9 Benefits of Being Paid in Bitcoin
Not too long ago, I sent an email to Amazon, asking them why they couldn’t pay their associates, who are part of their affiliate program, in bitcoin. And then it struck me how backward a lot of companies are when it comes to paying their employees.
They opt for cheques, which are so antiquated and not to mention risky. I’ve had pay cheques go missing in the post.
PayPal can be difficult to set up, at least in my experience. In SA at least, you need a credit card or dheque card to do so.
People can be paid by direct deposit, but often that isn’t available to people outside certain regions. Then there’s Payoneer, but it’s too costly, especially if you live outside the US.
Gift cards are fairly useless when they are for stores overseas, which will see you paying exorbitant amounts in shipping fees (although you can try to exchange them, but it does carry a risk, and you also lose some of even most of the value too).
Bitcoin is a better option for being paid, and I think companies should hurry up and adopt it in order to pay their employees, not just as a way for consumers to pay for products they sell.
Here are a few reasons why:
Low transaction fees
The transaction fees are low with bitcoin. Exchange fees (particularly from one cryptocurrency to bitcoin) are low, and fees to transfer from one account to another are low. There are no fees for receiving bitcoin as a deposit in a wallet or bank like coinbase, and there are no monthly or annual account fees to worry about either.
There are no costly fees, like with cheque deposits and courier fees (before they introduced payout via EFT, I often got my Google AdSense cheques sent by courier instead of regular mail because I don’t trust the post office) or PayPal, especially to withdraw from a PayPal account to a bank account.
If you use ChangeTip to send payments, there are absolutely no transaction fees attached!
No banks necessary
You don’t need a bank account to receive bitcoin. You just need an email address and/or a bitcoin wallet and you can start receiving bitcoin instantly. Or you could even use a paper wallet.
No currency conversion
You don’t have to worry about converting a person’s pay to a specific currency.
And if you send a payment in bitcoin to someone, they don’t have to worry about currency conversion, which with a cheque as a standardised fee can end up costing the person more than the cheque is worth!
Quick and easy
Bitcoin deposits to a person’s wallet or account with a bank like coinbase do take some time to clear. It takes about an hour for coinbase to get the 6 necessary confirmations before the bitcoin is available to you.
This is preferable to waiting days for funds to be transferred to a bank account, or days waiting for a cheque deposit to clear.
Buying with bitcoin is also decidedly uncomplicated in comparison to buying with a credit card or other methods of payment. Try buying on Humble Bundle with bitcoin: as long as you’re logged into your coinbase account, it’s one or two clicks and you’ve made a purchase. And I haven’t ever had a purchase with bitcoin fail for whatever reason – I can’t say the same for credit cards.
An account at coinbase is more secure than most bank accounts. It has an option to confirm logins when they arrive from a different device/IP address, and it also has 2-step verification by SMS or app. Most local banks provide neither of those with their online banking portal – just a regular username and password!
There’s no card attached to a bitcoin wallet either, so nobody can steal your card details or the card itself like with a regular bank account and clean you out. As long as your email and wallet passwords are secure, you should be fine.
If you want to take it one step further, you can opt to not have your bitcoins in an online wallet. You could store them in a bitcoin bank and from there put them in a vault, or you could transfer them to an offline wallet. You could even back up that wallet and put it on a flash drive or an external hard drive and stash it away in “cold storage”. You could even use a paper wallet as I mentioned earlier on.
With bitcoin you have more of a choice as to what to do with your money. You can leave the bitcoin in a wallet or a bank, or you can exchange it for another currency, even fiat currency (US Dollar, etc.). You can buy with it online without the need for a credit card or any complicated purchasing procedures. Or you can just let it sit in your wallet.
An investment opportunity in itself
With bitcoin, if you do decide to hang on to it, it can be worth your while. There are no transaction fees to receive or hold bitcoin in a wallet or a bank. So no account fees to reduce your capital. Because of its volatility, the value of bitcoin can go down, but it can also go up. Right now 1 BTC is worth $240, but in late 2013 it was more like $1200! Bitcoin is the gold of the digital age. You just have to know when to sell.
By comparison most banks nowadays don’t have very favourable interest rates that beat inflation, especially if you’re young. If you are over 55 and heading towards retirement, you might get a decent interest rate, provided you opt for a long-term investment, and aren’t going to touch your money for several years. But that just isn’t realistic for most young people.
There was an interesting article that was featured on the ChangeTip blog recently, where the author claimed that he pays his 13-year old son’s pocket money in bitcoin. Then it’s up to his son when he wants to cash out. When the amount in his wallet reaches a certain amount, then he can approach his father for the money, and I assume give the bitcoins back, which can then be “reissued”.
I suppose when his son reaches 18 or so, he could then take the bitcoin to an exchange or bitcoin bank and get money from the exchange instead of his father! He could even just spend the bitcoin without converting to cash, or just sit on all the BTC his father gives him and cash out big time in years to come – of course it could go way down in value, but let’s hope it doesn’t, right? Especially for his sake.
You know how much effort it can require to open up an account at a regular bank, what with all those forms that need filling out, etc.? There’s virtually none of that with bitcoin. Creating a wallet or opening up an account with a bitcoin bank takes only a minute or two, and usually only requires an email address and a password.
Anonymity & Privacy
The only things that need to be attached to a coinbase account are a name and a phone number (for 2-step verification). You don’t have to put in a street address, or anything like that to send and receive bitcoin, or even to buy items with bitcoin (although you may need to fill in information on the website you’re buying from — it varies from place to place).
You would have to fill in personal information if you wanted to buy bitcoin through coinbase though, but that’s only available to US customers.
Bitcoin exchanges are different for the most part, because they often do require more information, but you could always opt to buy/sell privately.