Living as a Digital Nomad With Help Of Cryptocurrencies
Living the dream: 100% Freedom — 0% Taxes
Always Follow Your Dreams
To read a specific book can literally change your life. I will never forget how I, in the age of 14/15, read a book called ‘Wir nennen es Arbeit’ (english: ‘We call it work’). It is a book about how the digitalization of our world will lead to a new way of living: Working self-employed, remote, from where ever on the world you want.
I founded my first business (SEO Consulting) back in 2008 when I was 15 years old. Obviously, to travel the world and work remote was not feasible back then. Temporarily, I forgot about my dream but re-discovered it when I entered cryptocurrencies in early 2017. An industry which is fully connected online, all over the world, working and collaborating together. It was clear for me that this dream, living as a digital nomad, will become reality for me.
In summer 2020 it was time. A bit influenced by the lockdown-policies in my home country Germany, I decided to just leave and live abroad as a digital crypto-nomad. Yet, this was not enough for me: I did not just want to travel the world. I also wanted to pay no more taxes for the time I am travelling — and I don’t today.
My travels brought me from Germany to Albania, Greece, Mexico and Ecuador.
In this article I want to share my experiences and explain how you can also live like that: 100% free, 0% taxes.
What is a Digital Nomad Exactly?
The term ‘digital nomad’ was first used in the book ‘The Digital Nomad’, by Tsugio Makimoto and David Manners, in the year 1997. A lot has changed since then. New technologies like a fast internet and VoIP made it possible to not be tied to an office.
Digital Nomads are using this for their advantage: While they work for 2 months on a beach in Costa Rica, the following months they could be in a completely different country — what ever suits you best, you can do it!
Digital Nomads are most times young professionals from various industries in the age of 20–35. Exceptions confirm the rule. I have met a lot of them in the last year, a lot of Online Marketeers, Webdesigners, Translators, but also Business Developers and Head Hunters — as long as you can work remote you have a great advantage.
Remote Income: The Perfect Solution
Also, Crypto traders can obviously work remote and trade from where ever they want as long as they have stable internet and elictricity. However, for traders (without an immense bankroll to cover losing streaks that can last longer than most would expect) it is a problem to depend on short-term trading gains.
In the ideal scenario you have a job, or multiple smaller freelance jobs that cover at least your regular travel and living expenses. How you can do this in the cryptocurrency industry is described in this article that I published recently: How to make a living with working in the cryptocurrency sector.
How Can One ‘Pay’ 0% taxes?!
Yes, it is true, I am paying 0% capital- and income-tax currently. No, I won’t have to go to jail for this: Everything is perfectly legal. Yet, not for anyone it is an easy thing to do, as it was for me.
I am German. In Germany you can sign-off from the country and give up your permanent residence. Then, you are basically ‘out of the system’: German tax laws no longer applies to you. Federal health insurance no longer applies to you. All kind of costs — no longer apply to you. Still I am a German citizen and could go back at any time, if I wanted to do so.
The obvious question is now: ‘But do you not apply to tax laws in other countries?’ — the answer: No, as long as I am travelling with a tourist visa to different countries worldwide and don’t setup a permanent residence/living non-stop (more than 50% of a year) in the same country, foreign capital gains and income tax laws won’t be applied.
However, this crucial part, the signing-off in your home country to escape tax liabilities, is not so easy in every country. For example you are being taxed as US-Citizen when you want to sign-off and leave the country for a longer time, as I heard. I can not research every country — your local gov websites should hold all infos you need; when in doubt, consult a lawyer/tax consultant, it is worth it.
‘Crypto Nomad’: How to Use Cryptocurrencies in Your New Life
Cryptocurrency Payments Abroad
In most countries there are still no options at all to pay in stores, restaurants or other venues with Bitcoin or other cryptocurrencies. So you should never think you could rely on paying your coffee or beer with BTC, as long as you are not in El Salvador; the first country that recently implemented Bitcoin as legal tender.
