Ben Todd | Jun 2, 2017 | 1
How to Pay Freelancers With Bitcoin
If you wish to pay your freelancers, then you may pay them with bank transfers to their business accounts. If you are working overseas or your freelancer is a long-distance worker, then paying with PayPal is acceptable. If your freelancer works in the far east or Middle East, then Skrill may be easier. On the other hand, if you wish to send money via the Bitcoin network, you are able to pay freelancers with bitcoin.
Get Yourself A Bitcoin Wallet
There are hot wallets and there are cold wallets. A hot wallet is one that relies on some sort of Internet connection to a third party (I know I have oversimplified that somewhat), whereas a cold wallet is a piece of hardware that you plug into your computer whenever you wish to use your bitcoin.
I would recommend that you get a hardware wallet that allows you to store your bitcoin offline. I recommend this because I guess you are going to keep and store quite a bit of bitcoin if you are planning on paying freelancers with it.
Take advantage of peaks and troughs. Keep your eye on bitcoin and buy when its price lowers. Keep it in your cold storage (hardware) wallet for when you pay your freelancer. If you are lucky, your bitcoin will have gone up in value when you pay your freelancer with it, which means you get a better deal.
Your Freelancer Needs A Bitcoin Wallet Too
Your freelancer can probably use a hot bitcoin wallet (one that doesn’t require a piece of hardware) because your freelancer is probably going to spend the bitcoin or is going to convert it into another currency. The freelancer you choose is going to have to have a bitcoin wallet, and you cannot assume that you freelancer knows much about bitcoin, so you should pick a very easy bitcoin wallet.
Something such as Mycelium may be suitable if your freelancer doesn’t work from an office and is in the field quite often, but Mycelium is a rather advanced wallet. Put your freelancer on to one of the wallets we have created step-by-step guides for.
A Step-By-Step Guide Showing How To Create A Jaxx Wallet
A Step-By-Step Guide Showing How To Create A MyEtherWallet.com Wallet
A Step-By-Step Guide To Get A Bitcoin Wallet From Bitcoin.co.uk Using Multibit (May be defunct 2017)
The Jaxx wallet is the easiest to set up. It does almost everything for you. Plus, once it is all set up and your freelancer is comfortable with it, he or she is able to go back and customize it to make it far more secure than it already is. It is not ideal for long-term storage, but may be perfect for your freelancer.
Do You Or Your Freelancer Need A Hardware Wallet?
They are not essential, they are just another layer of security. It is like having two locks on your bike instead of one. It is like having an immobilizer in your car as well as an alarm. Do not force your freelancer to buy or use a hardware wallet because he or she may not be looking to store bitcoin for long periods of time, and the freelancer may decide that he or she doesn’t want to hold large amounts of bitcoin in one account.
Some people like to diversify in order to lessen the chances that they lose all their bitcoin. I don’t think it is a good idea to have a wide number of bitcoin wallets where you store different amounts of bitcoin. I understand that it may help stop a complete loss, but any loss is unacceptable in this case. Still, if you are using bitcoin as some form of investment, then spreading your bitcoin around numerous wallets may be a good idea.
Don’t buy hardware wallets while they are expensive. At the moment it is August 2017, and there are many merchants that have run out of hardware bitcoin wallets because the European factories won’t have fresh ones until late September. As a result, the price of hardware bitcoin wallets has skyrocketed. Wait until they are very cheap because their prices drop and peak all the time.
Buy from a reputable company that is established in the USA, Canada, Australia, Western Europe, Japanese, South Korean, Israel, or the United Kingdom. If you buy from places such as China, then any nasty surprises you get in a few months are your own fault. In addition, treat your hardware wallet like buying medication–if the seal is broken, then send it back because tampering can result in a complete loss of your bitcoin.
Do Not Become Tarred With The Same Brush As Other Companies That Pay Bitcoin
If you wish to pay your freelancer with bitcoin, then that is perfectly fine. For example, if you have just had a freelancer move your website My Yola to WordPress, and you wish to pay him or her in bitcoin, then that is fine.
However, there are businesses out there that are paying people in bitcoin, and they are not on the level. They are companies that tell you to do this and that and they will pay you bitcoin. They are not hiring freelancers, they are hiring anybody. The trouble is that freelancers are getting snagged by these companies. The bitcoin-paying businesses are no better than the survey companies that promise to pay people US dollars for filling out surveys. Here are two examples of companies you may like to stay away from (in our opinion):
The image above is a simple example of an app that claims it will pay you bitcoins, but that makes it so difficult that it is not worth your time. They pay 15 satoshis at a time, and yet wont allow you to cash out until you have 5000, which is roughly 22 cents.
The app in the image above will give you access to bitcoin faucets. I had no idea these even existed. Invent your own faucets, and they become a great way to have strangers do your dirty work. For example, if you are creating a program that is able to work its way past a Captcha puzzle, then you simply pay people a few satoshis each time a faucet user completes a Captcha puzzle, and you have your program record their answer. That is probably the reason why may bitcoin faucets come and go so quickly.
