“When the mafia kidnapped me, I had the choice to pay the ransom in either fiat money or Bitcoin. I did not hesitate before choosing the latter. Had I picked the first option, the criminals would have held me in a dark, damp cell for days in the Pacific Islands until the funds went through KYC, identity check, or, God forbid, the bank placed a hold on the funds. But after I paid, I was let go instantly. Who knew the network’s 10-minute transaction time and cross-border anonymity could be such a lifesaver?”

— Dr. Anon

According to a recent report compiled by Chainalysis, the intersection between cryptocurrency and crime has grown to become a $14 billion industry in 2021. Regrettably, societies worldwide are far from perfect, and the rapid rise in the market capitalization of digital currencies has led to an explosion of crime targeting blockchain enthusiasts. The good news is that the money lost in criminal activities as a percentage of crypto’s overall market cap is actually going down.

While there is a wide range of variance in tactics, the common theme is the exploitation of individuals’ naivety and blind trust in the legitimacy of the crypto services they sign up for. The first step toward compounding gains with crypto investments is to be super diligent and to avoid losing your vigilance.

We’ve spoken to three experts to get their advice on protecting one’s hard-earned capital. First up is Dr. Anon, a Cointelegraph staff member, who, long before joining the firm, was targeted by the mafia out in the Pacific Islands for his expertise in crypto (as you may have gathered, his first security tip is to remain anonymous online to avoid letting bad guys know you even have crypto). Dr Anon is frequently abroad for work and had to think quickly to get out of quite a few dangerous situations. He explains why it’s essential to keep a low profile.

Don’t post online about your success in crypto

Dr. Anon: In many parts of the world, people remain underexposed to crypto. Their only insight comes from sensational media stories of individuals getting rich off an early investment in Bitcoin or a lucky bet on Shiba Inu. When you travel to certain countries and mention that you work/invest in crypto, the locals’ first impression about you immediately switches to that of “millionaire” or “billionaire.” It will make you far more susceptible to crimes such as robberies or kidnappings. Unless it’s someone you trust, make up a cover story about what you are doing.

In addition, some investors are very emotional about the state of affairs of their favorite coins, or are downright zealous. Be careful about posting criticism, strong negative opinions, or factual information about certain coins on social media if you have a public profile. Some blockchain fanatics could retaliate by doxxing you — posting your phone number, addresses, spouses name, etc., for a broad (possibly crazed) audience. If you have to say something deeply controversial on the internet, keep yourself anonymous.

How to protect yourself from a $5 wrench attack

Dr. Anon: Long story short, a $5 wrench attack is when someone finds out you have a lot of crypto and physically attacks or threatens you and coerces you into giving up your private keys. Very few of these attacks happen

impromptu; that is, they are highly sophisticated, carried out by “professional,” organized criminals. It’s a “your money, or your life” situation.

Suppose you became a target of kidnapping for crypto ransom. In that case, chances are the perpetrators have already scanned your LinkedIn profile, Twitter accounts, Crunchbase, public addresses listed on voter records, etc., and planned days, if not weeks, in advance to account for all the variables during the act, such as escape. The only way to access one’s private wallet is through the keys, so expect some pretty rough action if one refuses to hand them over.

That said, one can significantly limit their losses by having a “decoy” crypto wallet. In other words, don’t put all eggs in one basket. One strategy is to put, say, a small percentage of one’s crypto net worth into a separate hard wallet. Then, if a robbery, kidnapping, etc., were to occur, simply hand it over and call the police afterward. It’s a smaller loss than otherwise, and no amount of money is worth the risk of getting tortured or killed for refusing to pay.

Pulling the rug from under you

Personal security aside, the risks facing crypto investors regarding DeFi rug pulls, hacks, phishing scams, etc., are significant. In fact, Chainalysis estimates $2.8 billion worth of DeFi rug pulls took place in 2021. Cointelegraph reached out to Hank Schless, senior manager of security solutions at Lookout, for his insight on crypto cybersecurity.

How to spot a potential DeFi rug pull

Hank Schless: Rug pulls, which occur when a crypto developer [or outright scammer] abandons the project and runs away with any investor funds, are unfortunately fairly common. Often, you can spot a potential rug pull by looking at how that particular crypto is traded. For example, if a smaller number of wallets hold a massive percentage of the currency, or if its liquidity is abnormally low, odds are it could be a rug pull scheme.

Also, if the developer chooses to remain anonymous or the project seemingly appeared out of nowhere, this could be because the developer is malicious and trying to execute a rug pull as a quick money-grab scheme.

Common traits of exchange hacks and protocol security breaches

Hank Schless: Cryptocurrency platforms make for appetizing targets for a handful of reasons — many of which align with other financial cyber crimes, such as targeting banks and their customers.

Crypto platforms themselves have a mountain of highly sensitive, personally identifiable information.

To register for most crypto platforms, individuals need to give their legal name, home address, date of birth (and the last four digits of their Social Security number in the United States). In addition, they need to link their account to a bank account and a debit card to make cash purchases of new crypto.

Cyber criminals can target employees of the crypto platforms with phishing attacks that intend to steal their corporate login credentials. With these credentials, the attacker can log into that employee’s account and move laterally around the infrastructure until they find valuable data to exfiltrate, encrypt for a ransomware attack, or funnel customer funds out to their crypto wallet.

The No. 1 thing to keep your crypto safe

Hank Schless: The number one thing, which is not a novel tactic, is never sharing your login information with anyone. As a personal investor, you rely on trading platforms to keep your data safe, but to keep attackers from gaining access to your personal funds, you should never interact with a link or email that asks for your login. If you receive a text message or email that claims to be from the platform you use, contact the platform directly and validate the communication.

