power and it is limited. It is limited in taxes, it is limited in the rules. Some are unspoken. This is an example always made when I was working out of the New York office. We could not bring a Christmas tree to the office because somebody was afraid that there will be a fire. So, we were not allowed and there will be fine.
In Ukraine, there’ll probably be similar bullshit that exists somewhere in the rules but not nobody enforces it. At the same time, there is this parallel system where there’s Bitcoin, there is this growth of restaurants, of bars, of businesses which operate in a… They can do more than what is usually allowed because of that gray understanding and the weaker government. I really liked how it worked. We were getting, yeah, a lot of stuff in bigger cities and smaller cities until the invasion. Yeah.
[23:09] [ads]
[25:08] Gleb: [crosstalk]
[25:08] Alex: Yeah. So you’re were telling me… Again, so to recap here if you’ve just tuned in with Gleb, Bitcoin developer, he’s in Ukraine right now. He’s been running Bitcoin humanitarian missions for the last few months. We’ve just gone through some of his backstory and some of the contexts for what’s happening. When it comes to you and other Ukrainian Bitcoiners, you mentioned that when the invasion happened you posted a link asking folks to support the Ukrainian cause and people were going after you saying you’re like a warmonger or whatever and I would just comment from what I saw that I think a lot of people were unable to separate in their mind what’s happening to Ukraine from maybe their own government’s global role. Just as an American obviously, I watched my government invade Iraq, obviously, which was a huge illegal invasion. I think there’s this tendency to believe that anything that America does if you grew up in that age and you’re questioning and you think it’s bad but you need to be able to disassociate that from people’s lived experience on the ground, in a place like Ukraine. So I’d like to hear Gleb talk a little bit about this. We spent a lot of time talking about it. I tried to summarize it in the article but just this idea that you can be a Libertarian even and you can sympathize and help someone defend themselves from being attacked. So do you want to talk a little bit about this, Gleb?
[26:40] Gleb: Yeah. I don’t know even where to start. I am very much with American Bitcoiners who don’t like the New York Times or whatever MSM or what it is called. I decided to not talk to New York Times after I had a bad experience of an interview with them where they twisted my words but I don’t think it’s a smart way to just claim that everything they post is bad. I’m totally fine if an American decides to spend their tax money on American hospitals instead of saving Ukraine. Well, I would prefer the latter but it’s an ethical question. I don’t question that but I cannot stand the Nazi Biolabs, whatever bullshit… I don’t remember what else. Do you want a warmongering thing because Ukrainian Army is heavily volunteer-based? Half of it is just people who never get proper training. They just learned through experience over the 8 years defending Ukraine and through, I don’t know, classes in their spare time. They were not equipped at the time of the invasion and I just thought it was good to help them. So I invest some of my money into equipping these volunteers.
If American spend a bit more time, they would probably find a Libertarian dream here where there is a lot of talks. I remember, or somebody, a big thinker said that he doesn’t want the government but when there was a Caribbean crisis, he said, “Okay, we need the government to handle the Soviet Union and to organize Army against it.
[28:43] Alex: [inaudible] The Cuban Missile Crisis.
[28:46] Gleb: Yeah. Yeah. Yeah.
[28:47] Alex: The point is, in my opinion, it’s dehumanizing to just comment on Ukraine as an American or whatever and say, “Oh, it’s a proxy war between my government and Russia and we should just ignore it or stay out of it or whatever.” That’s insanely dehumanizing of what’s actually happening to people. The average American is very, very, very minimally affected by what’s happening there. You could you can make an argument that what’s happening there has affected global supply chains and has increased inflation but then inflation was already going to happen. This is not like Putin’s inflation. This is inflation that was happening due to the monetary policy of large governments. So, generally speaking, the war is not really affecting Americans that much but it’s completely devastated Ukraine. I don’t know.
Maybe this is a good time, Gleb, just to… You’re from Kharkiv. Tell the people here what is happening in Kharkiv. Have buildings been blown up? Give us a sense of the scale of destruction of the place that you’re from.
[29:52] Gleb: I think it would’ve been enough to say that probably not a single person I know stays there except a couple of old, really old relatives who cannot move out there and I don’t know, maybe 10% of my friends said they’re there to help on the ground to deliver food to those old people or to help armies somehow. Yeah, so not a single person remains there to live a normal life. Yeah, everybody is traumatized. I don’t have any direct friends who died but there is a bunch of friends or her friends. It is impossible to live there now. We get pretty good news from there.
