Crypto has gained increasing attention in recent years. It’s everywhere you look these days – in the news, on the internet, and more specifically, in Elon Musk’s tweets.
We hear constant crypto updates, be it bull runs, record-breaking NFT sales or big tech companies incorporating it into their business models.
But did you know people were getting their salaries paid in it?
BitWage, a US crypto payroll platform which converts salaries into cryptocurrency, was the first of its kind when it was established back in 2014, and today boasts over 50,000 users around the world. It's not just employees using its services, either - employers including Facebook, Google, Airbnb and CoinDesk have apparently given it a go.
But is being paid in bitcoin actually beneficial or simply a marketing stunt? Well, it certainly comes with its fair share of publicity. But according to BitWage founder, Jonathan Chester, it’s also a great way to start building a crypto portfolio. In his own words, being paid in bitcoin is "a way of accumulating bitcoin or cryptocurrencies without worrying about whether you're buying at the right time".
There are other companies out there that clearly agree - and we don’t just mean in tech or financial services.
The American professional basketball team, the Sacramento Kings, recently caught our attention when they decided to give all of their players and staff the option to be paid in bitcoin.
The team was not only the first major sports franchise to offer this, it was also the first NBA team to accept bitcoin as payment in its arena in 2014, plus the first team to develop a crypto token for fan rewards in 2019. All this combined has led to the NBA being viewed as one of the most crypto-forward pro sports leagues in America.
So, who is else is on board?
Twitter‘s CFO recently stated that the company would be willing to pay its employees and vendors in crypto, if enough people requested it. If Twitter decided to seriously invest in bitcoin like Tesla did, the digital currency’s price is likely to soar. Getting paid in crypto could also be particularly beneficial to freelancers and the self-employed. Receiving bitcoin or another cryptocurrency instead of fiat could cut down both the time and cost involved, especially if the payment is cross-border.
Some say that paying wages in crypto better protects both parties in the event of a dispute, too, due to the transparent, immutable transaction records stored on the blockchain.
Perhaps there is some value in being paid in crypto, after all. But what are the downsides?
For one, it’s been labelled a bit of a tax headache, due to crypto’s ever-fluctuating value. Whereas income tax could simply be calculated from the time the salary is paid, you could still be required to pay capital gains tax should your earnings increase significantly down the line.
It’s also been said that being paid in crypto could potentially encourage gambling, since you may lose or gain money depending on when (if at all) you choose to exchange your earnings into fiat currency. If you make a killing on your pay packet one month, the chances are you’ll be keen to try and achieve the same outcome next time, too. But crypto’s inherent volatility means you may just be out of luck.
So, crypto salaries – a cool new way to introduce digital currency to the otherwise uninitiated or an all-too-easy way to lose your money?