Bitwage: Bitcoin's first formal payroll service
Sunday 01 June 2014
Recent efforts around building a bitcoin economy have focused on getting merchants to accept bitcoin as payment. These are legitimate efforts indeed, but there is one important element missing in the bitcoin economy: having employees earn bitcoin for their work. Having bitcoin as a widely available payment option is all well and good, however most people will find no value in this unless they own bitcoins. Buying bitcoins from an exchange just to make a purchase offers no real benefit to the buyer so there needs to be some other way to earn bitcoins.
As awareness and acceptance of bitcoin spreads, it would only make sense for companies to want to offer bitcoins as payment to their employees, especially since there are potential advantages.
Following on from companies such as Coinality, which advertise jobs paying in bitcoin, and firms such as Get Paid In Bitcoin, which allow you to convert a portion of your salary to bitcoin each month, another player has come on board to help people earn an income in bitcoin.
A coming bitcoin payroll
Bitwage is a service that aims to provide just that: a formal and structured payroll system for companies interested in paying their employees in bitcoin. There isn’t very much technical detail on how Bitwage would function, but it does aim to embrace trends in the payroll industry such as “direct deposit with employee's choice of bank, electronic tax filing, online W-2 accessibility, employee self-service portals, and enhanced ability to analyze labor costs", according to the Bitwage website.
It is approaching its private beta stage, which will begin in June and run through late August. What’s interesting so far is that of the companies Bitwage has surveyed (150 companies, 38 of which have responded), 18 have expressed interest in a bitcoin payroll system.
Among the remaining 20 companies who expressed their thoughts, seven showed some interest in the idea, while 6 stated they would only provide it if employees showed interest. Only one company expressed tax concerns being the main reason for not implementing a bitcoin payroll.
However, four companies stated they were already offering bitcoin as payment,
claiming that they attracted good talent simply because they were doing so.
How employees and employers can benefit
The global economy has become increasingly significant and relevant in recent decades, with the internet being the means that connects us globally.
Being able to conduct frictionless trade on a global scale can be a huge boon for both businesses and individuals, and bitcoin helps facilitate that. No more is one financially restricted to employment in their own country, as bitcoin cuts all fees associated with conversions and transportation of currency. And no longer is an employer’s talent pool financially limited to those within their country, as hiring international employees has little to no overhead when paying in bitcoin.
There is also a substantial benefit to those who lack access to banks.
Remember, the vast majority of bitcoin owners obtain their bitcoins through existing financial institutions such as banks. Those who do not have access to banks are ironically those who can benefit the most from bitcoin, as it provides a means of easily and anonymously conducting trade. With bitcoin, they can finally join the digital economy at large and build their own wealth. A formal payroll system such as Bitwage may be just the solution for those who lack access to a bank, allowing them to truly bypass current and restrictive financial institutions.
It has only been a year since bitcoin has seriously entered the mainstream consciousness and it is already showing its value to employers and some employees. This value will only become more apparent as the bitcoin economy develops, which appears inevitable with merchants and employees adopting bitcoin. Bitwage is certainly a necessary step in the right direction, helping fill in that missing link to a successful bitcoin economy.
Read more about how payment in bitcoin is on the rise
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