Keep your funds in cold storage — but even that is not completely secure

Hank Schless:  No piece of hardware or software is entirely invulnerable. There are inevitable flaws in code and manufacturing, which could lead to critical vulnerabilities, but with enough time and resources, anything can be hacked. In the case of cold wallets, the most significant risk occurs when a malicious actor gets physical access to a wallet and can take the time to try to guess its PIN. That being said, it’s still far more secure to store crypto on a cold wallet than anywhere else.

Social engineering and time pressures are ways to exploit the desire to get rich

Hank Schless:  When targeting consumers, attackers know that crypto is relatively new and uncharted territory for most people. This may cause consumers to exercise less caution or have difficulty spotting red flags that indicate mal-intent. However, the recent boom has driven high interest in crypto and engagement with these platforms as people hope to make money from this alternative form of investing.

There’s also a particular type of individual who chooses to invest in cryptocurrencies, especially less established ones, to take on higher risk for potentially higher reward. This opens the door for aggressive social engineering and [the creation of] fake apps that either look real or promise higher returns and more real-time data.

Attackers will always try to create high-pressure situations that cause you to not think about what’s happening. It’s essential to take a step back, evaluate the situation, and find different ways to validate what’s happening.

If you’re ever contacted in this way, and the individual asks you to download an app or click a link, simply don’t. If this does happen, it’s important to ensure you’re protected by having a mobile security app on your device that will block connections to phishing sites and alert you if you download a malicious app.

A word on tax

And lastly, while pretty much no one in the crypto world is fond of taxes, almost all types of crypto acquisitions/dispositions are taxable events.

Despite the “Wild West” regulatory environment, crypto investors can face severe penalties should they be found to be non-compliant with their tax obligations — so, keeping your tax affairs in order is essential to protect your hard earned funds.

In an interview with Cointelegraph, Andrew Henderson, an international tax attorney and founder of the Nomad Capitalist tax consulting firm, discussed the nature of crypto tax transactions and the consequences for not abiding by the law.

Is there any way to legally avoid the tax bill?

Andrew Henderson: You’re paying on pretty much everything acquisition/disposition related; it’s like

with fiat money — if you live in the U.S. and get paid in euros, or even crypto, it doesn’t mean it’s not taxable. Other examples, such as staking or getting rewards from a DeFi pool — that’s income and taxable as well.

If you’re a U.S. person, or a green card holder or a citizen, anywhere in the world, you have to report your crypto income to the IRS [Internal Revenue Service] each year.

Suppose you live in a residential tax country, like Germany, Canada, Australia, or pretty much every Western country other than the U.S. In that case, that is where they tax you based on your residence, and they tax you based on your worldwide income.

So, if you live in the country and stash all your crypto in an account in Belize, that doesn’t solve the problem; you will be taxed locally. The goal of having no legal tax obligations depends on whether you are a U.S. person and giving up citizenship, or whether you’re simply moving out of your country and following the criteria to no longer be a taxpayer there, for citizens of countries with residential taxation, such as Canada, EU members, Australia, Japan, South Korea, etc.

Affluent investors can move to low-tax countries. Is there a trade-off?

Andrew Henderson: I’m a person who believes in the culture of a country, and obviously, El Salvador is trying to move in the right direction, at least on that crypto front. But that said, I’ve been to El Salvador; I found it to be a highly unworkable country. San Salvador was one of the few places in the world where I felt very unsafe. So, I do think there’s a danger.

In a country like Estonia, when they announced their digital nomad visa, everyone thought that meant they would get citizenship, and everyone could get a bank account, and there was zero tax. No, no, they have tax; you pay it later. So, [Estonia’s residency visa] was not nearly as great as what it was touted for.

The Cayman Islands, the UAE — [there are] plenty of territorial taxation only countries. Tax-free, tax-exempt — now you can move to Portugal, you can move to Italy, you can move to Greece, you can move to Malta, you can move to Ireland. These countries all have tax exemptions for some time, at least. A lot of people have moved to Puerto Rico to reduce the taxes. But Puerto Rico responded [by] raising the tax rate from 0% to 12.5%. So, anyway, you don’t need to go to places if you are not comfortable there; alternatives exist.

Nomad Capitalist Live is the premier gathering of global citizens. Join us for four powerful days of “what’s working now” about creating a Plan B, second citizenship, offshore tax strategies, international investing, and the Nomad Capitalist Lifestyle.https://t.co/iqzErGYhQp

— Nomad Capitalist (@nomadcapitalist) January 14, 2022

The consequences of evading crypto taxes

Andrew Henderson: Some people who got stuck before they came to me flew too close to the sun. But, as a case study, there’s one thing they’re efficient at over in Spain — they’re efficient at finding you, and will get your money. I mean, look at people like Wesley Snipes.

You’re filing a tax return under oath, so if you omit or misrepresent, you could go to jail. You could have your passport taken away — citizenship or passport. Good luck getting a residence permit anywhere in the world if that happens. Maybe El Salvador would take you; some countries don’t require clean criminal records.

Even if you don’t pay and you haven’t been caught, it could come and bite you down the line. For example, if you want to move to Saint Lucia [island nation in the Caribbean], one of the questions is: Are you in compliance with all your tax obligations? If you say yes, and later it turns out you’re not, they have every right to denaturalize you; you could become stateless. Or, at the very least, you paid $100,000, and you got nothing because you broke the contract. The consequences are far-reaching.

To sum up: Small tricks can have a big payoff

We all love to express our successes in the crypto space, but remember that too much attention could potentially expose oneself to the risk of a $5 wrench attack or doxxing. Therefore, if you have a crypto fortune, keep as much of your public information hidden as possible, have a decoy wallet in case one becomes a target of crime, and have a cover identity when in not-so-affluent countries.