We’re pushing the Russians back in that particular region. So people slowly start talking about coming back towards the fall where they accept the risk of a missile but at least not constantly over a day.
[30:53] Alex: How many people is in Kharkiv before the war?
[30:56] Gleb: About 2 million.
[30:58] Alex: Two million. Okay. So you could think of a large city like Boston or Austin, Texas, or something like that. Now imagine everybody leaving because it was getting… Basically, the ship bombed out of it in and its infrastructure is completely destroyed, with dead bodies on the streets, etc, etc. Then maybe the war changes as Gleb is saying. Maybe the Ukrainians hold it. Okay, but then what? Then you have to rebuild from the rubble, from zero. You have to basically rebuild a whole city. So that’s like the optimistic case for a lot of people like Gleb. The negative case is, of course, Russia takes it and either becomes a new DMZ Zone as you have in Korea, where you have decades of it as just a war zone and no one really lives there. The city is deleted. Or it becomes Putinized and occupied and all the local cultures destroyed. So those would be the worst-case outcomes. But even the best-case outcome for a city, like Kharkiv of 2 million people in just a very, very difficult decade ahead.
So, I think that what happened is that a lot of people just haven’t… It’s weird. I think that they don’t believe anything they read in the media. So, therefore, they somehow think that’s the worst fake or something. This is just insane. I think we need to work on our sense-making. You need to understand that there are other ways to find out what’s happening in Ukraine. You can follow independent journalists. You can join Telegram groups. You can do an open-source investigation. I mean, you can see it yourself and you could just see the destruction by satellite imagery. So you don’t need to trust anybody in particular. You can start to build your own sense of what’s happening. What’s very clear is none of us know the reasons why.
Obviously, the Russian forces tried to take Kyiv, but they lost. They lost the battle of Kyiv. They got pushed back and now they’re trying to take the East and the South, which they might take and which would give them enormous natural resources. It’s important to point out that it is just in the Donbas region in the East and in the South, you have enough coal, and iron and you have steel. You have a huge amount of commodity construction and commodity export infrastructure that Putin wants because as we all know this decade is going to be a decade where fiat money is going to lose value and commodities are going to become more valuable in relative terms.
So obviously Putin wants the machinery of Ukraine for his plans. Maybe you could argue that taking Kyiv was faint. In the end, they only really wanted the east and south. It’s a bit of a stretch but the point is he could still be successful from a military point of view in the East and the South, especially if somehow he can take Odessa. I don’t know if it’s likely but he certainly wants to. There’s all kinds of noise, Gleb, coming from Moldova, all these separatists. It’s clear that he’d like to take Odessa. It’s just not clear that he will take it. I think, in your mind, Gleb, are you preparing? Basically, what do you realize? When you talk to yourself, how do you feel this war is going to grind into a stalemate? Do you think that the Russian forces will be in control of most of the East and South? What’s your sense right?
[34:31] Gleb: I’m a really bad person to ask because I’m always very optimistic. I always think for one month this is over. It’s clear that the Ukrainian people will not accept any middle ground at this point but we’re not sure about Crimea but it’s certainly, everybody is up to taking in the territories before this invasion in February. At least regain and that control is the goal. We would not allow the government to accept some weaker decisions but at least that’s the way it feels now. So I’m just saying it’s really unfortunate that Americans between us don’t see it. The way the army works here at the moment feels like a Libertarian dream because you got to have worse and then it just volunteers to defend their land. I’m telling half of them had not 2 weeks of training before the invasion.
[35:30] Alex: What’s your reaction to the idea that this war is NATO’s fault and not Putin’s? How do you react to something like that?
[35:40] Gleb: Well, I like when Trump said or Ted Cruz, that this is NATO’s fault because NATO should have helped Ukrainian advance so that Putin doesn’t attack that. In that way, I can see the point. Well, and generally speaking, I think Russia is trying to occupy Ukraine in one or another way. It’s a problem. It was happening before the U.S. even existed. So it’s a really long story and it’s really stupid that America Centric thinks that this is somehow related to the current administrator, distracting us from the vaccine or something like that or from the inflation.
