Watch how we send bitcoins from Miami to a Ukrainian in Poland

Alena Vorobiova hadn’t given much thought to bitcoin before Russia invaded Ukraine in February. Fast forward to border closures and bombings in her hometown, cash shortages at ATMs across the country, and the central bank’s suspension of electronic cash transfers — and she decided to give it a try. the bitcoin.

While fund providers often charge transfer fees of 10% or more when you send $100 from the United States to Ukraine, Bitcoin’s Lightning Network, which is a payment platform based on the basis of Bitcoin, reduces the cost of transactions to practically zero.

Vorobiova and CNBC have decided to put Lightning Payments to the test – with the expertise and translation skills of bitcoin developer Gleb Naumenko, who is currently hiding in western Ukraine as war rages on.

The bottom line? It really works as well as bitcoin boosters say.

The process of downloading a crypto wallet to Vorobiova’s phone, transferring bitcoin over the Lightning Network from the United States to Poland, and withdrawing the Polish currency equivalent from a bitcoin ATM in the city of Wrocław, in the southwest, took less than three minutes.

Alena Vorobiova withdraws Polish zloty from a bitcoin ATM in Poland.

Sending satellites from Dallas to Miami in Poland

Last August, on a road trip from Houston to Dallas, Peter McCormack — founder and host of the popular What Bitcoin Did’ podcast — taught CNBC how to use the Lightning Network to make instant payments to anyone in the world. world.

The tutorial took less than 60 seconds and involved four basic steps: We downloaded the Blue Wallet app and generated a unique invoice in the form of a QR code. McCormack scanned that QR code using a similar app on his own phone, then transferred 100,000 satoshis, or sats (the smallest bitcoin denomination, roughly 0.00000001 BTC) from his account to ours. The total transfer was about $50.

Eight months later, from a hotel room in Miami on the sidelines of the Bitcoin 2022 conference, CNBC decided to pay that knowledge — and some of those sats — forward.

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On a three-way video call with Naumenko in western Ukraine, Vorobiova in southwest Poland, and CNBC in Miami, we followed a very similar sequence of events.

Under Naumenko’s guidance, Vorobiova downloaded the Muun Wallet app, another type of self-custodial wallet for Bitcoin and Lightning, created a four-digit PIN and generated a QR code invoice. CNBC then captured this QR code using scan mode in blue wallet and transferred over 50,000 sats from McCormack. The fees amounted to fractions of a penny. (For the purpose of the experiment, Naumenko transferred another 50,000 because the bitcoin ATM had a minimum withdrawal amount.)

Bitcoin developer Jeff Czyz told CNBC that Lightning wallets are compatible because they must all implement the Basis of Lightning Technology specification, or BOLT, which defines a Layer 2 protocol for sending payments over the Lightning Network.

“A Lightning wallet app is like a bank, in that sending money between banks forces them to speak the same language,” said Czyz, developer of Jack Dorsey’s team known as Spiral (formerly Square Crypto). This common language is the BOLT specification.

“The Lightning Network consists of nodes connected by payment channels, which are used to transfer payments across the network without the need to trust intermediaries,” Czyz continued.

Alena Vorobiova withdraws Polish zloty from a bitcoin ATM in Poland.

Just like the tutorial in the car, the process of transferring sats from Miami to Wrocław also took about a minute.

From there, Vorobiova – who followed her sister and niece to the Polish city of Wrocław to help them get settled – went to one of fifteen bitcoin ATMs in Wrocław and requested a withdrawal.

She accomplished this by using a QR code that the ATM spat out. She scanned the QR code in her phone using the Muun app, transferred her bitcoin to the ATM account, and the ATM in turn issued the money. She ended up with 170 zlotys, the Polish currency, worth about 100,000 sats or $40. The ATM company took a fee of 10 zlotys, or about 5.5% of the total transaction.

“It’s the same flow as making a payment for a good or service using Lightning,” Czyz explained.

For Vorobyova, it was more of a fun experience. She is able to travel back and forth from Ukraine to Poland, and she tells CNBC that she is following the advice of Ukrainian regulators to only use credit cards at this time.

But the process illustrates how refugees with no money and no way to access their possessions can use crypto wallets for banking.

Some Ukrainians use it to facilitate peer-to-peer transactions, while others have found Lightning to be a cheap and fast way to receive donations and remittances from anywhere in the world. In Poland, for example, there are more than 175 bitcoin ATMs, allowing refugees who fled with bitcoin to cash it in for fiat currency.

“Me sitting in California, I can always send you any amount of money instantly to your phone anytime,” said Alex Gladstein, director of strategy for the Human Rights Foundation, which has been supporting activists in Ukraine for a long time. 2009.

“We don’t have to worry about you being a refugee. It doesn’t matter if you don’t have a Polish passport or a bank account. None of those things matter,” Gladstein continued.

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