The very concept of digital currency implies the absence of a central regulatory authority. The production of virtual money(mining) and its movement cannot be controlled by any state. This situation has led to the fact that different countries introduce their own legal frameworks to regulate the digital asset market. For example, it is possible to earn cryptocurrency in Belarus quite legally for both legal entities and individuals. It is allowed to engage in mining, trading on crypto exchanges and conduct any financial transactions. At the same time, in China, as of December 2021, the storage, use and mining of cryptocurrency is prohibited by law. The country has even blocked services that provide up-to-date information on the rates of virtual currencies. It is true that the digital yuan (e-CNY) is circulating in China.
Peculiarities of cryptocurrency regulation in Belarus
The decision on the legal regulation of all actions with virtual assets was made back in 2017. The main document that determined the legal status of cryptocurrency was Decree No. 8 of the President of the Republic of Belarus “On the development of the digital economy”. Belarus is one of the first states that prescribed the concepts of “token” and “coin” in its laws.
For example, in the USA there is no ban on transactions with virtual currency. But the concept of token is not clearly defined. The Securities and Exchange Commission (SEC) classifies cryptocurrency as a stock, while the Futures Trading Commission (CFTC) classifies it as a commodity.
After the Decree entered into force in the RB, the following gained legitimacy:
- Cryptocurrency exchanges.
- Digital coin exchange operators.
- Formulations of “blockchain” and “smart contract”.
- All types of operations with crypto coins (mining, purchase, storage in accounts, bequest, etc.).
Belarus was the first country to legislate smart contracts, thus solving the issue of legal regulation.
In order to create a favorable atmosphere for the development of the crypto industry in the country, individuals and legal entities working with digital currency were exempted from income tax and VAT until January 1, 2023.
Gruvedrift
Mining cryptocurrency through the computation of complex mathematical problems is the basis of many digital assets. Miners generate new distributed ledger blocks and validate transactions. By doing so, they maintain the vitality and security of the entire blockchain ecosystem. Miners are rewarded for their actions. Its value depends on the total computing power of the equipment used in mining.
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Cryptocurrency mining is developing in the following directions:
- Mining on video cards.
- The use of ASICs.
- Cloud mining.
- Extraction of coins using a smartphone.
Each option has its pros and cons. Using a home computer or cell phone does not imply large investments, but the profit will be minimal. The use of an integrated circuit, specialized for a particular task (ASIC), will require a decent budget. In the case of organizing a “farm”, you will have to take into account the cost of electricity (the main item of expenditure), renting a room, cooling the equipment and paying the staff.
It is possible to earn cryptocurrency in Belarus with the help of mining, but there is a limiting factor – the cost of electricity. In December 2021, the average price of 1kV/h was approximately $0.08, while the optimal option is considered to cost $0.02 per kV/h.
In April 2019, President Lukashenko proposed to use “extra” electricity from the nuclear power plant in Grodno region to mine cryptocurrency. For this purpose, it was supposed to build several mining farms. Land plots for them were even reserved. But after 2.5 years, it is clear that the project did not develop.
Trading
Trading operations with digital assets on the stock exchange for Belarusians has its own advantages. If we ignore the risks associated with the volatility of virtual currency and possible hacker attacks (these points are the same for any country), Belarus has created very good conditions for trading. This is due to the effect of the Decree “On the Development of the Digital Economy”, according to which the profit made on trading (or staking) cryptocurrency is not only not taxed, it does not even need to be declared.
When registering large purchases or transactions (apartment, car, land plot), the tax service may still request supporting documents. But such a requirement does not present any difficulties. If the trader conducted his operations on one of the legal Belarusian stock exchanges, they issue the necessary certificate at the first request. If a foreign platform was used, then it is necessary to provide a notarized document, which confirms the history of operations on the public identifier.
The listed actions are a mere formality. If all documents are available, there is no need to pay tax.
As an example – in Russia, the profit tax on cryptocurrency transactions is 13-15% for individuals and 20% for legal entities.
Investments
In 2021, bitcoin and some of the alternative coins show a stable growth of the rate. This has led people to trust blockchain projects more and consider cryptocurrency as a tool for long-term investments.
It is easiest to buy cryptocurrency in Belarus through exchanges. Moreover, preference is given to trading platforms rather than wallets or exchangers. This is due to the fact that the commissions for depositing fiat money on the exchange wallet are less, and the security of investments is higher.
The best conditions for investing with cryptocurrency were received by individuals. But such benefits are available only to Belarusians (you can’t come to the country on a visa, earn money on digital currencies and not pay taxes).
For legal entities, the situation is a bit different. Companies can use for financial operations only those platforms that are registered in Belarus as operators and organizers of ICOs. To obtain such a status, it is necessary to be a resident of the High Technology Park (HTP). This means that a firm cannot purchase cryptocurrency and place it on an unregulated exchange like Binance or KuCoin.
As an example. The investment platform Finstore (HTP resident, part of the holding company Bank BelVEB OJSC) issued tokens for Belsept ALC. This is a Belarusian developer and manufacturer of disinfectants, sterilizers and detergents.
Cryptocurrency exchanges to earn money
As of December 2021, it is possible to earn cryptocurrency in Belarus on four cryptocurrency exchanges:
- Currency – the first regulated platform where you can trade digital currency and tokenized assets (stocks, commodities, bonds, etc.).
- Free2ex – an exchange designed for professional traders. It cooperates with major crypto platforms (Kraken, Poloniex, Cex.io) and has an insurance fund to protect the assets of its users.
- IEX – the platform offers services for internal transfers (no commission), trading operations with cryptocurrency and its own multi-currency wallet. The guarantee of safety and honesty of the exchange’s activity is an annual financial audit by the “Big Four” companies.
