Violet Rollergirl’s cryptocurrency primer for providers

Sex workers of all stripes are increasingly using cryptocurrency, but there are many who still don’t. Maybe that’s because it’s unfamiliar, it confuses their clients, or they’re unaware of how to convert crypto assets into material necessities. If any of that describes you, then you’re in the right place.

Moreover, I understand that cryptocurrency has a reputation problem. It’s often maligned for social reasons (“cryptobros”), ecological reasons (“blockchains are killing the planet”), and political reasons (“money is made up bullshit and a tool of the oppressor”). I’m not going to refute these points, except maybe the second one; both of the cryptocurrencies I recommend are moving away from solely compute-intensive Proof-of-Work (PoW) schemes to ecologically-friendly Proof-of-Stake (PoS) schemes.

Ultimately, crypto is an undeniable win for me in my life and my work, so this series is for my colleagues who are willing to give cryptocurrency a chance.

In this article

1. Why I use cryptocurrency as a provider
2. Two kinds of cryptocurrencies: private and not private
   1. Zcash in a nutshell
   2. Monero in a nutshell
3. Self-custody or bust
   1. Self-custody comes with responsibility
4. What’s next?

Why I use cryptocurrency as a provider

Cryptocurrency is just digitized money. Don’t think about it like a technology. Think about it like a foreign currency.

Broadly speaking, there are two main reasons anyone uses money, sex worker or not. Money, including cryptocurrency, can be used for:

• a medium of exchange, i.e., you can use it like cash, to pay for things and accept payments from clients and customers.
• a store of value, i.e., you can use it like a bank account or an investment portfolio, to keep financial assets in a safe place, to trade it like stocks or mutual funds, or to hold onto it like a retirement plan.

Both are valid uses, but let’s be frank: most of us are poor. We don’t have large investment portfolios. We don’t care about the crypto stock market. We aren’t tracking the volatility metrics of a given coin or how strong the Dollar is against the Euro today or next week. We are mostly just trying to survive, and so we aren’t here to learn day trading strategies.

As a sex worker, I just want an easy way to pay for things (like my ads) and a private way for my clients and customers to pay me. Unfortunately, if we rely on traditional payment methods, which is often called the “fiat” economy, we are taking on a bunch of additional risks. These risks include:

• having our legal identity revealed (“doxxed”) to our client or customer
• getting banned from the payment app we’re using, or losing access to our bank account (getting “de-banked”) and having our funds in it frozen or confiscated
• having sales reversed (suffering “chargebacks”) by disgruntled, malicious, or scammy clients
• accidentally accepting counterfeit bills. It’s even possible for a client not to know a bill they gave us is counterfeit!

Using cryptocurrency correctly solves every single one of these problems. That’s why I use it.

Since cryptocurrency can function like digital cash, I don’t need to sign up to a big tech service or open an account at the cryptocurrency equivalent of a bank to use it. Since it’s not actually physical, but rather “mathematical” money, there’s no chance of a client giving me counterfeit bills or coins. For the same reason, once a client or customer sends me money in a cryptocurrency transaction, there’s no way for that sender to initiate a reversal or punish me with a chargeback.

There are also some additional benefits that using cryptocurrency has over fiat currency. I think the most awe-inspiring of these is how I can cross an international border with absolutely no physical device on my person, and yet still travel with all my money. In other words, cryptocurrency changes money from something you have (paper money) into something you know (a secret pass phrase). If you memorize your cryptocurrency wallet’s secret phrase, you’ll always have access to your money in a way that no one can take away from you, even if you’re traveling with nothing but your birthday suit.

Two kinds of cryptocurrencies: private and not private

Some of the above, like the way cryptocurrency makes counterfeits impossible (cryptographers would say, “mathematically infeasible”) is made possible regardless of which cryptocurrency you use. Bitcoin is the famous cryptocurrency, and it’s had this counterfeit-proof characteristic since its inception. But some of the other things I talk about above are only possible if you strictly limit yourself to certain cryptocurrency technologies that are broadly classified as privacy coins.