Never share your login information with anyone, and keep your funds stored in a cold wallet. Specifically, be wary of clicking on links in apps like Discord that lead to login pages, as such programs have repeatedly become the target of phishing in the past. Always remember the official site link and cross-check that with the link you are clicking, even if the link is posted by an admin, as the latter’s account is still vulnerable to being compromised.

Remember to keep accurate records of your taxable transactions — it makes life a lot easier when it comes to filing returns. Citizens of residential taxation countries have legal means of avoiding capital gains or income taxes on crypto acquisition/dispositions, such as moving abroad. It’s much better to pursue such methods and have one’s mind at ease rather than evade taxes and risk jail time.

Stay safe out there, frens.

Source

Former Boston ICU nurse Allie Rae made international news in August last year after she was fired for running an extremely naughty Only Fans account on the side. The story appeared everywhere from the NY Post, to CNN, The Daily Beast — and she even made an appearance on Dr Phil.

The resulting publicity saw fans subscribing in droves and the 37-year old mother of three now makes more than $200,000 a month.

But the same sort of moralizing and censorship that ended her nursing career also threatens her newfound wealth from Only Fans. Just six days after her story was made public, Only Fans announced it would ban “sexually explicit” content, under pressure from its banking partners.   

“When the news broke about the payment processing and OnlyFans I began looking at other platforms to switch to, and quickly realized they too could fall into the same trap down the road,” Rae says on the line from her new home in crypto friendly Florida.

“It was at that time that I figured out crypto was the answer.”

She’s assembled a team of 20 developers and is putting the finishing touches on a new Only Fans meets Instagram style crypto-powered social platform called WetSpace. It’s due to launch in beta in February, accepting payments in a range of stablecoins across different chains to mitigate issues with gas fees. NFT support will come in the project’s second stage mid-year.

Porn has long been seen as one of the best chances crypto has for adoption: Users can remain anonymous and performers don’t have to deal with payment processors charging them high fees or unilaterally cutting off services under opaque morality clauses.

Despite this, as Magazine discovered in the past, crypto payments have failed to take off. Pornhub tried and failed with Verge, then moved to using Pumapay’s service, which was crippled by high gas fees on Ethereum and is in the process of relaunching on Binance Smart Chain. Spankchain attempted a more modest platform targeting crypto users but has had limited success so far, though it’s still in the game and is developing ‘SpankPay V2’ based on user feedback. Cumrocket is developing an NFT marketplace but reports limited availability of its CUMMIES tokens on exchanges.

Rae believes a major problem is trying to launch projects with related adult tokens. “I had been watching the fall of other ‘adult shit coins’ and how their model was destined to fail serving two masters — creators and holders. That is when WetSpace came about.”

Rae points out that adult coins add an extra step to the process and most are very volatile which isn’t attractive to users or models. 

“So I thought,’ Well we don’t need a coin, like, why go through all the drama of this coin? Of course, you’d get a lot of money up front, and it would definitely help fund your project. But luckily, I didn’t need to be concerned about the financial side of it, because I had the money to put into it.”

How she got here

The mother of three teenage sons, Rae is an unlikely porn star turned crypto entrepreneur. She joined the Navy at 17 and married husband Steven the following year (he sometimes stars in her videos). She then worked for five years in marketing, management and real estate, before getting her dream job in nursing. “I was obsessed,” she says. “I was a straight A nursing student, it was truly my passion and still is, it really is.”

Rae received a Masters in Nursing Education and specialized in Neonatal Intensive Care, nursing sick babies back to health. “Even though it was such a tragic time for so many families there were also so many great moments,” she says. “I was a wonderful NICU nurse very, very good at my job.”

But bored at home during the pandemic, she started up an Instagram account posting about hockey and craft beer. This attracted a devoted male following, some of whom suggested she start an Only Fans. When she read news reports that the actress Bella Thorne had made $1M on the platform in a single day, she decided to take their advice.

“I posted a few pictures and I really actually had kind of fun with it. It was quite liberating, you know, at my age and before you knew it, I had so many subscribers and we were actually making good money on there.”

By the end of her first month she’d made $6,900 — more than the $6,500 she was paid as a nurse.

Unfortunately for Rae not everyone is a fan of Only Fans and a group of six of what she calls her “mean girl” colleagues, led by a Pastor’s wife, stumbled across her Instagram and then screenshotted her Only Fans content for management.

News spread like wildfire through the hospital and that was “ultimately what I think drove management to have to act.”

“Their overall consensus was that it was now such a distraction on the unit, with everybody knowing, that if I was going to continue to do that, I couldn’t work there,” she adds.

“I wasn’t mentally ready to leave, I’ll tell you it was very difficult. There’s a lot of tears shed in that. But I think given how toxic the environment and how judged I felt there, I wasn’t looked at the same, it was probably the right thing to do.”

Tailor made for the media

Firing an ICU nurse in the middle of a pandemic due to her porny Only Fans account is an editor’s wet dream (not Magazine of course, we’re strictly interested in the future of finance) and the story went viral. She went from making $35K a month from her side hustle to $200K a month thanks to the publicity. Steven gave up his airline job to help full time with the business.

“Our success was just unbelievable and so it became hard to not make it a priority,” she says. 

“It’s crazy to go from being a suburban hockey mom slash nurse to now I’m like this advocate for the sex industry. I mean, it’s very, very different.”

Porn payments

Part of that advocacy is trying to figure out a way for creators and operators to escape the stranglehold that traditional payment processors have on it. In recent years the war on adult sites by payment processors has ramped up, supported by the emotive campaigns of anti-porn crusaders.

