Cryptocurrency – the most famous example of which being Bitcoin – is a decentralized digital currency that does not depend on traditional institutions, such as the government, to maintain its use and exchange rates.
As it stands, most places of work do not offer cryptocurrency of any sort as compensation. The legal status of cryptocurrency is somewhat ambiguous, and regulations on it are quite likely given its high environmental costs and its potential for facilitating fraud and illegal marketplaces.
While it is uncommon for companies to pay in cryptocurrency, it isn’t unheard of. And in the instances where it is used, employers may find that the incentives for paying workers in cryptocurrency are actually quite great.
Therefore, barring the abovementioned legal and regulatory potentials and limits, employers may find cryptocurrency as a method of payment as an advantage in the future of work.
With current events being as turbulent as they are, many workers may accept such a change with open arms, therefore leading to a convergence of values on one salient point between employers and employees.
However, both employers and employees should not be naive about cryptocurrency, as it is volatile and unregulated, opening up its owners to scams and audits from the IRS if they are not careful.
Companies that pay workers in cryptocurrency may improve their hiring rates
According to Dennis Consorte, Small Business Consultant and Expert at Digital.com, companies who pay their workers in cryptocurrencies such as bitcoin have been shown to improve their hiring rates.
“Let your workers choose how they want to be paid and you’ll attract people with a variety of preferences. Also, consider offering your employees benefits like access to bitcoin-backed IRAs which may offer certain tax advantages,” according to Consorte.
An example of a company that does this is the crypto wallet company Exodus, where its employees are paid in Bitcoin.
So too is the case with Bitwage, which is a payroll service allowing employers to pay workers in cryptocurrency – also, Bitwage offers its own employees a crypto salary.
At this point, it is possible – no matter what your profession is – to have your entire salary converted into cryptocurrency.
Because of inflation and contentious global affairs, payment in the form of cryptocurrency has been growing in popularity among workers. They worry that if the centralized economy fails, then they will lose their assets.
Such worries, on this reasoning, may be ameliorated by a decentralized currency.
“Right now, it’s a great idea to look at crypto and possible hedges against inflation. The last time inflation was this high was over 30 years ago, which means the dollars you have in the bank are losing value every day,” according to Consorte.
How viable is the cryptocurrency option?
Despite inflation and global events, it’s unclear that cryptocurrency is unambiguously worth investing into – let alone converting your entire salary into. The value of dollars sitting in the bank is dropping, but this does not mean crypto is the best or only alternative.
Cryptocurrencies are extremely volatile and make reporting your taxes to the IRS far more complicated.
For instance, if you are paid $50,000 in bitcoin, but come tax season that $50,000 is worth $25,000, you still have to report to the IRS that you made $50,000. And if you have all of your asset eggs in a cryptocurrency basket, this will leave you open to the risk of being audited.
The market volatility of cryptocurrency and its potential pitfalls is well exampled in NFL player Odell Beckham Jr’s one-year deal with the NFL to pay his salary in bitcoin.
According to Forbes, “He reportedly converted a $750,000 paycheck into bitcoin, and may have lost the equivalent of almost $350,000.”
This is a nightmare situation for any taxpayer, frankly.
Volatility is only the tip of the iceberg of problems with cryptocurrency. Given that it is unregulated, this leaves its owners more open to scams, and there’s nowhere for you to go to report fraudulent or unapproved transactions.
As far as it seems current, the best benefit of adopting a cryptocurrency-based salary is not having to deal with bank bureaucracy and having transactions become streamlined. There is little to no guarantee of safety – and much evidence to the contrary.
Given the ambiguous nature of cryptocurrency, employers should think twice about whether to use it as an alternative currency for paying their workers. Surely there are better ways of improving hiring rates, such as by increasing wages and flexibility.
It is clear that more companies will follow ensue and pay their workers in cryptocurrency – or at least give them a currency option. It is popular, and employers love opportunities to increase hiring rates.
Thus, it is reasonable to expect that the future of work does mean greater use of cryptocurrency.
Anyone considering cryptocurrency – whether as a mere investment or as an entire salary – needs to take into great consideration its extremely high market volatility, its lack of regulation, and its negative impact on the environment.
While it may seem compelling now, its future is profoundly uncertain. If you’re in a position where you are living paycheck to paycheck, can you really afford crypto’s unpredictability?
Source: All Work