A privacy coin is a cryptocurrency that keeps transaction data secret. In such a transaction, the payment’s sender, recipient, and amount are known only to the parties conducting business together. No third party observer, payment processor, or other intermediary learns who’s paying you, that you’re the one being paid, how much you’re being paid, or what you’re being paid for.

Only privacy coins do this. In contrast, anyone with a Web browser can know everything about every Bitcoin transaction ever made, because Bitcoin works by broadcasting transactions publicly for the world to see. For obvious reasons, I don’t want to be doing that, nor do my clients. It’s the same reason we use encrypted messaging apps like Signal to communicate privately.

Put another way: privacy coins are to money what encrypted messaging apps are to speech.

Privacy coins are also called opaque ledger systems because they hide the contents of their accounting ledger. Non-private coins are therefore known as transparent ledger systems. While a transparent ledger system relies on everyone in the world having full visibility into all transaction data to solve some technical problems, privacy-preserving opaque ledger systems use math known as zero-knowledge proofs (ZKPs) to encrypt the details of each transaction so that only the sender and intended recipient know what’s up.

Once more: only privacy coins do this. The biggest misconception about Bitcoin is that it’s pseudonymous money, but nothing could be further from the truth. Bitcoin, Ethereum, and every other transparent ledger cryptocurrency is more like a public Venmo feed with no way to make it private.

There are a lot of privacy coins out there, but the only two that I’m going to talk about in detail are the two most reputable and proven ones, the ones I trust to keep my transactions private: Zcash and Monero.

Zcash in a nutshell

Zcash is the gold standard in cryptocurrency privacy technology.

It was also the first privacy coin to popularize the idea of using zero-knowledge proofs to encrypt cryptocurrency transactions. It was super slow when it was first introduced in 2016, but has since become faster and better in so many ways. Today, Zcash is in its sixth major iteration (called a network upgrade), and now uses a technology called zk-SNARKs, which is a funny name that stands for Zero-Knowledge Succinct Non-interactive ARguments of Knowledge, to massively speed up the computation required for the strong privacy guarantees it gives us.

A lot of people who have been in the cryptocurrency space for a while have a lot of bad information about Zcash, which stem from an outdated understanding of its technology and app ecosystem.

Most people who rag on Zcash will tell you that it’s “not private by default.” This is just not true anymore. They are saying this because Zcash actually supports both a private and a non-private mode. In Zcash parlance, we call this “shielded” (private) and “transparent” (non-private/public) addresses and transactions. Back in the day, most apps that supported Zcash’s currency token, called ZEC (the Zcash Electric Coin), didn’t support the shielded functionality, but that’s since changed.

Good apps like Zodl Wallet (formerly Zashi Wallet) exist that not only fully support and default to Zcash’s shielded mode, they also automatically convert non-private/public/transparent Zcash funds into their shielded/private equivalents. These apps also prevent you from spending unshielded funds, and some even go so far as to help protect your privacy from other deanonymization techniques by making it dead-simple to use the famous privacy-enhancing anonymizing proxy called Tor from right within the app.

Zodl in particular is made by the same team that built Zcash itself. It’s my favorite wallet app for Zcash.

Monero in a nutshell

The other privacy coin a lot of people like, and that I’ll use, is Monero. This is the bad boy of the privacy coin world, because it’s been the cryptocurrency most used by darknet markets and ransomware gangs. A lot of people think Monero is only useful for evil things, but that’s also like saying pencils are bad because sometimes people write hateful things with them.

In reality, Monero is just a privacy coin like Zcash, except it uses a different technology than Zcash to offer its privacy. Unlike Zcash, Monero uses a technique called Ring Confidential Transactions or RingCT, in which your transaction data is mixed with and hidden among a bunch of decoy transactions. This makes it harder (but not impossible) to determine which transaction is your real one and which is not.

There’s a famous saying in the cybersecurity world that goes, “security through obscurity is no security at all.” That’s why I personally like Zcash’s technology better than Monero’s. That said, Monero is “good enough” for me (for now) and getting better all the time.

