Accepting crypto for donations - how?
July 15, 2021 2:42 PM Subscribe
I run a site which accepts (paypal) donations to help with expenses. Not a lot of folks donate, but someone recently asked if they could donate cryptocurrency (not sure which currency). Is there an easy way for me to allow this without becoming enmeshed in some byzantine or sketchy ecosystem?
I'd be fine just letting the crypto sit for the short term, but if $$$ amount accumulated, would like to be able to convert it to USD somewhat handily. I didn't ask the person, but this is undoubtedly a token amount of money they wants to pass along...but every little bit helps!
Paypal suggests on their site some ability for me to have them hold crypto for me, but I don't get the impression it's actually available at checkout in their cart.
I'd be fine just letting the crypto sit for the short term, but if $$$ amount accumulated, would like to be able to convert it to USD somewhat handily. I didn't ask the person, but this is undoubtedly a token amount of money they wants to pass along...but every little bit helps!
Paypal suggests on their site some ability for me to have them hold crypto for me, but I don't get the impression it's actually available at checkout in their cart.
Crypto people love to harass businesses about not accepting crypto as payment even when they have no real interest in paying that business or, as in this case, offer only a token amount. I would not assume that this offer is made in good faith. You can just say no.
posted by chrchr at 11:40 PM on July 15, 2021 [2 favorites]
posted by chrchr at 11:40 PM on July 15, 2021 [2 favorites]
If I were looking at accepting cryptocurrency donations, I would refuse to accept currencies based on proof-of-work or other proof-of-consumption consensus protocols because of the terrible side effects those have. Proof-of-work cryptocurrencies like Bitcoin and Ethereum (and others that run on the Ethereum blockchain) burn utterly unconscionable amounts of energy; proof-of-consumption currencies cause shortages of the resources they waste (for example Chia, which wastes data storage space in much the same way as Bitcoin wastes compute power, is driving a worldwide hard drive shortage right now).
More modern protocols like the Stellar Consensus Protocol don't waste resources, cost almost nothing per transaction, and settle transactions very fast. So I'd be completely happy to accept donations via the Stellar blockchain, whose native currency is Stellar Lumens.
I use the Stellar wallet built into the Keybase messaging app, which I think is adequately secure and also very convenient. And, full disclosure: that wallet currently holds (to me) quite substantial amounts of Lumens, so I have a direct financial interest in persuading other people to use them. You should reality-check the information I've provided above with other people who don't share that interest.
Cryptocurrency transactions can only ever be initiated by the entity that the money is coming from. Anybody using any Stellar wallet can send money to mine via my public Stellar address, which is GCZL5P7HNCLTJK73EX5EXQNVPK5A5M3L5GTCKUUDJTQXEJC5WLIFMZNV. The fact that I've exposed a genuine address on a publicly accessible Internet forum thread gives you some idea about my assessment of the security of these things - I'd never dream of doing the same thing with my bank account or Visa details, for example.
Public addresses in that form are supported by all Stellar wallets but they're obviously quite unwieldy, so Stellar also supports a federated name-to-address mapping facility that works a bit like DNS; wallets that support it can also send money to my wallet via flabdablet*keybase.io instead, if they trust keybase.io to resolve flabdablet to the public address above.
Stellar public keys start with a G. Every Stellar wallet also has a secret key, which starts with an S. Your Stellar secret key should never need to be exposed except for the purpose of backing it up. You never need to share it and any attempt to persuade you to is a scam.
Converting cryptocurrency held in your own wallet to fiat currency in your own bank account involves using a cryptocurrency exchange that can talk to the bank. I'm in Australia and use Independent Reserve for this purpose. If I were in the US I'd use Coinbase.
Setting up an account with a reputable cryptocurrency exchange involves supplying the exchange with identity documents for anti-money-laundering purposes. There are less-reputable outfits that do not require you to do this. I would not use any such outfit as I would expect to have a great deal of difficulty getting actual fiat currency, as opposed to cryptocurrency tokens allegedly equivalent to fiat currency, out of them.
Once you've set up an account with an exchange, you typically get a collection of exchange-hosted wallets (i.e. the exchange, rather than you, holds the secret keys for those) denominated in assorted crypto and fiat currencies. You can deposit and withdraw fiat currency to and from the exchange by linking it to a payment method. Coinbase supports credit cards for dollar deposits, and bank accounts or PayPal for dollar deposits and withdrawals.
To convert Stellar Lumens in your own wallet to dollars in your own bank account, you'd first transfer some Lumens from your own Stellar wallet to your Coinbase account's over the Stellar blockchain, same way as you'd make any other Stellar payment. You'd drive that process from your own wallet software, not from Coinbase, using your Coinbase account's public Stellar address (possibly accompanied by an account-specific "memo" value, depending how Coinbase has its wallets set up internally) as the payment target.
Next, you'd place a sell order on Coinbase. You can do this using either at-market pricing, which means they sell quickly for whatever somebody else is willing to pay for them, or at-limit pricing, which means you know what you're going to get for them but have no idea how long it will take to find somebody willing to pay that much. Once the sell order has executed you end up with dollars in your Coinbase account, which you can then withdraw to your bank or PayPal account. I don't have an account with Coinbase but I've never found the Independent Reserve equivalent process either difficult or sketchy.