[36:31] Alex: Well, basically, as Americans or Western Europeans, we shouldn’t impose our own history and designs and own issues with our own governments on Ukraine. Basically, Russia, as you reminded me, as history unfolded, the Russian empire was trying to conquer Ukraine before the United States existed. So this is not a new thing. Again, if you just look at history, it’s really obvious but at the end of the day, this is an independent nation that even… When the Soviet Union collapsed, it’s important to point out that yes, of course, in Western Ukraine, 99% of people voted for independence. But even in Donetsk and Donbas, 80% or 90%, and even in Crimea more than half of the people wanted to become independent.
This is an independent nation with a long history of being independent and regardless of what Americans think about their government, this thing is going to happen. So now it’s just a struggle of what exactly do we do and how can we help? I guess for you, Gleb, when you look at let’s say people who just ethically don’t want to be involved in the war, right? Maybe I can respect that, of course. So some of them wanted to help you though when you are doing aid. Literally just giving meals to people, giving them a bed to sleep in and these things. So you raised more than $100,000 worth of Bitcoin for this. Can you tell us the specifics of some of the things that you’ve been doing there through Bitcoin which otherwise would have been impossible? It’s not they could have wired you, done a bank wire to you. So, how did Bitcoin make it possible at least from the humanitarian side of things? At least in your work in the last couple of months.
[38:32] Gleb: Yeah. So, while I was talking on Twitter about them accusing me of being a warmonger, I decided to fundraise specifically for humanitarian so that I just get more help into the country. The first missions on the first and second week were just really basic stuff. There was a food shortage in certain places and I got to pay one person to buy something and drive from one city to another because the other city was cut short on basic food. We funded the medical laboratory in Western Ukraine for some health care stuff and I bought several trucks of mattresses for the displaced people to sleep on because when they lost their homes and were driven to the capital or to safer cities, they have nowhere to sleep. They tried to organize public schools but that was not sufficient. Yeah, basically 20 missions of that kind from $1,000 to $10,000 was what I wanted to try to focus on and cover the spots for larger funds.
Well, for the first couple of weeks, they were not here. Stuff like Red Cross was just not available. Later on, they couldn’t cover the smaller tasks. I just try to cover those where I can be more efficient than that.
[40:12] CK: You were telling me…
[40:14] Alex: We’ll just do a couple more topics and then, CK, we can open it up for questions here because I think we’ll have a hard stop in 20 minutes.
So 3 more things I wanted to cover. Can you just talk to us a little bit about things like Alice-Bob, which is a telegram front end for Bitcoin trading? A lot of people might have a hard time understanding how Bitcoin could work in Ukraine today and from what you’re telling me, not only does it work, but it’s actually really easy. There’s a lot of liquidity and you don’t have to use KYC and you can basically trade pretty freely between Fiat and Bitcoin. So can you talk to us a little bit about the tools that you use as well as this restriction that the Ukrainian government recently announced where it would try to restrict people from large purchases of Bitcoin and cryptocurrency? Can you talk a little bit about these two topics for us?
[41:06] Alex: Yeah. In Ukraine, you have this concept of peer- to peer transfers in the banking system. It’s like Venmo or a Cash App but at the protocol level. So the banking system just supports that. You can send, what is it? One thousand dollars or $500 in one transaction without many checks. Nobody cares about that. The text agencies won’t go after you. That’s how a lot of merchants operate here. If you, run a small business, if you sell board games or something, you just gotta use that to accept payments and minimize your taxes for example.
So that’s really how a lot of small Bitcoin exchange operates and the bigger ones, too. You use these peer-to-peer transfers to deposit and withdraw. That always works. That was pretty cool, I would say. People in the US are much more afraid of doing this stuff somehow.
[42:10] Alex: It shows how easy it is. you’re saying you just pop into Telegram and you just load up this app. How exactly would you…? Let’s say I sent you a thousand dollars of Bitcoin right now, Gleb, over the lightning network and you had it in less than a minute, right? How would you sell it into local currency? What would be your method of choice right now?
[42:31] Gleb: Well, lightning is still not that popular here. I got to think a bit more about that. I think you can send…[crosstalk]
[42:37] Alex: Well, so meaning I sent you Bitcoin.
