You can now pay for apps and games from Microsoft using bitcoin. Similarly, you can make hotel bookings on Expedia or pay for pretty much anything on Overstock.com using the digital currency.
But is it possible to earn bitcoin as your salary? Obviously, not so many companies are offering this option for their employees. While paying in bitcoin can be hugely advantageous, it also comes with significant uncertainties that can put workers at risk of serious financial instability.
Bitcoin’s value today may be $8300 but there is no telling where it might go in the next few hours, days or weeks. It might well hit $10,000 in the next few weeks, or depending on several external factors, like government regulations, it could fall to as little as $5000 a unit or much less in a few months.
In this scenario, employees paid in bitcoin stand to lose a lot. Their wealth can also multiply quickly if bitcoin rapidly gains in value.
Dicey Situation
Generally, this is a very dicey situation for companies. However, there is no shortage of companies offering bitcoin payments. They generally tend to be tech oriented start ups eager to experiment on new things.
Employees who accept this kind of payments generally tend to be tech enthusiasts who want to explore the real possibilities of digital currencies and their potential to transform how we make transactions across the globe.
TenX is one such company. Employees get their base salary in fiat but their bonus is paid in Pay tokens, the company’s native digital currency. TenX president Julian Hosp told the BBC that paying in Pay tokens will incentivise staff as the token’s value will rise in tandem with the company’s success.
GMO Group
GMO Group is another major company that offers the option of bitcoin payments to its employees. The Japanese internet firm started giving the option early this year although others see this as a marketing stunt. The company has direct interest in the cryptocurrency industry and has recently been venturing into cryptomining as well as cryptocurrency trading.
BitWage has built its business around converting salaries into bitcoin for companies that want to do so. It now boasts thousands of users after only a short time in operation showing the huge interest. To date, the company has 19,500 registered users and over $34 million processed through its platform. BitWage counts the likes of Google, Airbnb, Facebook, Uber and the World Health Organisation among its clients.
What about taxes
Having the option to earn bitcoin or other cryptocurrency as a salary sounds like a perfectly convenient option.
However, depending on where you are, it can come with additional obligations – like filing additional taxes. Depending on your jurisdiction, bitcoin may be liable for a capital gains tax, which means you have to pay for tax every time it rises in value. This can be a rather tedious process given its highly volatile nature but it’s something to have in mind.
Bitcoin can be particularly attractive to tech enthusiasts and can give a company some appeal especially when recruiting.
But in reality, bitcoin is yet to gain widespread use in daily transactions and it may not be entirely practical to pay entire salaries in it. However, it can act as a great investment option in the long term.