Why I’m Getting 5% Of My Salary Paid Ter Bitcoin
An early adopter shares how he approached his employer about getting paid ter virtual currency.
I discovered bitcoin te early 2011. At very first it wasgoed something that felt like play money and almost surreal. I didn’t fully understand all the details back then, but a decentralized, peer-to-peer digital currency wasgoed just too crazy and I became intrigued.
Overheen the years I commenced diving deeper and deeper into bitcoin. Along the way, the true power of it indeed leaped out at mij:
I ended up doing some freelance bitcoin development just before I joined Buffer. It’s often a topic that my brother and I can talk about for ages. There’s tons of potential here, and VCs see it too.
Using bitcoin for coffee, hotels and more
Bitcoin is often seen spil a speculative investment, like a digital asset. However I’ve often bot intrigued to explore using bitcoin more often.
Albeit I do keep part of bitcoins spil an investment, the times that I have used bitcoin to transact online, it’s bot an absolute joy. I’ve made many purchases, such spil booking hotels te Fresh York (for traveling before the fourth Buffer retreat), buying coffee and even games online.
The list of merchants who accept bitcoin just keep growing, including Microsoft, Dell, and many more. The ecosystem has flourished since 2014, when I realized that I could certainly begin spending bitcoin regularly for parts of my life.
I didn’t want to lower my bitcoin assets too much, so I determined to explore the option of getting paid te bitcoin spil a way for mij use bitcoin spil both an asset and a currency.
Only 5% of my salary for now
Before I embarked the process with Buffer te getting paid te bitcoin, I took stock and chatted with my gf about what seemed feasible ter terms of holding bitcoins spil a currency.
Bitcoin is infamous for its volatility, and at this point getting paid fully ter bitcoin would not make sense for mij. It’s just too risky.
I determined spil an proefneming to embark off with getting only 5% of my salary to be paid ter bitcoin, out of a total $96K vanaf year that I’m making. (Wij have totally translucent salaries at Buffer, you can take a peek at all of them here).
This might increase or decrease overheen time.
Very first step: Getting advice from the team
The way wij make decisions at Buffer is through an iteration called the advice process. Wij do this since wij don’t have any managers and are a fully self-managing team. So if you’re interested te tackling this te your startup, you might not be able to use that precies path, but I hope it might be a good proxy.
Very first, I created a document to list all the pros and cons of getting paid ter bitcoin and collective this with the team to get their advice. Here wasgoed the list:
- Advantage: Closes the loop (no need to exchange to fiat currencies)
- Disadvantage: Bitcoin value still relatively unstable
- Advantage + Disadvantage: Taxes (more on this one straks)
- Challenge: Getting paid (more on this zometeen)
- Advantage: Ease of use spil an international currency (wij tend travel a lotsbestemming at Buffer)
The overeenstemming among the team wasgoed unanimously positive. A few others also voiced rente te attempting to get onboard spil well.
It undoubtedly helped that most of the team understood bitcoin te some way and many are also ventilatoren themselves. I recall during our Thailand retreat te January 2014, when the price of bitcoin wasgoed close to its high, having numerous talks with the team about how amazing bitcoin wasgoed. Unnecessary to say, my evangelism led to some of the team buying bitcoin right at its top.
It’s become an inwards joke among the team that whenever I mention bitcoin, it should come with a disclaimer that it’s not investment advice.
2nd step: Getting everything set up to be paid te Bitcoin
We’re amazingly fortunate to have an amazing payroll and finance company, Foresight, to help us out ter this regard. They treat our payments and expenses with such speed and joy.
Randy is our go-to person for all things Buffer at Foresight. I began the conversation with Randy to see how Foresight might feel ter exploring how to get paid ter bitcoin:
It helped immensely that Randy wasgoed open and willing to explore this with us:
Third step: Evaluating the options: Coinbase, Circle and BitWage
The tricky situation wasgoed to find a method that worked slickly for both Foresight and Buffer. Since Foresight is based ter the U.S., it opened up few initial options to explore: Coinbase and Circle.
Both sites suggest effortless setup with U.S. bankgebouw accounts, which would permit Foresight to purchase bitcoins and then send that amount to mij ter South Africa. This essentially placed the responsibility on Foresight to hold and manage bitcoins spil an extra currency option.
Randy went ahead and applied at both Coinbase and Circle. However, both took some time to validate their banking details to embark purchasing bitcoin. I did some more research ter Coinbase and Circle and realized that neither of them might work spil sleek spil we’d hope for, especially on Foresight’s side:
There are purchasing thresholds te place. Albeit the amount that I wasgoed hoping to receive spil part of my salary would’ve gezond within the boundaries, this might not be a long term solution if more people determine to leap onboard or to increase their payment via bitcoin.
Volatility created some tricky situations. At the time of exploring thesis options, the bitcoin price dropped by around $30 within a few hours. Services like Circle and Coinbase offerande to lock te the amounts, but with conditions. So there were possibilities that I would get a different amount of bitcoin and/or Foresight would have to keep some bitcoins left overheen. Wij both determined that this didn’t feel fairly right for Foresight. Using bitcoin should be sleek for both parties.
I then did some more research and discovered a service called BitWage. They are a bitcoin company geared towards payroll services. They understood the challenges involved and had some truly interesting products already. One such service is payroll for the individual. Here’s how it works:
- Employee sets up an account at bitwage.
- Bitwage issues specific banking details for the user.
- Employee gives thesis fresh banking details to payroll.
- Payroll sends USD wire deposit to the employee’s bitwage banking details.
- Bitwage receives it, and instantly converts it to bitcoins.
- Bitwage pays those bitcoins to a bitcoin address the employee specified.
Te a way, Bitwage acts spil an intermediary inbetween mij and Foresight. Foresight then has to make no switches except to add an extra wire transfer.
On my side, I can then choose how to receive my bitcoins. I set up an account soon after finding bitwage.
Wij tested things out with a puny transfer. It worked exceptionally slick! Randy and I were both enormously blessed with this setup.
Here’s how you could do it too
Having Randy explore thesis options along with mij wasgoed incredible. I’m very grateful to have such a forward-thinking company help us out. I do realize, however, that not everyone might be so fortunate to be able to explore thesis options with their employers and/or payroll services.
Bitwage, however, especially the payroll for individuals, permits you to setup thesis separate banking details without necessarily having to woo your employer or payroll company. It’s a very risk-free and effortless setup for all parties involved.
Side note: Taxes
Since I now receive money via an international transfer and bitcoin, it prompts the question: how do you treat taxes?
Bitcoin is still very youthfull ter its development and regulation is still forming. It’s best to ask a tax consultant and also keep on the lookout for statements from your local treasuries/banks. South Africa, for example, where I live, has issued a statement that they won’t regulate cryptocurrencies for now.
Albeit the current amount I receive is not a loterijlot, if you were to consider receiving all your money ter bitcoin, then exploring tax might be a good course of activity. It remains to be seen how many countries will regulate it.
Here’s what it looks like
I’ve received two payments already, and it’s bot incredible to see this te activity. I use bitx spil one of my main bitcoin wallets. Here’s the very first transaction that came ter:
And with the amazing technology behind bitcoin, you can see the detail of this very transaction on the blockchain:
Perhaps someday ter the future, bitcoin might be the only currency I use. Titillating times ahead!
If you have any questions, doubts or thoughts on bitcoin, I’d love to response them! Let’s talk te the comments!