The dust is yet to settle on the recent, often violent protests in Ukraine that began last November and saw at least 82 people killed and hundreds injured, many seriously. President Viktor Yanukovych was removed from office and has gone into hiding.
On the ground in the capital, Kiev, particularly around the protests’ focal point, the central square known as Maidan Nezalezhnosti or simply ‘Maidan’, there are thousands of people volunteering to deal with the aftermath as winter drags on.
Field surgeries and hospitals treat the wounded, kitchens feed the crowds, blankets and clothing are distributed to those who need them, and people with vehicles shuttle everything around.
Not only is this a major logistical and people-management feat to co-ordinate, but it must all be paid for somehow. So, expatriate Ukrainians around the world have joined the fight to campaign and raise funds to assist the struggle back home.
Sending the funds home is another matter. PayPal only allows money to be sent out of Ukraine, while international bank transfers can take days to complete. Much of the time, transfers happen through friends and trust networks.
This week sees a new campaign to raise funds directly via bitcoin. Photos are beginning to appear online with protestors holding up QR code signs, as part of a co-ordinated effort to collect donations from anywhere in the world, in any amount, in an instant.
On the ground (and the Web)
Organizing the campaign at the Kiev end is Nastasia Pustova, part of a network of 900 volunteers. Having worked as a manager in the advertising industry for 10 years and more recently as a strategist, she knows all about social media marketing and image management, as well as dealing with tough deadlines and team management.
She recently – “and by accident”, she says – provoked the creation of an activist group on Facebook that collected donations for the protestors and supporters, and now spends 12 to 16 hours a day at the keyboard co-ordinating her team.
Jake Smith, a bitcoin entrepreneur, now based in Beijing, contacted Pustova after seeing a posting on Listserve about the situation, to see if she would be interested in building bitcoin into the campaign.
“I’d heard a lot about bitcoin – many of my friends are geeky guys working abroad. Bitcoin was often joked about, but I didn’t get into much detail until Jake contacted me,” she said.
Does she think bitcoin could be useful as a day-to-day tool for transactions between locals as well as to remit money from overseas?
”The way I see it, the main obstacle for bitcoin here is that it’s only possible to use online currencies and e-money (such as bitcoin and PayPal) for online purchases outside Ukraine. So the problem here is not in technical infrastructure, but in the legal and financial one.”
The majority of Ukrainians prefer to do their social networing via Russia-based social network Vkontakte, with Facebook as a secondary option.
Pustova says her statistics revealed Internet penetration for over 14-year-olds in Ukraine is 42%, with about 17.2m people being regular users. Fourteen per cent of its 44.6m population have smartphones.
These figures will probably increase, she says, “because gadgets are getting cheaper, as well as mobile Internet, and they become affordable to more and more people”.
The expat connection
Assisting Pustova from the Czech Republic is Viktor Kiyashko, one of those Ukrainian expats living abroad and helping collect funds and channel them to local coordinators.
Working as an IT Manager for DHL Information Services in Prague, Kiyashko says he has transferred the equivalent of over $15,000 so far, sometimes needing to convert currencies multiple times and using his own money to pay a fee for each one.
“At the beginning via PayPal it was around 7-8%, as I was doing four conversions. Now it’s less, as I do it via friends who give their money now and will wait for me to give it back to them later,” he said.
”The benefit I have is living in the EU, where banking and financial systems are a bit more advanced than in Ukraine. [Since the downfall of Yanukovych] it’s better, as there’s no such hurry, but still people need help and can’t wait for official banking transfer dates, which can take weeks.”
The fees themselves don’t bother him so much: “If you have wounded people, and need money now, the same day, you don’t care about that.”
To get around the financial system’s roadblocks, he has been using a kind of hawala system, holding the funds himself and promising to pay friends in Ukraine back at a future date.
Kiyashko said he wasn’t familiar with bitcoin until Jake Smith explained it to him as well.
Bitcoins to hryvnia
There is still one more problem: Since there is no widespread local bitcoin community yet, once the bitcoins are in Ukrainian hands they need to be converted back into the local currency, hryvnia.
The only bitcoin exchange readily available to Ukrainians in their home country is BTC-e, and the remaining option is to use local face-to-face traders, such as those using LocalBitcoins.
“There’s no Ukrainian e-commerce or other service working with bitcoin,” Pustova said.
Ukraine resident Roman Skaskiw, an American who lives and runs a bitcoin group in the city of Lviv, says the revolution will mean people are looking for new ideas. That, and a 20% plunge in the hryvnia’s value over the past couple of days could raise interest in alternatives.
“The biggest obstacle is a paucity of local businesses accepting bitcoin. I’m trying to change that too. But for now, most people see difficulty in changing it into cash and grow sceptical,” he said.
Culture shift
Unfortunately, there may also be issues with government regulation. Just a couple of weeks ago, the National Bank of Ukraine issued one of those ‘central bank warnings’ about bitcoin risks and indicated local bitcoin businesses must register with local financial regulatory agencies.
Neighbouring Russia has recently banned bitcoin use altogether.
That said, financial regulations are unlikely to be a priority in the chaos of Ukraine’s current political environment. Police and security forces are widely mistrusted following the brutal violence they meted out to protestors over the past few months, and exactly who the authorities even are at this stage remains unknown.
An interim government is being set up this week, with prominent activists likely to be in the new cabinet.
The revolution continues, in many ways.
Protestors images via Olga Kami