Bitwage Beta: Get Paid in Bitcoins, Regardless of Employer
Wednesday 05 November 2014
Closing The Loop
As more businesses begin accepting bitcoin, it becomes essential to realize there’s been focus on one particular half of bitcoin adoption: spending. Sure, it is important to have places to spend bitcoins, but if there is no easy way to attain them, then why would the average layperson be interested? There are also other factors inhibiting consumer interest and adoption. There’s the fact that many companies who accept bitcoins convert them immediately into fiat currency creates downward pressure on bitcoin’s price. Couple this with the process of registering for young online exchanges (often requiring a lot of personal information and time to set up), it becomes apparent that there are barriers to entry still.
As far as spending is concerned, it has been discussed that in order to “close the loop”, there would have to be a way for the average person to earn bitcoins for their work. We would expect that doing this would involve preaching to employers about bitcoin and hoping they decide to implement a bitcoin payroll. However, what if employers decided not to? Fortunately, Bitwage has implemented a way for people to earn bitcoins regardless of their employer’s view on it.
Enter the Payroll for Individuals
The Bitwage Payroll for the Individual [or BP(i)] is a means for people to automatically convert any amount of their fiat earnings into bitcoin. Normally you would have to invite your particular employer to participate in the Bitwage payroll on your Bitwage account. However, BP(i) aims to make this entirely unnecessary. This functionality will be expected to have a wide range of uses for various kinds of people. The curious layperson will be able to easily invest a small percentage of their income in bitcoins. Those who rely solely on checking accounts in banks or prepaid debit cards will have the opportunity to escape the fees and fines associated with these services. Freelancers who often contract work outside of their countries will be able to bypass the slow and costly conversion between two fiat currencies. Residents of countries whose currency is failing will be able to find a safer alternative than exchanging their currency for dollars (considering this exchange is deemed illegal in some countries).
How the Underbanked Are Currently Affected
As BP(i) is currently being released in the US, I'll focus more on US-based statistics. In the US, at least 10 million citizens are considered “underbanked”; they do not have a minimum balance to maintain a bank account, and often do not trust banks in general. Due to the fact they do not have access to a traditional bank account, they must deal with the inexorbitant amount of fees associated with services like prepaid cards. These include initiation fees, monthly fees, POS fees, cash withdrawal fees, balance inquiry fees, transaction statement fees, customer service fees, bill payment fees, fees to add or load funds, dormancy fees, fees to get remaining funds when closing the account and overdraft fees. These fees take their toll on the underbanked, with overdraft fees cumulating to over $31 billion in the US in 2012 alone. Given all of this, I think it's clear why an alternative way of sending and holding money would be appealing. At first, BP(i) may serve as a simple investment vehicle even for the underbanked due to bitcoin's volitility, however it may lay the foundation for both banked and underbanked individuals in the future.
How International Labor Can Benefit
As Bitwage expands its service to other countries, it would have the potential to greatly benefit international labor. Over 2.6 million full time jobs are outsourced outside of the US; as such, there is a need for reliable wire transfer and banking capabilities. Many countries in question do not have such capabilities, and those that do may require high fees and/or may not have a reliable fiat currency. Typically residents of such countries exchange their country's fiat currency for USD, however in some countries (Argentina, for example) deem these exchanges illegal; this ruling makes it very risky for people trying to make a living with a reliable currency. With bitcoin and a service like Bitwage, people in these countries can conveniently bypass this dangerous process.
Overall, it can serve as a frictionless way for any freelance worker to receive payments from anywhere in the world. The slow speeds and fees associated with traditional bank wires can easily be replaced with the cheap, high speeds of the bitcoin network. Normally, one would have to hope that the employer in question uses bitcoin, however with BP(i) to handle these matters, their employment options are not limited by any stretch. It's possible that the convenience brought about by BP(i) will make freelance work more attractive and accessible, and even broaden options internationally for many freelance workers.
Getting started with Bitwage Payroll for the Individual
BP(i) has entered beta as of November 3rd, 2014; as of the current beta it will only be supported in the US. They plan to include support for international payments from the Philippines by the end of this year, with service being provided to other countries by early 2015. For US residents, you can sign up very quickly and easily at bitwage.co and apply for BP(i) through your account dashboard.
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