Would You Accept Salary Payment in Crypto?
Too early? If you were offered your pay in crypto how you would react. Would there be too many issues or would you be all over this.
If I were given the choice I would choose crypto despite the fact there would be a few issues to work around. I think the main reason would be to simply skip the banks. Even before crypto was popular I always though it was strange that employers give my hard earned (or not so hard earned) money directly to a bank.
Issues With Being Paid In Crypto
Why wouldn't I wanted to be paid in crypto? I realize that everyone's situation is different, and people in different countries are faced with different challenges when it comes to crypto as payments.
It's possible that I land a full time gig working for a crypto startup and I would be paid my monthly salary in crypto. I want to think this through on the fly here and get a handle on the challenges. Like I said I'm all for being compensated entirely in crypto, but there's bound to be some hangups.
Converting to fiat - Reality is I need to pay some bills in fiat, cell phone, rent, car payments, insurance, etc. none of these companies accept crypto as payments right now so I would be looking at having to convert a significant chunk of pay to fiat.
Currently I'm going through Kraken as an off ramp, and while sending crypto from exchange to exchange costs very little, the charge to withdraw in CAD is 0.25%
Processing Time - Currently listed at 2-5 days, and on average it takes me 5 business days to receive funds in my bank account, request on Monday, receive on Friday kind of situation.
This adds an additional week lead time before receiving a portion of funds that can be used to pay bills in fiat. Not ideal but it can be worked around with some planning.
Volatility - Often presented as a challenge for those thinking of accepting crypto payments as no one wants to charge $50 and have it worth $45 only hours later.
That's why the hodl gods gave us stable coins! I think stables solve this problem. Either I'm paid in a stable coin or I'm converting to a stable coin almost immediately. Given the choice I would choose to be paid in a stable coin like Tether or USDC, both would do the job just fine.
If I wasn't able to be paid in a stable and accepted a native coin or token, assuming there's liquidity, I would have the task of converting to stable every time I was paid. If this could be automated that would be preferred. Imagine I was away from a computer for a few days and was paid and unable to convert and lost 5-10% of my salary, disaster!
Perhaps in the future there will be a decentralized and automated service that could convert my coins to stables on a regular basis or in sync with receiving a paycheck.
Benefits Of Being Paid In Crypto
The ultimate on ramp? I think this is the ultimate wet dream for crypto investors, as there' no need to use an on ramp. At any point in time I can move my funds over to investments and put the money to work.
If crypto is where you prefer to invest than you're probably pumped to be paid in crypto. Yes you'll have to convert to pay some bills but the remainder of your funds could avoid being handled by centralized institutions and available for you to manage.
Decentralized Future - This may or may not be an important one for people out there but it is for me. I want to see a P2P future without centralized institutions having direct access to my funds.
Why the fuck does the bank get first dibs on my paycheck and not compensate me for this, in fact sometimes I pay them! That is so wrong and I can't wait for this to change.
Additional Thoughts
Until you can pay for most of your regular expenses with crypto's it might be too much to expect to be paid in crypto. Working for a crypto startup might be the only exception, and maybe for a while longer.
I see a future where more and more businesses and services accept crypto, possibly for the same reason I want to accept crypto as salary.
But which one will come first?
I'm thinking it will start at the small business level. Mom and pop shops, entrepreneurs, and startups will allow crypto payments until it's mainstream. I imagine large employers will mainly be slow to offer crypto salary and may even not have enough incentive to do this. I'm also completely assuming that government doesn't shut this down, as they're in bed with big banks, and you know they're going to fight this tooth and nail.
If you think the big banks that fund our politicians campaign are going to go quietly into the night, well surly you would be wrong.
Would you accept your pay in crypto?
If so is there a certain crypto you would prefer or would you go with a stable?