[42:40] Gleb: Mm-hmm.
[42:40] Alex: Let’s just say. Let’s say I sent you a Bitcoin.
[42:41] Gleb: Yeah. Yeah, yeah. That would work. I will transfer it to the wallet inside the Telegram bot and exchange it and just send it to my card right away and that would take seconds. That’s superfast.
[42:55] Alex: Right, and it doesn’t require KYC, right? You don’t need to [crosstalk]…
[42:59] Gleb: Yeah, exactly. There is a lot of liquidity because people want to buy Bitcoin so when I sell it, they even give me a positive rate. They’ve taken the Binance exchange rate and they give me more than the Market because there is so much demand for Bitcoin here.
[43:17] Alex: Wow.
[43:19] Gleb: Yeah.
[43:19] Alex: So you helped CNBC the other day, sent 20 bucks from Miami to a Ukrainian refugee living in Poland who is able to easily withdraw from a Bitcoin ATM. As a refugee technology, what are your thoughts on Bitcoin? You told me that you need to rethink your security practices that may be Bitcoiners are like, “Oh, I can just have my multisig distributed into buildings.” But what if those buildings get blown up by rockets? Wasn’t it necessarily something that you had in your security plan? But in general, what do you make of it as a refugee technology or as a way for people to be able to bring their savings with them when things go badly?
[44:06] Gleb: Well, I think I can certainly speak for the trouble bringing any money out of the country. It is really hard to buy euros here from time to time. Either it is too expensive like the exchange rate or they just say, “We don’t have it.” Because the National Bank enforces the exchange rate making it just inefficient for currency exchange companies to operate. So from time to time, it’s hard to get euros and get out of the country.
I would say Bitcoin and these peer-to-peer transactions give you a good tool to bring something out of Ukraine. Then you go and get it out of the ATM in Poland. It’s also super simple. That’s what we did with the CNBC group. Probably, you can tell me how would it be much harder for you as a humanitarian [crosstalk]…
[45:07] Alex: Well, I mentioned it. Yeah, my organization has a mission in Ukraine that we’ve been orchestrating since the war started. I just remember a couple of weeks ago, we had to get money in on a Friday night to someone in Poland to buy a bunch of satellite phones to take them into Ukraine. I think the group was in Ukraine and then they had people in Poland who would help them or whatever. But it was basically even though we were operating and trying to send money to someone in Poland, it’s not like you can just wire the money right away on a Friday night or whatever.
In the traditional system, we would have had to wait days but like, boom. We sent the Bitcoin, they bought the stuff, and the phones were in Ukraine by Sunday morning. Just as a humanitarian tool and obviously better. If you listen to the Head of Kuna Exchange which you obviously worked at, Gleb, years ago and you listen to the government of Ukraine, they will also tell you this, that in a time of war, cash is not necessarily helpful because it can’t teleport and the local currencies being propped up and obviously as you described has lost a lot of value, a lot more value than Bitcoin is lost in the last few weeks let’s put it that way. It’s just really, really helpful as a tool.
[46:22] [ads]
[47:15]: Alex: So two more things quickly. A couple of days before the invasion, you announced your latest basically proposal for the Bitcoin, the coin pool. Do you just want to briefly talk about how much of your time are you still thinking about Bitcoin development? What was it like to release something for Bitcoin and a few hours later, essentially, your country gets invaded?
[47:40] Gleb: Well, I posted it the other day. It works, it helps me to stay sane and just think about Bitcoin and how I can contribute and there is this really interesting discussion on bringing covenants, and protocols to Bitcoin that is going on. So I was just happy that they can participate and probably some of my unpublished work at the time. Yeah, it’s good to have this opportunity to get back to work while somebody is defending you on the other side of the country. I tried to balance the humanitarian and helping the Army and do some work, too.
[48:19] Alex: Yeah. It’s interesting. Two other very prominent Ukrainian developers. One is the guy who created a simple Bitcoin wallet, right? He joined the militia, right? We don’t know where he is. Is he still around? Did he die? Is he alive? Do we know? Any update on that?
[48:36] Gleb: He is undercover.
[48:39] Alex: Yeah.
[48:39] Gleb: So before you post it, I think not many people knew that he is Ukrainian. I think he says undercover but if he died, we would know. So I hope he’s okay.