A case in point in the famed New York Times piece in December 2020 called The Children of Pornhub. Columnist Nicholas Kristof sensationally claimed the “site is infested with rape videos. It monetizes child rapes, revenge pornography, spy cam videos of women showering, racist and misogynist content, and footage of women being asphyxiated in plastic bags.” He argued the site facilitated sex trafficking and cited a petition with 2.1 million signatures calling for it to be closed.

Often mistakenly referred to as an investigation, the NYT billed the piece as “opinion” meaning its usual standards of fact checking don’t apply. Mashable summed up the piece as being based on the “dubious and distorted findings and arguments of one anti-sex work conservative group”. It caused a massive backlash and MasterCard and Visa quickly announced they would no longer provide services to Pornhub, threatening the viability of the tie.

The deplatforming of sex sites by payment companies has ramped up considerably in recent years, following the passing of the controversial  FOSTA-SESTA (Fight Online Sex Trafficking Act and the Stop Enabling Sex Traffickers Act) in 2018.

Rae’s first encounter with the issue, came when Only Fans caused outrage in August last year by announcing it would ban ‘sexually explicit’ content, threatening the livelihoods of 2 million creators making $2.3 billion a year. Founder and CEO of OnlyFans Tim Stokely blamed BNY Mellon, Metro Bank, and JPMorgan Chase for refusing to process payments, though the ban was quickly reversed after “banking partners’ assurances that OnlyFans can support all genres of creators.”

“A lot of people at that time were reaching out to me, what do you think about this? Oh, my gosh, where are you going? You’re making so much money. Now where are you going to put your content?” she recalls.

Rae explains that she’d considered other platforms but realized competitors “are at the mercy of the banks as well.”

“That’s when my brain really got to turn on to: what is the solution to this?,” she says.  “At that time, I didn’t fully understand the nature of what was going on. But I did a lot of research and I started to really dive into the dark, you know, part of what’s going on in terms of the big financial institutions.”

“Porn is always looked at as taboo. There’s a stigma out there. But the amount of control that these banking industries have, over every platform that runs primarily on fiat, is scary.”

Counterpoint

She argues that Only Fans gives creators a safer way to work in the sex industry than in a strip club or on the streets. And while she believes in taking firm action against sex trafficking and child pornography, she says those aims are only selectively pursued by payment processors.

A 2020 survey from the National Center for Missing and Exploited Children revealed Facebook had 20.3 million reported incidents of child sexual abuse materials, Google had 546,704 incidents, Twitter had 65,062, Snapchat 144,095, and TikTok 22,692.

Way down the bottom of the list was Pornhub’s parent company MindGeek with 13,000.

“Facebook literally is the leader in child sex trafficking, and they’re definitely not shutting them down,” she says. “How much of it is in regards to them just truly wanting to get rid of the people in this industry (porn) and ban this type of content — is it really about child trafficking?”

“The banks are the issue across the board. And the only natural solution to that is well, how do we get rid of the banks? Well, luckily, there’s decentralization, and there’s crypto.”

Crypto and the porn industry

Rae had dabbled in crypto previously, making a bundle off of Dogecoin when Elon Musk’s tweets drove it to the moon, and playing around with creating her own NFTs when Cumrocket launched its NSFW NFT marketplace in mid-2021.

She says the anonymity of crypto is perfect for users who want to sign up but can’t afford to have an Only Fans entry on their bank statements.

“I get DMs all the time saying ‘God, I wish I could join Only Fans. But you know, I just can’t have my accountant seeing all the charges.’” There’s a huge market that a lot of creators aren’t able to tap into.

The WetSpace interface will look a lot like Instagram with a feed, a discovery feature for creators and later on, a marketplace enabling models to sell NFTs with added bonuses like free subscriptions, premium snaps or video chats. WetSpace will charge creators 15% (Only Fans charges 20%) and they can select which cryptocurrencies to accept. They receive the money instantly and don’t have to worry about chargebacks.

Rae says it’s about 90% complete right now, with new features being added all the time.

“We have a Discord (forum) that’s really poppin, lots of creators saying, Hey, are we gonna have this? Can we do this? And I’m like, ‘Yes, we’re gonna have so many great things.’ I think it’s going to be a fun place to be for the user and the creator. And I’m excited and I hope it revolutionizes this entire industry.”

Yeah, but …

While there’s no doubting her ambitions, so far though crypto payments in porn haven’t really worked out. In early 2020, Spankchain performer and ambassador Allie Eve Knox explained to Magazine why:

“These are old dudes that are just trying to get off and then now they have to go through this whole thing of creating a wallet, saving a seed phrase, getting crypto, moving it into a wallet. […] It’s not just ‘I’m gonna go buy porn in 15 minutes and relieve myself’ process.”

Rae however believes times have changed and that the tech is more widespread and user friendly than ever before. She concedes the biggest hurdle will be helping noobs get started, but there will be step by step explainers and guides on how to buy crypto through a connected Coinbase, Metamask or Trust wallet.

“I want very, very clear clicks: like ‘sign up for your wallet here’ step-by-step because I do understand it is a learning curve. We are putting a lot of time and money into the educational side of this. Because it truly is really easy once you get going.”

“Crypto is in your face everywhere now. A couple of years ago, people would laugh at you if you talked about Bitcoin, people were like, Oh, God, one of those Bitcoin people! And look at it now. It’s an actual currency. I think a lot of people who didn’t believe in it before are definitely starting to be like, Okay, what is this all about? And they’re wanting to know more.”

“There’s no doubt in my mind, it will be a very, very big part of pornography, or any type of subscription base for adult content,” she says. “I don’t think it’s going away.”

Source

This is part two of an extensive interview with Dmitry Buterin, looking at his relationship with Vitalik and his insights as a father. For Part 1, which detailed his own fascinating life story, click here.

Dmitry Buterin recalls the day in 2013 when his son Vitalik showed him the Ethereum white paper at their home in Toronto.

