From Borscht to Bitcoin?

The recent revolution in Ukraine has brought up many questions about the country’s future but produced so few answers. In Kiev, the creative center Ziferblat (“Dialpad”), working in conjunction with FruitWallet digital wallet, began accepting bitcoins at its location on April 10. Given the overwhelming news coverage peppered with political upheaval, cultural discord, and severe economic troubles in Ukraine, does the adoption of Bitcoin by a single business speak volumes about the future of digital currencies in the country? 

Ziferblat, which hosts live concerts, language clubs, lectures, a library, and a café, opened in its Kiev location in late March. The center is billed as sort of a “hang-out” for people to gather and charges its clients a small amount per minute to spend time there. Visitors make bitcoin transactions with employees armed with iPads using the FruitWallet app. Ziferblat’s first day accepting the cryptocurrency brought in around US$20 worth in bitcoins. 

It remains uncertain if Bitcoin will become a mainstay at Ziferblat. The owners are still unsure what to do with the bitcoins they received, although Maxim Krupyshev, the creator of FruitWallet who approached the owners of Ziferblat with the idea, has offered to buy the bitcoins from them every once in a while. Krupyshev himself remains confident about the currency making a name for itself in Ukraine: “We have agreed to work with the owners until the May holidays and see how it goes from there…There is still not a lot of buzz, but we hope that it will be only a matter of time.” 

Krupyshev’s confidence carries weight: Bitcoin Foundation Ukraine (BFU) plans to hold all future meetings at Ziferblat. BFU is a non-governmental organization Krupshev helped found whose goal is “the creation of such laws and conditions of the [Bitcoin] market, in which Ukraine will become the capital of the cryptocurrency.” 

A Change in Currency 

Bitcoin is no stranger to Ukraine as of late. In late February, Ukrainian activists in Kiev sought support from Bitcoin donors in order to fund a three-month protest. Protestors carried signs with a QR code and the signs seeking contributions. Contributions over three of the protestors’ groups reached over $15,000. As the economy in Ukraine remains unstable, with banks allowing a limit to withdrawal amounts to US$100 and their currency in danger of losing value, one can’t help but wonder if Bitcoin is a legitimate alternative. 

The fluctuating value of bitcoins can be a red flag for any newcomer to the digital currency. Add an unstable Ukrainian economy and government and it’s safe to say that organizations like BFU certainly have an uphill battle as they try to lobby for legislative regulations of Bitcoin. However, Mikhail Chonayan, founder of the Ukrainian Bitcoin agency KUNA, sees a “bright and peaceful” future for Bitcoin in Ukraine. 

KUNA itself does not directly sell bitcoins but rather vouchers with access to bitcoins. His agency, which was founded in early March 2014, also gives Bitcoin consulting for those new to the game. Chobanyan admits that “greater than 95% of [Ukraine’s] population is unaware of cryptocurrency,” but believes the country can become the “capital of cryptocurrency” if investors and lawmakers create strong business models and progressive laws regulating Bitcoin. Furthermore, KUNA is developing software for Bitcoin ATMs that are planned to be in operation by next year. 

As the Ukrainian government stresses the risks of investing in Bitcoin, the country’s small and determined Bitcoin believers envision a stable future relying on the digital currency. If it’s “only a matter of time” to tell if the Bitcoin phenomenon takes off in Ziferblat, one can only imagine the amount of time and effort it will take for it to make a lasting impact in all of Ukraine. 

Expert’s opinion from Dmytro Petrul: 

"In my personal opinion, the potential of Bitcoin cryptocurrency growth in Ukraine is not realistic at the moment. Due to the unstable political situation and chaos in the press and media, it comes off as very risky. Again, this is my personal opinion.

Regarding the ordinary people who are interested in mining bitcoins: this situation shows much potential. There are a lot of open-minded software and hardware engineers that are actively involved in Bitcoin mining. Bitcoin forums are full of articles, comments, and discussions. I believe these people will fulfill the expectations of investors in the future."