- Bynex is the youngest exchange in Belarus, opened in 2021. So far, only one pair is available for trading – BTC and ETH. The advantage is low commissions.
Earn without investment
It is possible to earn bitcoins in Belarus without initial capital. The cryptocurrency industry is experiencing a great rise. The hype around this topic attracts a lot of people. At the same time, most of them are very poorly versed in blockchain technologies and are afraid to invest their money in virtual assets. To understand the inner workings of trading on exchanges, staking or investing in cryptocurrency, you need to have some coins (not necessarily a lot). In this case, services that give you the opportunity to get tokens for free or for nominal actions can help.
Cranes
This is the name of sites that pay cryptocurrency for viewing ads, entering captcha and just periodic visits to the resource. The amounts that can be obtained on them are very small, they can not be considered as an independent way of earning (exception – search and connection of referrals). Cranes (faucet) of cryptocurrencies are divided into 2 groups:
- Discrete – koin payments take place at regular intervals: once a week, a month, etc.
- Accumulative – you can get coins on your wallet after a certain amount of money. Depending on the faucet, this can take from 1 day to several months.
The table shows examples of cryptocurrency faucets and their characteristics:
| Name | Charging principles | Amount of one-time charge | Withdrawal requirements |
|---|---|---|---|
| Freebitcoin | Once every 60 minutes you need to visit the site and enter captcha | Depends on the bitcoin rate, minimum 1 satoshi, maximum amount is equal to the equivalent of $200. | You need to type 0.0003 BTC |
| Faucetcrypto | Supports 19 different coins. Accrue native tokens of the faucet, which can then be converted into cryptocurrency. | The rate is floating, depends on the frequency of visits and bonus program. | The minimum withdrawal amount is different for each cryptocurrency. |
| Satoshi Hero | Accrual for entering captcha, playing games and completing tasks. | Depends on the Bitcoin exchange rate and the choice of task to perform. | You need 0.0003 BTC to withdraw to a third-party wallet or 0.0001 BTC to FaucetPay. |
Games
One of the most enjoyable ways to get free crypto coins. Online games based on distributed ledger technology are attracting more and more attention from developers of this type of entertainment.
In May 2021, Ubisoft, a well-known manufacturer of computer and video games, announced the support and development of 5 blockchain projects at once.
The first such games were considered only as an opportunity to receive tokens. The storyline, graphics and other components of the gameplay were rather weak. The situation is gradually improving, there are really interesting projects in different genres (Fighting, Metavolens, collectible card games).
For example, we can consider the hit of 2021 – Alien Worlds. The number of active participants of this strategy game with shooter elements exceeds 2 million. The game is developed on the Wax platform and can be used to earn TLM tokens (listed on Binance in April 2021).
Mining without investment
Since the emergence of bitcoin in 2009, the computational complexity of crypto tasks to generate blocks has increased many times over. Therefore, it became unprofitable to do classic mining on a home computer (without additional investment).
This led to the emergence of the concept of “Cloud Mining”. Its essence is that companies rent their computing power for token mining. At the same time, some providers provide their services for free, albeit with certain restrictions.
For example, free services are given for a short period of time. It is impossible to extract the number of tokens for withdrawal (there is a minimum amount), the miner is forced to conclude a contract on a paid basis. Other providers can put a condition for withdrawing the mined tokens – to attract new people to the project. Therefore, you should critically consider such offers. No one will agree to give away their money for nothing.
Affiliate programs
Some services pay remuneration in cryptocurrency for adding new users. This is called a referral or affiliate program. This way can bring a good income. But for this work you need to have a good understanding of the peculiarities of the product, have experience in marketing and understand the target audience. Here can come in handy social networks, thematic forums and the ability to interest people in new prospects. To get a good profit, the number of attracted referrals should number in the tens or hundreds of people.
Summary
Income from operations with digital currencies depends on various factors:
- Availability of startup capital. Without initial investments, it is very difficult to reach a decent level of income.
- Choice of field of activity. Trading on exchanges is quite complex, it is desirable to have an economic education for success. On the other hand, long-term investments depend on exchange rate fluctuations, and having invested money in the most reliable and stable coin, you can count on profit.
- Government regulation. There are countries where any business based on virtual money is prohibited or heavily taxed. Other states, on the contrary, strive to develop this area (in Belarus, it is much easier to earn bitcoin and other cryptocurrency than in Russia or India).
The industry of digital assets is rapidly developing, new directions and opportunities appear. Therefore, one of the main conditions for earning money on cryptocurrency will be awareness of the processes related to blockchain projects that are taking place in the world. It is necessary to follow the changes in the price of the main coins, be aware of the adoption of new laws and the emergence of promising projects.
Frequently Asked Questions
✅ Belarus and the Russian Federation are union states, their citizens do not need a visa to visit the neighboring country. Can a Russian citizen trading on Belarusian crypto exchanges not pay tax on profits?
No. All tax benefits apply only to Belarusians.
💰 How profitable is it to earn bitcoin and other altcoins with the help of faucets?
You will not be able to collect a large amount of money this way. You can attract referrals and participate in the affiliate program. This will increase the volume of coins received.
❓ Is Decree No. 8 expected to be extended after January 2023?
There is no reliable information right now.
💡 Can cloud mining be profitable?
If we talk about the free option, it is unlikely. Projects that provide such services for money can also turn out to be scam (fraud). It is worth studying all available information beforehand and looking for independent reviews of the service.
🏢 Belarusian crypto exchanges are not very famous, have a smaller turnover, so they are less reliable. Is it worth trading on them even taking into account the lack of taxes or is it better to move to Binance?
There is no unambiguous answer, everyone decides for himself.
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Author: Saifedean Ammous, an expert in cryptocurrency economics.
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