“He‘s like, ‘Hey Dad, I was working on this thing, are you interested to look at it?’” the Chechyna-born Toronto resident says in his idiosyncratic accent. Vitalik had dropped out of university a year before to travel the world and, within a month of arriving home, he‘d written the first draft.

Even though Dmitry famously introduced his son to Bitcoin two years earlier, he admits many of the details went right over his head. But, he understood the wider vision.

“One of his skills is he can take something very very complex and he can explain it really well,” he says.

“So, even though I was only superficially knowledgeable about Bitcoin and all the crytpo stuff, when I read this document I was like, ‘wow, this makes a lot of sense to me.’ So, I was quite excited.”

Satoshi Nakamoto intentionally limited the complexity of transactions on the Bitcoin network and Vitalik‘s great realization was that if he designed an evolution of Bitcoin in a Turing complete programming language, it could potentially offer every conceivable digital service via the blockchain, from the stock market to building decentralized cooperatives. Dmtiry says the invention of Bitcoin had been a “huge leap” and that the next leap could only be built atop of it.

“For me, it really resonated as a very simple analogy, right?” He says, “Because I observed the growth of internet, it started with static HTML websites and it was all interesting, but very limited.”

“But, JavaScript came online and then all other scripting languages and things changed. So for me, it was very clear that Ethereum was the same magnitude of change as going from static kind of simple stuff to having Turing complete scripting, then the sky’s the limit.”

He adds further: “And yes, it‘s very complicated and risky and there are security issues and whatnot. But, you can do anything.”

Vitalik struggled as a public figure

Although Vitalik had the far sighted vision that turned into a cryptocurrency worth half a trillion dollars, explaining the concept and forging a coalition of like-minded people to help develop it forced him to become a public figure — a role that did not come naturally. “That was actually quite difficult for him,” Dmitry says.

“I could see that and he struggled, especially the first couple years because he is a person who has a, if you will, very kind and sensitive nature — well meaning. And he‘s like, ‘Oh now I’m trying to do this and why are all these people building these websites which ridicule me?‘”

But, he adds that the challenges helped Vitalik to grow in emotional intelligence.

“Through all the public speaking and interacting with so many people and all the traveling that he has done, now the world can see much more of the Vitalik that I know and his family knows: This very kind, sensitive and fun guy versus just kind of some smart guy with a lot of smart ideas talking about blockchain and stuff.”

Back to the beginning

Now a successful businessman who semi-retired in 2017 after the SaaS business he founded, Wild Apricot, was sold, Dmitry says it was obvious from very early on that there was something unique and special about Vitalik. Dmitry, being of a philosophical bent, would no doubt add that there‘s something unique and special about every child, but Vitalik was in a category of his own.

His birth in 1994 had been something of a happy surprise. Dmitry was a 21-year old student at the time living in Kolomna, Russia with Vitalik‘s mother, Natalia Amelineas, as the former Soviet Union fell apart. While Dmitry had himself been a bright child who had learned to read by three and a half, he says Vitalik began reading “quite a way before that.”

But, great gifts come with their own issues, too, and Vitalik took longer than usual to become comfortable with speaking.

“It was kind of obvious that he had some really interesting capabilities,” says Dmitry.

“But also, every child who has very powerful brain has all kinds of other things like nervous tics and things like that. So, there are a lot of things that to deal with — their communication is different.”

When Vitalik was six, Dmitry, his new partner Maia and former wife Natalia all moved to Canada in search of a better life.

The move to the other side of the globe threw the young Vitalik into a strange and unfamiliar territory. Until then, Vitalik had been mostly raised by Natalia and Dmitry, along with her parents.

“They helped out a lot, but they were adamant about not sending him to childcare. So, when he arrived to Canada, he had to go childcare in different language and whatnot. So, it was a big and somewhat painful transition for him.”

this is so weird, cringy and silly, so lovely! https://t.co/foJ4qHbFDc

— Dima ButΞrin (@BlockGeekDima) November 29, 2021

Fast track to success

Vitalik‘s potential was noticed early on, and by the third grade, he‘d been placed into a class for gifted children where he began to develop his interests in mathematics, programming and economics. The young Buterin was able to add three digit numbers in his head “ten times” faster anyone else. People started to refer to him as a math genius by grade five or six.

A seminal Wired profile from 2014 described him as autistic wunderkind who had learned to speak fluent Mandarin in just a few months: “Which is bullshit,” notes Dmitry. It “took much longer.” Co-founder Joseph Lubin (later of ConsenSys fame) described Vitalik at the time as “a genius alien that had arrived on this planet to deliver the sacrosanct gift of decentralization.”

Like other highly intelligent people, Dmitry says Vitalik understands the world in a different way to the average person, which affects how they interact and socialize.

“When you‘re smart, your mind is much better at creating models of everything and forecasting different things,” he says. “And, that works quite well about a lot of things. But, it doesn’t work that well with humans:”

“You‘ve become way too reliant on your thinking mind and not so much on your sensing mind. Your thinking mind, however powerful, will mess up because human emotions are infinitely more complex than with any kind of analytical model you can imagine.”

Despite this challenge, he says Vitalik started to come out of his shell when he began attending a private high school called Abelard School.

“I think that he really blossomed when he went into high school,” he says. “He went to this little private school that made a big impact on him, he really opened up.”

But, the Vitalik we now know was really born online. He may be called a Russian-Canadian on Wikipedia, but he was raised as a product of internet culture.

“He actually learned how to connect with people online and build the connections and whatnot,” he says. “And, that‘s kind of when he entered the whole crypto and Bitcoin space.”

“He actually developed a lot of relationships online with other enthusiasts,” says Dmitry. “And that‘s another way we use social skills, just in a very different way than in face to face.”

