Forget about cash. Pay me in bitcoin

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As cryptocurrency is accepted, more and more people compete for their paychecks and other perks in bitcoin, Ethereum, and other digital currencies.

Famous athletes, politicians and ordinary employees now receive all or part of their salary this way.

“Whether you’re the Green Bay Packers quarterback or driving Uber, you can get paid in bitcoin,” said Jack Mallers, CEO of Strike, a digital finance company.

In the sports world, the Sacramento Kings are set to become the first major sports franchise to offer employees and players a bitcoin payment option.

Former Carolina Panthers lineman Russell Okung became the first NFL player to be paid in bitcoin after converting half of his $ 13 million salary last December. Since then, other top professional athletes have followed suit, including NFL players Aaron Rodgers, Trevor Lawrence, Sean Culkin, Saquon Blakely and NBA player Cade Cunningham.

With large companies, like Paypal and Microsoft accepting bitcoin payments, cryptocurrency is also becoming an accepted way to pay salaries and other benefits like bonuses and retirement savings for core employees.

“With the expansion of support for the use of cryptocurrencies in payments, it’s only natural that you start to see more and more people saying, ‘Well, if I can buy the cup of coffee. proverbial now with cryptocurrency, maybe I should get paid in it, “said Garrick Hileman, research manager at Blockchain.com.

But if you have the option of getting paid in bitcoin, should you? Here are some things you should consider first.

Who pays in bitcoin?

A number of companies pay workers or facilitate payment in bitcoin and other cryptocurrencies.

UnitedMasters, an American music distributor, recently partnered with Coinbase to give independent music creators the option of being paid, in whole or in part, in cryptocurrency for their streaming royalties.

“What we are seeing is a decentralization of artists and creators who are no longer dependent on legacy systems,” said Steve Stoute, CEO of UnitedMasters. “As they move away from this center there will be opportunities and scenarios like this where they want to have the tools and options to get things done right at their fingertips.”

BitWage, a payroll and human resources services company that allows employers to pay salaries and retirement savings using cryptocurrency, also allows its employees to be paid in bitcoin.

Other companies, including Strike, Choice, and BitPay, also offer some form of payroll, billing, or benefits in cryptocurrency.

Companies looking to pay their employees in cryptocurrency typically pay a 1% fee in the payroll process, but the option is generally free for employees, according to BitWage.

Workers who use this service can choose to receive all or part of their wages as digital assets and can choose which paycheques it applies to.

BitWage also offers its own employees payment in bitcoin and says that in general it has seen users allocate 5% to 10% or more of their salaries to cryptocurrency.

“People see this as a way to earn a higher salary in the long run. Basically get paid today and have a savings account that accumulates instead of losing money. it was just dollars, ”said Jonathan Chester, CEO and co-founder of BitWage. .

In today’s tight job market, cryptocurrency payments can be seen as a way to attract and retain workers, said Merrick Theobald, vice president of marketing at BitPay.

“You can’t always increase your salary, you have to look for these other ways to add value to your employees or future employees,” Theobald said. “Health and medical care and everything we’ve done before, so now we have to think outside the box.”

But how do you get paid in bitcoin?

Even if your employer doesn’t offer bitcoin as a payment method, you can convert your paycheck to crypto through a third-party service. However, keep an eye out for any fees or other additional charges that might be incurred.

“Getting paid in bitcoin or getting paid in another cryptocurrency makes the process of entering the crypto world much more efficient and easier,” said Hileman.

Usually, if your employer offers the option, it doesn’t cost you anything. While using a third-party service may include a fee for converting your paycheck to crypto, so you’ll need to read the fine print first.

You will also need to have a cryptocurrency wallet before you get paid. Cryptocurrency wallets allow you to send and receive bitcoin or other cryptocurrency. Wallets mainly come in two forms: software and hardware. Software wallets are usually free, while hardware wallets can cost up to $ 200. Companies like Coinbase, the largest crypto exchange in the United States, offer wallets.

Once you have a wallet, there are several services you can use to convert your paycheck to crypto.

Last month, Strike launched Pay Me in Bitcoin, which allows users in the United States to deposit their wages directly into their Strike account and convert an amount of their choice into bitcoin at no cost.

Coinbase also recently rolled out a direct deposit feature that allows users in the United States to deposit their paycheck into Coinbase and allows them to be paid in cryptocurrency. There are no fees associated with depositing funds, but normal fees apply for additional transactions such as selling cryptocurrency.

What are the advantages ? And the disadvantages?

Before making the decision to get paid in bitcoin, there are few pros and cons to consider.

For starters, most cryptocurrencies are extremely volatile. This means that the value of your payments can fluctuate at any time and you could lose a good chunk of your salary. In May, for example, bitcoin fell to $ 30,000, plunging about 50% below its previous high.

Taxes can also get tricky. Bitcoin and other cryptocurrencies are currently considered “property” by the IRS. This means that they are subject to capital gains taxes rather than income tax rates.

There are also fewer protections for bitcoin, making you vulnerable if you are the victim of a cryptocurrency scam or hack. Unlike traditional payments, there is no regulatory system in place that allows you to report or reverse a fraudulent transaction. And if your account is blocked, there is no way to access your funds.

On the bright side, crypto payments are immediate and eliminate the need to deal with a bank. This means that payments can be settled in seconds and often involve less transaction fees, according to Hileman.

Crypto also allows people to instantly transfer funds to others, no matter where they are in the world, without having to pay for a wire transfer.

“[Bitcoin] allows us to save money and overcome inflation, it allows us to send money to countries where previously the fees are 50% and allows us to live outside any central body or authoritarian regime ” , Mallers said.

Is getting paid in bitcoin right for you?

With the cryptocurrency craze in full swing, it can be tempting to want to bet more of your money on digital currency, but be careful.

“These shouldn’t be the person’s only reservations,” said Daniel Johnson III, certified financial planner and founder of Refocus Financial Planning. “For most people, it’s not worth paying in bitcoin. Almost everything that most employees will need to purchase will be processed in US dollars, so a conversion to US dollars will be necessary. “

If you are serious about getting into crypto, consider your financial situation and financial goals first. This includes looking at financial basics like your monthly cash flow, budget, and expenses to help you assess how much of your salary you can afford to convert into bitcoin or other cryptocurrencies.

Hileman advises converting only a small portion of your salary, rather than risking your entire income.

“A lot of times people tend to be all or nothing, and this approach can be very punitive in the world of crypto assets,” said Hileman. “Start small and familiarize yourself with what you’re doing, the changes you’ve made and go from there.”

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