Ciao for now,
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I prefer fiat for salary, and the main reason is transaction costs, most shops don't accept crypto so you need to convert into fiat and then this costs money. Banks also don't accept crypto to pay your home loan off either, so again you will need to convert to fiat. So the transaction fees are still too high, and not enough real world adoption yet to ask my salary to be paid in crypto.
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Fair points, converting to fiat costs me 0.25% so hypothetically if I draw a salary of $70k and had to convert half of that to Fiat im looking at paying about $90 a year in conversion fee's.. wait that's nothing! some people pay that in one eth transaction 🤪
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It costs me more than 0.25%, I use crypto.com, whilst there are no fees to withdraw the exchange rate has a spread of about 2-3%. But I am converting to AUD so my options are probably more limited than yours. But fair point on only $90 a year, if you are willing to accept the volatility
I have worked on a lot of small projects recently as a freelancer in which I got paid in Crypto! But for now, I cannot manage to be paid 100% in it because of the reasons you mentioned above.
Great thing is that it's fast as compared to fiat transactions when it comes to DPoS blockchains like HIVE and saves you a lot of transaction fees since there are no freaking banks or third parties like PayPal who take up your own money. But if you want to convert it into FIAT then you end up in the same situation.
In the future when we have enough marketplaces where you can actually spend your crypto directly, then it's going to be a far better way to get paid.
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Makes sense! more markets equals more reason to have crypto on hand for everyday needs and that's when the masses tell their employers they want to be paid in cooooins!
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Your post was promoted by @finguru
Thanks boss!
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You nailed it.
The athletes and other celebrities getting paid in Bitcoin or whatever are in a different position (many of them). They do not need their entire salary to pay their bills, or at least they shouldnt. That is the advantage.
It is like taking compensation in stock or options. Elon Musk can take a salary of like $25K and the rest in billions in options since he doesnt need the money to pay the electric bill.
Getting paid in crypto will have to be a portion of most people's salary, like 10%. This will be akin to their saving or retirement contributions. But they will need more in fiat since they got to pay the old bills as they roll in.
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An option to be payed a portion of salary in coins sounds like a possible entry or starting point for a business looking to get into crypto. Diversify your treasury and give employees a pretty sweet perk..
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Like others have said, it would be detrimental to most people as they need fiat for various things and transaction fees/slippage would only cause them to lose more money than being paid in fiat directly.
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Totally could be, i get it. Although my rough estimate would be spending apx $100 a year on conversion fee's.. in the grand scheme of things that's not too crazy. I would be willing to bet most retail bank accounts pay more then that in monthly banking fee's..
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Interesting thoughts! At the end we still need fiat to pay our bills. Switching to stable coins could certainly be a good option. If I had my pay in crypto I'd probably did that as well. The volatility is huge, even for the 'big' coins...
I could imagine that this choice also makes a big difference how much of your salary you need for living. If you anyway plan to invest part of your salary, crypto might actually be a good option. If you need every penny to get along, it might make it even harder...
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For sure a portion would be converted to fiat, like you mention possibly the whole thing. Conversion fee's of .25% are pretty affordable though.
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Interesting questions you lay out @agr8buzz. I reckon I would be more than happy to accept a portion of my salary as crypto.
If I could receive enough income for basic staple items in fiat, then I would be more than happy to receive the remainder in crypto. It is basically forced form of saving as I see it. It also reduces the urge to spend what money you have in the bank account on frivolous things that you do not really need.
Overtime it would result in enough crypto to be able to utilise some of the earnings from your crypto assets for other splash out items from time to time.
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The truth is, if you could choose between a normal salary or a salary in cryptocurrencies, without a doubt, I would choose the payment with crypto (although it all depends on the context) in my case I am from Venezuela and it is no secret to anyone that the Venezuelan economy is bankrupt, It would be an opportunity to receive my salary in crypto, especially I agree with the currencies such as Tether or USDC that you named since they would allow us to enhance and increase our profits (as long as the person has quality of crypto-financial information)
so the person who wants his hypothetical salary to be in crypto should know about this world and how it is handled
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