Enter the Bitcoin

Dmitry is reluctant to take credit for his son‘s successes, but he certainly played a key role by introducing his son to Bitcoin. He first tried and failed to get his son interested in hacking, which he describes as “how do you take a complex system and make it do something else that it wasn’t designed to do?”

Part of the father-son dynamic was that whenever Dmitry got interested in something, he liked to try and pass it on to Vitlaik.

“Vitalik also has a very curious mind. So, all of my life, especially as he was growing up, I‘ve been just trying to feed him a lot of interesting things and see what resonates.”

Dmitry himself learned Bitcoin after hearing about it on a cybersecurity podcast in 2011.

“I‘m like, oh, wow, this definitely sounds like very interesting technology that has some potentially big implications. But, I cannot say that, at the time, I‘ve had really much clarity about how big the implications of that were,” he says.

As a self professed “techno optimist,” Dmitry has always been fascinated by technology and feeds his range of interests — from AI and futurism to libertarianism and spiritualism — through voracious reading.

One formative influence was the scientist and inventor Ray Kurzweil who “wrote a bunch of books about the progress of technology and made a bunch of very optimistic forecasts about the future.”

“He was one of my biggest influences in my early 20s. When I read his books, I actually gave them to Vitalik as well. Recently, I ended up getting in touch him through some friend and he actually sent some of his books that I read with Vitlaik 15 to 20 years ago. He sent signed copies to me, which was nice.”

When it comes to hacking, Dmitry explains that he failed to get Vitalik interested in the concept, as other things were more appealing. He passed copies of the Hacker Quarterly ‘2600’ Magazine to him, as well as books by the famous ‘90s convicted hacker Kevin Mitnick, who spent two years on the run from the FBI.

“He didn’t really get interested that much in hacking as such, but the cryptography really resonated with him. And you know, he read a whole bunch of books about cryptography and the math behind it. So, when I told him about Bitcoin, it was a very fertile object for his mind to chew on, if you will.”

While his 17-year-old son initially dismissed the concept of a currency with no intrinsic value being doomed to fail, he came back to it after quitting his World of Warcraft obsession when he needed something else to occupy his time.

Being a penniless student, he couldn‘t afford to buy Bitcoin or mine any, so he began writing posts for a blog for 5 BTC per article. This led to a gig as a head writer for Bitcoin Magazine, which he juggled while studying five advanced courses at the University of Waterloo and working part time as a research assistant for a cryptographer.

It was as a journalist that he covered a Bitcoin conference in San Jose California in May 2013, where the Winklevoss Twins and others talked up this new tech revolution as something that could be as significant as the birth of the internet. Excited by the potential, he decided to embrace the opportunity with both hands and drop out of college at the end of the semester to pursue it full time.

Dad, I‘m dropping out

Dmitry recalls the day Vitalik visited to tell him of the plan.

“I actually do remember that day when he came from university. Actually, his mom was in our house visiting, so when he came in all three of us were here, myself, Maia and Natalia. And then he mentioned, ‘Hey, guys, I‘m actually thinking of dropping out,’” he says.

“And it was really interesting. All three of us had a very similar reaction that we supported him because we all knew that he‘s a very bright wonderful young adult and, if he drops out, he will be totally fine.”

“So, he dropped out and went for the whole trip around the world and got involved with a bunch of things.”

Dmitry met Vitalik‘s step mom Maia in Russia in “1995 or 1996.” The pair got married in 2004 but separated a couple of years ago. He says she played a big role in Vitalik‘s upbringing.

“Maia was a huge influence on Vitlaik because he was growing up with the two of us mostly and then he was seeing his mom regularly whenever she was able to visit Toronto,” he says, adding that she later moved nearby, so they saw each other often.

Dmitry explains that it was essentially as if Vitalik had three parents.

“Pretty much, it‘s nice. I think it was a couple of years ago when we were having some kind of family dinner, and Vitalik was here. He stood up and said that he is really grateful that in his life he has so many awesome people close to him and he said ‘I have my mom and I have you Maia,’ I don’t remember the words he used. But, you know, he was very genuine and very sincere.”

Read more: Meet Dmitry: Co-founder of Ethereum’s creator Vitalik Buterin

Meet Dmitry: Co-founder of Ethereum’s creator Vitalik Buterin

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Just recently, NFT collector CryptoNovo was posing for hundreds of photos, taking meetings with top tech companies and attending scores of invitation-only parties across New York City.

Today, the former-schoolteacher-turned-Metaverse-mascot is raking leaves in his suburban Illinois front yard.

“Dude,” Novo remarks excitedly as he works, “That just happened.”

That would be NFT.NYC, the early November conference/gathering/bacchanal that represented a coming-out party of sorts for the nonfungible token community.

While NFT.NYC 2021 was the third event in what will almost certainly become a series of (at least) annual affairs, it represented an explosion in popularity over the 2020 offering. Ticket sales jumped. Additional days were added. NFT.NYC ballooned to a four-day extravaganza at which Quentin Tarantino, Chris Rock and The Strokes, among others, made appearances.

Among the big names, NFT enthusiasts and curious passersby crisscrossing Times Square that week, CryptoNovo stood out. Many NFT initiates knew who he was, and while NFT novices had no idea who he was, they seemed to instinctively understand that even at this event, this guy stood out.

The collection

CryptoNovo holds a collection of NFTs that is currently valued at $4 million. Meebits. Bored Ape Yacht Club. Adam Bomb Squad. World of Women. Many others. And, of course, CryptoPunks.

Novo owns nearly $2.5 million worth of CryptoPunks alone. One of them, however — CryptoPunk #3706 — stands out from the others.

Not because of its monetary value, but because Novo actually uses it as his face, strapping an LED digital mask to his head that completely covers his actual features.