[48:49] Alex: The other one is a Russian who’s in Moscow who helped design LNURL, right? He wrote a personal blog recently that he was arrested in Moscow for protesting against the war. We don’t have an update from him recently. Who knows? But look, Gleb’s not the only major, major contributor to the Bitcoin project that’s been obviously affected.
The last thing before we just open it up. I just have to ask you. It’s so insane and unimaginable what the Russian army has done in Ukraine. If things like what we saw obviously, out of Bucha, we’re seeing in Mariupol, etc. How do you process that? The things that we read about in history books that they’re not [inaudible] basically are being committed in your country today by the Russians. How do you process that? How do you move forward how do you do your daily routine when you understand that that’s happening not far from you?
[49:57] Gleb: I don’t know what to say. It’s very weird. It’s been like that. Russia invaded Ukraine 8 years ago. We were first stressed and then we just got used to it. Kharkiv where I live safely for over 8 years. The Russian army was like… Well, Russia is 40 kilometers away from my hometown where I lived even after the first invasion 8 years ago. So you just get used to it. This time, yeah, I don’t know. You just learn. I think we’ll take years to recover mentally but you cannot explain it in words.
[50:34] Alex: If the Ukrainian government enforces and managed to keep Putin out and limit his advances, that’s where the stalemate is.
[50:47] Alex: What lessons do Ukrainians take from this? In terms of what to expect from the international community or what not to expect? What lessons do you take for your own personal life and what your career is going to be moving forward now that you’ve seen how the world reacted to this invasion?
[51:06] Gleb: I think Ukrainians are very united now. We don’t really rely on anyone but ourselves so we got to build up the Army in whatever way. I’m gonna probably find some military battalion, like a [inaudible], sending money to them instead of taxes. A lot of Ukrainians gotta use that. I would probably go to the training on my own to just be prepared. We got to build up the economy, too. I probably going to stay around and try to help local businesses or build something on my own. Yeah, there are a lot of plans. Or basically depending on ourselves [crosstalk]…
[51:49] Alex: Yeah. You were just saying that everybody that you know from your old Bitcoin meetups or whatever is doing humanitarian work and you expect that to just be the case for a long, long time. Right? As a country rebuilds, it can take obviously years if not decades. So you’re expecting this to be a part of your life, right? Moving forward?
[52:16] Gleb: Again, I think it’s a bit for in our dream, there is a drive in the market of organizations that accept donations and they are more efficient than the government, the same with the military. So, you just got to build this system where you get a see where to bring your money instead of giving it to the government and expect everything to grow much more efficiently and just fine.
[52:42] Alex: Awesome. All right. So we have like some time here for questions. CK, do you want to do that or what?
[52:48] CK: Yeah, I threw out a bunch of invites, note-taker so far but if anyone wants to come up and ask Gleb any questions, please request and we’ll do some bending and try to get you up. We are going to be closing out in about 8 minutes. I need to get on Bitcoin Magazine live to do an interview there with [inaudible] in there. So that’s coming up on YouTube. But yeah, if anyone wants to come up, ask Gleb a question, ask about what it’s like on the ground, please do. Until then I’m happy to jump in with a question or Alex maybe have more [crosstalk]…
[53:24] Alex: Yeah.
[53:25] CK: I’ll let you ask a few and then please raise your hand if you want to ask Gleb something. Well, I’d love to hear your take on the hook just to move to Bitcoin for a second. What’s your whole take on BIP 119 and on the whole covenant debate? Can you give us your perspective on what’s happening?
[53:43] Gleb: I think Jeremy’s in the room. I think, yeah. Hey Jeremy. I’ve been working on something related to… Well, the coin pool is very related to covenants. It’s my contribution to exploring in breadth. It’s something much requested by some members of the community and well, discussing this topic. I hope that helps to understand something. I’m currently investing my time in comparing it to other protocols at least for myself first so that they can publish an informed opinion. It’s a really interesting topic in Bitcoin decision-making, too. But for now, I’m focusing on the technical aspect and trying to make up my mind, on what’s the move forward with. I will publish something soon. I hope.
[54:33] Alex: Okay. That’s great. CK, do you want to? You should get in there?
[54:38] CK: We actually have someone up on stage.
[54:41] Alex: Oh, great.