There are other options, however, a major one is clearly Bitrefill. Bitrefill was already started in 2016 but got more traction when it received an investment in 2019. Goal of Bitrefill is to make living on cryptocurrency possible!
This is achieved via gift cards for thousands of companies that you can top-up via your mobile phone with BTC. Also accepted: Litecoin, Ethereum, Dogecoin, DASH. The service is available across 170 countries with more than 1,500 vouchers; the availability of each voucher is depending on your location.
In case you are looking for a solution to pay for selected hotels and flights with cryptocurrency you can do so on Travala.com.
Converting Cryptocurrency to FIAT
When you work in the cryptocurrency sector you are often paid in cryptocurrencies. Personally, basically 100% of my income currently is paid in cryptocurrency. No FIAT.
While I am relying mostly on OTC (over-the-counter) cash-deals through my own global network which I have built over the years, there is also the option to use debit cards like the one from Crypto.com, WireX, in Germany Bitwala, or others. You have to check for your home country in advance. Here a good list with Bitcoin Debit Cards. Personally, I don’t have a bank account right now.
Do Not Forget Your Health: Health Insurance For Digital Nomads
When you sign-off in your home country and go travelling you have to take care of your health insurance yourself if you don’t want to end up with a six-figure bill you have to pay yourself in case of an emergency.
There are two international health insurances I can recommend. Both are made for digital nomads & expats, varying a bit in what is covered and what not and the price: Foyer Global Health & SafetyWing. I am using the latter one (premium plan includes coverage in your home country) and feel fine with it.
Favorable Countries For Crypto-Nomads
To be honest, when I am getting asked what the ideal countries for crypto-nomads are, I have to pass. Your goal is to be NOT part of any system, at all. Most countries don’t care how you make your money while staying in their country as a tourist; why should they, they are happy you are there.
Cryptocurrency regulatory aspects are just getting important if you plan to settle somewhere; then, yes, you should check all frameworks to not getting your hands cut off when dealing with cryptocurrencies.
‘Lesson learned’: Do’s and Dont’s While Being Abroad
A few random things that you should and shouldn’t do:
Learn new languages: It is not just beneficial for your brain but also has advantages in dealing with locals. Not everyone speaks english; and they will appreciate it when you try to speak their language. Best way to make fast contacts in new countries if you speak a few words.
Explore: Don’t stay in your home office all the time, go out and explore the environment. Nothing worse than knowing you missed to do certain things after you travelled thousands of kilometres to an other country.
Engage: Go to cultural events and meeting points like regular markets; always a great experience, do it!
Leave a tip: When you are making multiples of the avg salary of someone in the country you are visiting — leave a hefty tip in coffeeshops, restaurants, for delivery guys, what ever. They will be thankful! A few Dollars can make a huge difference in everyday life of most people on this planet.
Rentals: Ask locals for monthly rentals, often you will get much better prices for better rentals than on Airbnb. Also: Book a few days in an Airbnb you like, and if it suits you make a deal outside of Airbnb with the owner.
Avoid flashing money: What ever you do; when you are in (poorer) countries or countries where you don’t know anyone — don’t show off, don’t flash money or somebody will ‘take care of it’, so to say.
Stay away from risk areas: Especially when you are travelling in South American countries, there are certain areas in each country where a normal, avg citizen better doesn’t show up.
Don’t marry your destination: I experienced it several times now; ‘I love it here, I want to stay!’ — just to travel further to an other country to experiencing the same; in loop, always continuing. There are so many great places on this Earth to visit, don’t limit yourself after a few weeks/months.
Conclusion: If You Want it, Just do it!
In all seriousness: This decision I have made last year was the best decision ever in my life. I saw many amazing places and things, learned new languages, met a lot of cool people and also made friends.
We live in uncertain times anyway. Why not dare something?
If you want more freedom, you must also be prepared to have less security — a simple basic rule of life!