For Novo, NFT.NYC was yet another leg in what has become the ride of his life.

“I had friends come out to New York with me who didn’t even have any NFTs,” Novo recounts. “They figured they’d sleep on pull-out couches in my hotel room and maybe come around with me and see New York. Suddenly, they’re on this million-dollar ride, this Entourage-type situation. We’re getting into clubs without paying a dollar. All of the access is based on NFTs in my collection.”

“We’re rubbing shoulders with famous and semi-famous people who love us for the stake of value that we put into the community. When it was finally time to take off the mask and get on the plane home, it was weird.”

We may live in a world in which Elon Musk named his child “X Æ A-Xii,” but CryptoNovo is not, in fact, Novo’s real name. What began as an online handle has evolved into, well, a full-blown persona.

The story behind that persona begins with Novo’s journey to the world of NFTs, which he considers to be a typical one.

“It goes back to toys for me. When I was a kid, I didn’t get toys all the time. Birthdays, holidays — that was it. For me, toys were something to keep track of and protect. As I got older, that evolved into collectibles.”

The collector

Novo collected rare comics, unopened Star Wars Lego sets and everything in between. Like many collectors, he viewed the emergence of cryptocurrency with less skepticism than most: Here was something that, in addition to its intrinsic value, could be valued, bought and sold the same way a baseball card could be. One day, during a cryptocurrency conversation in 2019, a co-worker mentioned NFTs. That was all it took to get Novo hooked. “I realized that we were looking at a new frontier, not just of currency but of collectibles.”

Novo threw himself into the NFT space with fervor, becoming a fixture on NFT Discord and surrounding himself with, as he puts it, “the smartest people in the space.” Noted ground-floor NFT collector Tony Herrera taught Novo NFT basics such as getting a MetaMask wallet, transferring ETH into it, getting an ENS name, and actually buying NFTs and posting them for sale. Novo met NFT creators such as the influential artist and collector Pranksy. Novo asked questions, took notes, and offered help and input whenever he felt that he could.

Eventually, Novo arrived at the moment that he is perhaps most well-known for in the NFT world: his rags-to-riches purchase of an NFT known as the “Pranksy Hoodie.”

“I was a teacher,” Novo begins. “I didn’t have money to be dumping into NFTs left and right. I set aside one paycheck to invest, and I couldn’t really go over that. I couldn’t afford an Alien, an Ape or a Zombie [three of the most elite, rare CryptoPunks], I couldn’t afford a Beanie, etc. So, I started looking at another class [of CryptoPunks]: the Hoodie. There were more of that class, but they were statistically still pretty rare. But I wasn’t interested because of that. Art is in the eye of the beholder, and I liked the Hoodies.”

“What I have been building since the beginning,” Novo continues, “is friends. I contacted Pranksy directly. I offered him 1.24 Ethereum for a Hoodie he owned. He countered with a slightly higher amount. I basically had to come back and say, ‘Look…1.24 is literally all I can afford.’ He was able to see my wallet on the public blockchain and know that I was telling the truth.”

This was not, Novo stresses, a good deal for Pranksy — but Pranksy agreed to the sale, largely because of what Novo believes to be Pranksy’s faith in Novo’s desire to promote the NFT movement itself. It was almost, Novo says, as if he was buying the NFT not just with 1.24 ETH but with himself.

In any case, the transaction was made. The cost to Novo equated to roughly $400 at the time.

Savings and wise investments

“Then, I held on to it. I watched it become a primer and primer asset. It was known as ‘The Albino Hoodie.’ It had a certain look. People wanted it. Honestly, I wasn’t as focused on that. I’m busy trying to do right by Pranksy, for believing in me. I ended up helping him give away 150 CryptoPunks in a raffle that turned into a major event for him in terms of publicity and just for all of us in terms of growing NFTs.”

As Novo interacted with more and more digital artists, his view of NFTs transformed. Initially, he had thought of NFTs as assets — the right Bored Ape avatar could become his equivalent of a Mickey Mantle rookie card. Today, though, his explanation of NFTs starts not with collectors but with creators.

“Think about just how many times the poop emoji has been used since it was created. Someone made that emoji, the same way someone makes any piece of art. But who has made the real money off of that emoji? Big corporations? Was the person who created that simple piece of art the one who profited?”

He cites elements in video games that make hundreds of millions of dollars and points out that famed NFT creator Rare Diamond Hands works at a massive game company as a digital-hand designer for first-person shooters. Novo believes Rare Diamond Hands is probably not being properly compensated for his skills at his job, but he now creates NFT images of hands holding diamonds — a nod to the Metaverse’s respect for “diamond-handed” collectors who never sell their NFTs.

“Anyone who purchases one of those images knows that they have exclusive rights to a hand designed by one of the elite video game artists.” The point, Novo emphasizes, is that regardless of what someone is willing to pay for a Rare Diamond Hand or a Bored Ape, that money is money that the artist who created the NFT deserves. For Novo, NFTs represent opportunities — for creators, for collectors, for businesses, for everyone.

Mindset of a cheerleader

This mindset had crystallized for Novo by mid-2020, and it changed his life. He became one of the biggest cheerleaders in the NFT space. He hosted online video interviews with NFT creators using Restream. He tweeted constantly about every piece of NFT news. He offered help and information to every new acolyte in the Metaverse, even dubbing his own specific corner of that world the “Novoverse.”

“It’s been a grind. I’ve been producing content in some capacity every single day for over a year. Can I introduce this person to this person, knowing that they have a common understanding and can accomplish something bigger together?”

Novo can’t resist using the kind of on-the-nose reference that one might expect from an NFT loyalist: “Can I open the door for more Neos in this Matrix?”