Another famous saying in cybersecurity is that all good security measures have “defense in depth.” This pattern is sometimes called “layered security,” and in this case it means there’s an upside to using both Monero and Zcash together, if you want to, specifically because Monero’s technology is fundamentally different than Zcash’s. I think this is overkill for everyone except the most dedicated or at-risk individuals, but using two technologies that are different from one another means that if disaster strikes and one of the two is later broken, you’re still protected because you used the other, too.

My favorite app for Monero is Cake Wallet.

Self-custody or bust

Just like there are two broad kinds of cryptocurrencies you could use (private or opaque ledger, and not-private or transparent ledger), there are two broad categories of cryptocurrency apps you can use: self-custody (or non-custodial), and third-party (or custodial) crypto apps.

The concept of “custody” in cryptocurrency refers to who keeps your money for you. Either you do, self-custody, or someone else does, third-party custody.

Unfortunately, both types of crypto apps will call themselves “wallets.” Calling an app a wallet makes it sound like your crypto-money is in your own pocket, just like putting paper money inside of a physical wallet means you have it immediately available to you because it’s on your person.

In reality, only self-custody/non-custodial wallets do this. Third-party custodial wallets, such as those offered by CashApp, PayPal, Venmo, Coinbase, and many others are actually nothing like wallets.

To understand a third-party custody so-called “wallet” app, the appropriate metaphor to use is that the app is a teller window or an ATM machine. Your money is not really on your phone at all, but actually in some bank vault to which you have no keys. To access your money, you must prove your identity to the bank teller or the ATM machine, which makes a determination about whatever evidence you presented about your claim to the portion of money in their vault you’re requesting. That determination may be favorable to you today, but not tomorrow.

That’s why third-party custodial crypto apps are just as risky to use as a traditional bank or fiat payment service. There’s simply no technical gaurantee you can cash out when you ask them to please let you spend the money you previously gave them custody of. Because it’s not a wallet; it’s a bank account.

I don’t trust third-party custodial “wallet” apps. I don’t have them. I won’t use them. I’ll never recommend them for sex workers, although clients can still safely use them to pay us. (See my cryptocurrency guides for clients to learn more about that side.)

Self-custodial wallet apps are the way to go. Using a third-party custodial wallet re-introduces most of the risks of the traditional financial system. Put another way, self-custodial wallets are the only sure-fire way to protect yourself from suffering chargebacks or getting doxed.

Both of my favorite wallet apps mentioned above, Zodl (for Zcash) and Cake Wallet for (Monero and Bitcoin), are examples of self-custodial wallets.

Self-custody comes with responsibility

Self-custodial wallet apps are one of the most empowering advances in digital money. But with great power comes great responsibility, and self-custody wallet apps do come with a tradeoff, the same way physical wallets do.

If you lose your self-custodial wallet app, you lose your money. The way to protect yourself from this is a backup. You can safely back up your wallet app to your Google Account or Apple iCloud Account, because good wallet apps will encrypt your wallet data to your phone’s unlock PIN or passcode. But the best way to protect yourself from losing your money is to store your wallet app’s “secret phrase,” perhaps even storing it in your mind (memorizing it), so that you can regenerate it later.

I’ll talk more about that later when I discuss wallet app backups and recovery phrases, but for now the important thing to know is that unless you’re using a self-custody wallet app, you’re actually giving the third-party service direct access to your money, just like a regular bank account. This defeats the point of crypto, for me, so I don’t really listen to much anyone has to say about them.

What’s next?

Hopefully, this gives you enough of a foundation to understand why I use cryptocurrency and why you might want to, too. By sticking to privacy coins like Zcash and Monero, none of my financial transactions can be linked to my real-world information. By avoiding third-party custodial wallets and services, I never need to show my government ID to a banking institution, and I’m protected from chargebacks because I am effectively my own bank. And using cryptocurrency in the first place protects me from counterfeits.

The biggest downside to cryptocurrency is that it’s still not used by the majority of clients or customers, and it’s still not accepted by most civilian businesses to pay for ordinary things. Slowly, both of these things are beginning to shift and in the meantime there are an increasing number of ways to spend your hard-earned crypto on “real world” stuff.

As more providers learn to accept and use cryptocurrency, we can accelerate a crypto-native economy while getting more clients on board, too.

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