Offer freelance contracts with bitcoin as an option for payment rather than bitcoin being the only payment option. The freelancer has to trust you in order to take a bitcoin payment. Maybe offer bitcoin as one of the payment options because the freelancer may agree if taking bitcoin payments is cheaper than taking US dollar payments.
Don’t offer bitcoin payments to freelancers as a way of avoiding taxes. If your freelancers assume they can hide from the tax department by being paid in bitcoin…then they are probably correct, but don’t encourage it. If you encourage it, then you will attract the sort of idiots who suffer crippling audits that start casting attention in your direction.
You Need To Buy Bitcoin In Order To Pay Freelancers With Bitcoin
How you get your hands on bitcoin is your business. One assumes that if you are reading this article that you have a good idea of how to get your hands on bitcoin. Nevertheless, if you are a little concerned about how to get bitcoin, then have a read of a few of our articles. We have articles that explain how to set up accounts with currency exchange companies, and we have articles that explain where you may get cheap currency from.
A Step-By-Step Guide Showing How To Create A Poloniex Currency Exchange Account
How to Buy Bitcoin With PayPal Using LocalBitcoins
How to Buy Bitcoin With Paypal
Cheapest Ways to Buy Bitcoin
Best Bitcoin Companies to Buy From
How to Buy Bitcoin Using Virwox
You can get a good deal on websites such as LocalBitcoin if you are a strategic buyer. Either wait for the next time when the cost of bitcoin dips and people start to panic sell their bitcoin because they think it is the bubble bursting. Or, place offers on LocalBitcoins or Paxful and have people sell their bitcoin to you for the price you desire.
What About Letting Your Freelancer Sell Bitcoin For A Profit?
You could pay your freelancer with bitcoin into a wallet. Or, you could pay your freelancer with bitcoin into a website where he or she is able to trade bitcoin. Get him or her in to a trading account and allow your freelancer to sell the bitcoin you send (hopefully for a profit). Bitcoin offers a system where there is a capped supply. That means there are going to be rises and falls that may allow lucky traders to make a bit of profit here and there.
For example, if you live in Britain, then it is a great time to be paid in US dollars. The UK is trying desperately to free itself from the iron grip of German-led Europe, and it is weakening their currency significantly. In addition, Obama damaged the US dollar significantly while getting the US in an extra 10 trillion dollars of debt. Now that Donald Trump is in charge, he has been able to strengthen the US dollar significantly and make back a lot of the ground that Obama lost. This means that a person in the United Kingdom is seeing the GBP value drop while seeing the US dollar rise, and both events are occurring at the same time. As a result, a person receiving US dollars is able to sell them for more and more GBP.
Sometimes, it is a good idea to store different currencies for later. For example, if you are paid in Yen by a certain client, and the Yen is down, there is no harm in keeping it stored away until the Yen recovers a little. You may not be in the business of making money from different currencies, but if you are paid in different currencies, and if you have to pay out in different currencies, it may be worth trying a little strategic saving now and again.
What Is The Point Of The US Dollar And GBP Story?
The point is that a person who is being paid in dollars is making a profit because two large global events occurred, being the yin and yang of Trump and Obama, and the UK’s decision to try to leave Europe. Yet, a person doesn’t require a large global event to make a profit from bitcoin.
The freelancer you are paying in bitcoin may need only wait for spending to slow a little. As spending slows, the value of bitcoin will eventually have to go up, which will then encourage people to start spending and trading their bitcoin in a way that makes the value go down again. Your freelancer may be able to exploit this cycle to make profit on the money you send to him or her.
Encourage your freelancers to get into the idea of making money from bitcoin. For example, if you show them that they may sell their bitcoins for a profit on LocalBitcoins, they may be more eager to receive them. In addition, if you bought your bitcoin when the price was down, then you may make a significant saving by paying in bitcoin rather than dollars.
Don’t forget that bitcoin traders and exchanges will not give you the market rate (the one you see on Google) for your bitcoin, but your freelancers may accept the market rate. With that in mind, you may buy your bitcoin when its price is down, and then give it to your freelancers when it is worth more. In essence, you are almost selling your bitcoin to your freelancers and you are getting a perfect exchange rate for it.
Conclusion – Set Up Your Wallet, Set Up Your Exchange Account, And That Is All You Need
You now have all the information you need to pay freelancers with bitcoin. You know what type of wallet you will need for which occasion, and you have found out how to get your hands on bitcoin. Make sure you shop around for bitcoin. I saw some terrible deals on Amazon and eBay where the exchange rate was terrible and yet people had still bought from them. Make sure you shop around, and use peaks and troughs in bitcoin prices to your advantage when you are pay freelancers with bitcoin.