[54:42] CK: Yeah. I’m sorry, I cannot pronounce your first name. So I just give you the mike.
[54:47] Lyudmyla Kozlovska: Thank you so much. My name is Lyudmyla, I’m from Ukraine. Actually, I came from occupied Crimea and we as an organization of and Alec Foundation deliver support for Ukrainians. We collected more than $4 million to support actually. Not only civilians but also defenders, and militaries in Ukraine. I want to say that for us, grip towards actually saving Heaven because we were not able to operate and deliver this help without Bitcoin or other coins and we need to work more closely with politicians and with banks especially in Europe because it’s a huge challenge, especially for end-users to be registered on exchanges to be able to operate. To get, for example, if you have donations in cash or in we get donations through transfers then SWIFT, let’s say exchange them in crypto and send them somewhere to pay and back. It’s a huge challenge.
So as NGO, we would be happy to cooperate. We work closely with national parliaments in the EU. I think we need to work more on this issue to be more effective to use crypto for saving lives and for human rights. Thank you so much for all you’re doing.
[56:02] Alex: What’s your perspective on… When you go to your European partners and you say, “Hey Bitcoin or stable coins or whatever is an option. What do they say to you? Do they understand? Are they hesitant? Do they get that it’s sometimes the best way to do it?
[56:24] Lyudmyla: The biggest problem that today Bitcoin and actually cryptocurrency associates with Russian oligarchs or someone who wants to escape personal sanctions and of course exchanges, which step forward to block this kind of person helped a lot to, one is this kind of image but what we need to do is to explain on a concrete example why politicians should learn what it is crypto? Why it’s a very useful tool? Why it can save lives and why is it pro-human rights? It’s not just for gangsters.
In this situation, we need to just work more with politicians. We are happy to cooperate in this matter with everyone who is open to this kind of cooperation. Especially in the matter that European Parliament just recently adopted a resolution, special reports which are quite critical and negative that could have an impact on the crypto community in Europe. You know also with lobbying of the banking system which is absolutely against crypto. In some countries, you just can be close to the account if you use crypto. If you, for example, send money from… No. Some exchanges to your bank account. You can just debank afterward. So we need to speak about it publicly. We need to work with politicians about it.
[57:44] Alex: What, from your perspective… When you watch the American and European media and Central Bankers saying that Bitcoin is stupid or evil or useless. Why do you think they think that? How is that even possible given what you’ve seen? Is it just [crosstalk]…
[58:15] Lyudmyla: It’s just because we don’t know. There are no positive examples of people who are around them, who use crypto for some good, prominent activities. It was quite good. Let’s say PR or let’s say approach when there was an action between Belarus Opposition Civil Society which used quite extensively crypto to, again, as a safe haven to oppose Lukashenko regime and actually to build a community to be able to save people who are politically persecuted and banned accounts in Belarus, but then it stops. Then again, it was more cessation with some quite creepy personalities. So, of course, it should be balanced. Our world is not white and black but we need to work more to use it as a tool because it’s really a very effective tool but at the same time, it’s so much about learning, meeting, and explaining how to use it properly and why it’s not only for gangsters or some kind of…[crosstalk]
[59:10] Alex: Thank you. Awesome. Well, thank you for that. That’s very, very helpful. Gleb, do you just want to say the last word here and then CK?
[59:17] CK: Yeah. I think I can go for 5 more minutes, we have Olga on stage. Olga, do you wanna ask a question or ask a conversation?
[59:23] Alex: Oh, perfect. Thanks.
[59:25] Olga: Yeah. Hi guys. It’s my first time here. I have been part of one of the Bitcoin supporting and Ukraine supporting initiatives. It’s all going underneath the LNP/BP Standards Association and our focus has been on some… Like we have been trying to find the middle ground between supporting the military stuff and the humanitarian stuff because military stuff is indeed heavily regulated. This is why it’s extremely hard to support Ukrainians using military stuff. Even like plates or something like that. On the other hand, people need gas, for example. People need cars which are again extremely regulated. Mattresses, food, and other stuff are very hard as Gleb knows from his own experience. It’s extremely hard to get but it’s still possible to get.