In The Matrix, Neo’s mentor, Morpheus, is known for his iconic sunglasses.

In the land of NFTs, Novo has his mask.

For as long as he has been a figure in the NFT world, Novo has been using digital photos and “AR filters” — augmented reality images that superimpose over real-life video — to replace his actual human face with a projection of CryptoPunk #3706.

As Novo became more and more involved in the NFT community, in-person interactions — both business and personal — became a reality. Novo’s response was to bring part of the Metaverse into reality. He purchased a face-worn digital mask that could display CryptoPunk #3706. He had a friend’s mom knit him a hat identical to the one worn by his avatar. He bought a suit that would look very much at home on a 1960s Batman villain.

Suddenly, a physical education teacher from Illinois effectively became a Daft Punk robot for the NFT space.

New York

In New York, Novo was constantly approached by excited friends — “My Aliens, Apes and Zombies,” as Novo calls them — who had only interacted with him online. A New York Times reporter interviewed him for 45 minutes (though he was cited in the resulting article simply as “the owner of CryptoPunk #3706.”) Novo gave a raucous speech at an NFT.NYC town hall that ended with him dropping the mic and high-fiving his way out through the crowd toward the exit.

Everyone wanted a photo. Whether they knew him as CryptoNovo or simply as “that goofy-looking robot-man on the sidewalk,” New Yorkers seemed to see Novo as a “piece” of the event. A banner, a mascot, an indicator: Something different is happening here. All of this was fine with Novo, though he does worry about anything that could contribute to negative stereotypes of either the event or the NFT movement itself, including a simplistic “robot mascot.”

“On one hand,” Novo offers, “Any kind of discussion is going to onboard more people, and having a discussion — negative or positive — will drive conversation and allow people to come to their own conclusions. Ninety-eight percent of the people who read an article about NFTs have no clue what an NFT is. If my glass is always half full, their glass is empty. I want to fill it. So, I’m always happy people are talking.”

On the other hand, Novo explains, he chafes at two conceptions: that the NFT movement is composed of “a bunch of crypto bros” and that it is about making a quick buck.

“When I showed up in New York for NFT.NYC, I had hundreds of people I was expecting to interact with who I’d never seen before. Maybe I had tweeted with them, or had them on my Restream show where they had an AR filter on.”

“Honestly, I was stunned by the diversity. I’m posing for all of these pictures, and it’s such a mix of gender, of ages, of cultures. And I’m realizing, ‘This community is everyone now, and everyone is bringing their unique aspect to it.’”

Crypto millionaire

The second conception is a little more tricky for Novo to tackle. After all, he is near the head of the line of NFT “early adopters” who have made real money.

One day, someone contacted Novo on Discord, asking if he’d be willing to sell the Pranksy Hoodie. Novo keeps the buyer anonymous, but not the offer: 350 Ether.

Both NFTs and cryptocurrency had recently skyrocketed in value.

Novo was being offered the equivalent of $1.07 million for his Hoodie.

“I had already realized I was going to have to sell some of my NFTs just to cover taxes,” Novo admits. “And, um… that’s a lot of money there.” He made the sale.

“Here’s what I don’t like,” Novo quickly continues. “Any time I tell this story to anyone who isn’t already in on NFTs, at this point I feel like I’m damned if I do, damned if I don’t.”

Novo is referring to what he did, or rather, what he didn’t do with his million-dollar windfall in cryptocurrency. He didn’t cash out — not most of it, anyway. He almost immediately reinvested in another Hoodie of lesser value that he felt he could get at a bargain price.

“So, let’s think about this,” Novo levels. “If I put my money back into our community because I see value, but mainly because I believe in the power of this movement, then I’m an idiot because this is all a big bubble that is going to collapse, according to people who aren’t actually a part of this. But if I do cash out, then I’m just another bro who’s only in it for the money. I’m going to be stereotyped either way.”

“I just have to believe,” Novo finishes. “Stories like this are going to make more people really see what’s going on, and those people are going to get it, and that’s going to grow our community.”

Explaining what’s going on, by the way, is now effectively Novo’s full-time job.

Earlier this year, Novo finally reached a crossroads. He had received offers to work full-time in the NFT space, and he sat down with his wife to discuss a career change. Fortunately, his wife — an advertising executive — believes in the power of NFTs as a new force in both technology and the marketplace. She encouraged him to make the switch.

Today, Novo is, for lack of a better term, an “ideas man.”

“It’s calls,” he laughs. “Lots and lots of calls — but fun calls!”

The business of NFTs

NFTs, Novo explains, are a space that the business world wants in on but doesn’t fully understand. Novo often helps businesses find pathways to meaningful NFT involvement. One day, he might be connecting a blue-blood corporation with a promising digital artist. Another day, he might help a major hotel chain understand just what is possible in terms of a Metaverse-themed resort.

Novo believes that anyone — from a major corporation to a struggling artist — who treats NFTs not as a novelty but as a vehicle to truly add something to the NFT community will be rewarded with brand loyalty. Some producers or collectors will strike it rich, but the space itself will be transformational — an entirely new landscape in which all people can interact, gather and, yes, profit.

This, of course, is the kind of rose-colored premonition you might expect from someone who regularly sits in boardrooms while wearing an NFT on his face. 

“Yeah,” Novo admits. “I’m a true believer. But I don’t think it’s just me. I think the evidence is right there for anyone who actually looks.”

Novo mentions a podcast he listened to recently. “The same reporter who interviewed me at NFT.NYC was on it. He said that NFT.NYC was celebrities, scene people, hackers, artists, venture capitalists, libertarians and more, all mixing together. He said it was really weird. Sorry, but that doesn’t sound like ‘weird’ to me.”

“That sounds,” Novo opines with typical optimism, “like everyone.”

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