Historically, when cryptocurrency gets stolen it most often happens to balances held in accounts at exchanges, not to balances in private wallets. I lost annoying amounts of both Bitcoin and AU$ when MtGox folded, for example. But if you have your donated Lumens paid into one of your own wallets then nobody who doesn't know your secret key can get them out, and the only way you'll lose is if (a) you leak your secret key to a scammer (b) the market value of Lumens declines severely (c) the whole Stellar network goes belly-up.
Transferring crypto to Coinbase only in order to sell it, and withdrawing your dollars from your Coinbase account as soon as the sales execute, means you're not relying on Coinbase's own security for very long at a time. Personally I'd trust Coinbase to about the same extent as I'd trust PayPal - it's pretty well-established by now, and doing roaring business selling shovels in the crypto gold rush - but your own risk evaluation might reasonably be quite different.
posted by flabdablet at 4:28 AM on July 16, 2021
More modern protocols like the Stellar Consensus Protocol don't waste resources, cost almost nothing per transaction, and settle transactions very fast. So I'd be completely happy to accept donations via the Stellar blockchain, whose native currency is Stellar Lumens.
I use the Stellar wallet built into the Keybase messaging app, which I think is adequately secure and also very convenient. And, full disclosure: that wallet currently holds (to me) quite substantial amounts of Lumens, so I have a direct financial interest in persuading other people to use them. You should reality-check the information I've provided above with other people who don't share that interest.
Cryptocurrency transactions can only ever be initiated by the entity that the money is coming from. Anybody using any Stellar wallet can send money to mine via my public Stellar address, which is GCZL5P7HNCLTJK73EX5EXQNVPK5A5M3L5GTCKUUDJTQXEJC5WLIFMZNV. The fact that I've exposed a genuine address on a publicly accessible Internet forum thread gives you some idea about my assessment of the security of these things - I'd never dream of doing the same thing with my bank account or Visa details, for example.
Public addresses in that form are supported by all Stellar wallets but they're obviously quite unwieldy, so Stellar also supports a federated name-to-address mapping facility that works a bit like DNS; wallets that support it can also send money to my wallet via flabdablet*keybase.io instead, if they trust keybase.io to resolve flabdablet to the public address above.
Stellar public keys start with a G. Every Stellar wallet also has a secret key, which starts with an S. Your Stellar secret key should never need to be exposed except for the purpose of backing it up. You never need to share it and any attempt to persuade you to is a scam.
Converting cryptocurrency held in your own wallet to fiat currency in your own bank account involves using a cryptocurrency exchange that can talk to the bank. I'm in Australia and use Independent Reserve for this purpose. If I were in the US I'd use Coinbase.
Setting up an account with a reputable cryptocurrency exchange involves supplying the exchange with identity documents for anti-money-laundering purposes. There are less-reputable outfits that do not require you to do this. I would not use any such outfit as I would expect to have a great deal of difficulty getting actual fiat currency, as opposed to cryptocurrency tokens allegedly equivalent to fiat currency, out of them.
Once you've set up an account with an exchange, you typically get a collection of exchange-hosted wallets (i.e. the exchange, rather than you, holds the secret keys for those) denominated in assorted crypto and fiat currencies. You can deposit and withdraw fiat currency to and from the exchange by linking it to a payment method. Coinbase supports credit cards for dollar deposits, and bank accounts or PayPal for dollar deposits and withdrawals.
To convert Stellar Lumens in your own wallet to dollars in your own bank account, you'd first transfer some Lumens from your own Stellar wallet to your Coinbase account's over the Stellar blockchain, same way as you'd make any other Stellar payment. You'd drive that process from your own wallet software, not from Coinbase, using your Coinbase account's public Stellar address (possibly accompanied by an account-specific "memo" value, depending how Coinbase has its wallets set up internally) as the payment target.
Next, you'd place a sell order on Coinbase. You can do this using either at-market pricing, which means they sell quickly for whatever somebody else is willing to pay for them, or at-limit pricing, which means you know what you're going to get for them but have no idea how long it will take to find somebody willing to pay that much. Once the sell order has executed you end up with dollars in your Coinbase account, which you can then withdraw to your bank or PayPal account. I don't have an account with Coinbase but I've never found the Independent Reserve equivalent process either difficult or sketchy.
Historically, when cryptocurrency gets stolen it most often happens to balances held in accounts at exchanges, not to balances in private wallets. I lost annoying amounts of both Bitcoin and AU$ when MtGox folded, for example. But if you have your donated Lumens paid into one of your own wallets then nobody who doesn't know your secret key can get them out, and the only way you'll lose is if (a) you leak your secret key to a scammer (b) the market value of Lumens declines severely (c) the whole Stellar network goes belly-up.
Transferring crypto to Coinbase only in order to sell it, and withdrawing your dollars from your Coinbase account as soon as the sales execute, means you're not relying on Coinbase's own security for very long at a time. Personally I'd trust Coinbase to about the same extent as I'd trust PayPal - it's pretty well-established by now, and doing roaring business selling shovels in the crypto gold rush - but your own risk evaluation might reasonably be quite different.
posted by flabdablet at 4:28 AM on July 16, 2021
This thread is closed to new comments.
posted by amtho at 2:48 PM on July 15, 2021 [6 favorites]