So, what we have been focusing on is communication because my whole family, for example, comes from Mariupol, and it has been one of the worst places over the past many, many years. [inaudible] out the work. When everything started, we have been focusing on providing the communication infrastructure for that. Starlinks, mesh networks, and all that. Because even if you have mattresses, even if you have food, yes, you can survive for a couple of days. But if you do not have any communication, especially if this communication is secure, if it’s private, and if your enemy cannot track it, this is the core. It’s one of the cores that you need to hold on to. So this is what we have been doing.
Regarding what Lyudmyla said. Yes, of course, many people think that Bitcoin is just about money and no one thinks about it as a protocol. As a protocol of communication, as a protocol of receiving and sending the data. I think that this is one of the problems here. No one thinks about that. We have been using Bitcoin and the Lightning Network as a protocol to communicate, send, and receive information.
I think probably unlike [inaudible] I think that actually starting to talk with the regulators about this, it is a downfall and is a very wrong choice to make because Ukraine as a whole has been one of the first flags. One of the first countries that have been driving Bitcoin adoption throughout all these years. Since 2000, at least 13, and right now,
the more you’re talking with regulations, the more you’re talking with the regulators, the more restrictions you get. In times of war, it actually does not benefit you much but it can actually reduce your power. It can reduce your possibilities, and it can reduce any ways that you can help normal people and regular people. The more you talk to regulators, the more regulations they will impose on you, and thus the less help you can actually provide to those people.
I know it’s a very unpopular opinion but it [crosstalk]…
[62:55] CK: No, I think it’s a very popular opinion for people in this room at least. I think that’s very valid. Thank you both for sharing your very…[crosstalk]
[63:05] Gleb: Yeah. I mean…
[63:06] CK: Yes, go ahead. Yeah.
[63:07] Gleb: Their initiative is really good. Well, I don’t know many details. I was like it covered by Bitcoin Magazine or something if that’s possible. Because probably every other day, I tell how it’s a miracle that the internet still works here and in Mariupol and in other places. They can communicate with the outer world. It’s very impressive and a big part of the… I’m glad that they did a more creative approach than me just buying food for displaced people in the early times.
[63:42] Olga: Yeah. Sorry for interrupting, I saw one of the flaws when my rifle actually got caught. I understood that. Yes, there were you and some other initiatives that were trying to provide some human train to help like food, shelter, or anything to Mariupol but I understand one of the flaws because people were not able to communicate because one of the main communication stations were destroyed. This is why we basically raised more than 100,000 in Bitcoin of course, in order to support this, in order to support the communication field, of the whole war resistance. We understood that we need guys like you to communicate with people in Mariupol, Kharkiv, Kyiv, and everywhere around the train but you needed to communicate with those people that are in need right now. So we saw this opportunity and we saw this problem and we are still trying to cover that thing in order to provide some kind of bridge between your help and those that are in need because otherwise, there would be some black box and you would not be able to reach the people that are in need right now.
[64:57] Gleb: Thank you. Yeah, I’m very glad you’re doing that. Thank you. With the politics stuff, well, I’m glad Olga is here. I’m a bit less critical. I’m glad that somebody tries to talk to them and maybe distracts them or wastes their time. Well, I’m just trying to contribute to a parallel system where I don’t have to ask permission to use Bitcoin here.
I don’t want to involve in politics. I think Libertarian parties are stupid. I think we should build a parallel system where we don’t have to communicate with them. While it’s not possible, maybe we could use some advocacy. I don’t know. I think it’s a harder topic but I just invite everybody to the project, trying to build a parallel system.
[65:42] Alex: Awesome.
[65:43] CK: All right.
[65:43] Alex: Well, I think that’s a great way to close. Thank you so much, Gleb. Thank you, CK for hosting. You all can check out my article, “Currency of Last Resort.” If you want to reach out and support one of these groups, there are 3 people here on stage who are doing amazing work. So thanks. Thanks again.
[66:00] CK: Yup, Please follow all 3 of these, follow Gleb, and check out all of what they’re doing. This recording will be on Twitter as well as posted to Bitcoin Spaces Live and on Bitcoin Magazines. YouTube will also be transcribing it. So get all of that on Bitcoin Magazine. Thank you to Alex for the time and for organizing this. Thank you, Gleb for answering all of our questions. Read Alex’s article and be well. Thanks. Bye.
[66:33] Gleb: See everybody. Thank you.
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