Closing the Loop
We live in a world of circular interactions. We wake up, go to work to make some money, use that money for food, drinks and other activities, and then go to sleep to be able to work the next day. It is these circular habits, these loops, that make this Earth go around.
Now, let’s take a step back and think about this loop from an employer-employee standpoint. Employees work to make money for the employer, the employer receives payments because of the hard work of their employees, the employer pays the employee for their hard work, and then the employee spends their money on the goods and services of employers.
Did I lose you yet? The point is that the employer-employee relationship depends on a loop of payment flows.
This is where Bitcoin comes in. So far, the Bitcoin ecosystem has created an infrastructure around all the different aspects of this employer-employee loop of payment flows, except where the employee receives a Bitcoin wage. It is only natural for employers, as Bitcoin becomes more widely adopted among the mass consumer markets and accepted among the mass merchant vendors, to begin to close the loop.
The benefits are many on both sides of the spectrum: for employees, it provides a reliable, easy method to be paid, living anywhere in the world, without the need of a bank account, while for employers, it helps to obtain and retain high quality talent (who happen to be Bitcoin enthusiasts*), reduces part of the payroll headache of paying international employees, and saves both time and money associated with traditional methods of payroll, such as direct deposit. Although these benefits will become more pronounced as virtual currencies become more pervasive throughout the global economies, the trend of companies paying employees in Bitcoins is on the rise.
Here at Bitwage, we have surveyed over 150 Bitcoin-friendly companies, which we have defined as companies currently accepting Bitcoins as a form of payment, world wide (with a majority in the United States) regarding their stances on implementing Bitcoin payroll. If you have never thought about Bitcoin payroll before, these findings may surprise you. Out of 150 Bitcoin-friendly companies, about 38 responded to our surveys.
47% thought favorably about Bitcoin Payroll
Out of 38 companies who responded, 18 companies were friendly to the idea of implementing a Bitcoin payroll. This means that about 47% of Bitcoin-friendly companies have thought about Bitcoin payroll in some way or another. To be clear, these 47%, though many of them had not yet begun to implement Bitcoin payroll, were open to offering a Bitcoin wage in the future.
The companies that were not currently implementing Bitcoin payroll were given the opportunity to elaborate on their thoughts. While seven of the companies (18% of all the employers) replied with a general desire to implement this feature for employees in the future, six companies (16% of all the employers) explained that they were eager to offer Bitcoin wages as soon as employees expressed an interest. One company explained that the only reason they do not pay employees in Bitcoins is because of tax-related issues (something a Bitcoin software provider can easily provide a solution for).
10.5% already offer a Bitcoin wage
One of the most exciting statistics we found is that 10.5% of the employers who responded to the survey are already offering employees a Bitcoin wage. After asking a few of these companies to explain their reasoning for paying Bitcoin wages, we received these responses:
“We have employees dotted all over the world and some of them are only with us for very short-term projects, so Bitcoin is the perfect solution. Because we are in the tech industry, paying employees in Bitcoin actually attracts talent - people will choose to work for us rather than our competitors simply because of the Bitcoin factor. Also, a lot of our local employees receive a proportion of there income in Bitcoin - they see it as an investment or a way to support other Bitcoin businesses”
It is a very useful system to cut down the payroll fee, especially when you work at the international level. Sending from Europe to USA is $30-$50 per transaction. If you send from Bolivia to anywhere internationally there is a 30% charge per transaction. That is a 64% cut when you consider both inbound and outbound costs.
“We do a lot of business in Bitcoin and have been offering BTC to all our staff for about a year now. We…have one part time staff member who is paid 100% in Bitcoin.”
It is already happening. Companies are seeing the value of paying employees in Bitcoin, both from a human resources as well as a cost savings standpoint. The Bitcoin wage is opening companies up to entirely new talent acquisition markets that they would have previously been unable to reach, while also facilitating low cost international payroll payments. The demand is there for Bitcoin wages; more employers just need to start taking advantage of it. (Also, feel free to email us at email@example.com for more information regarding our surveyed companies paying Bitcoin wages).
Innovative ways employers have been using Bitcoin
Aside from just offering Bitcoin wages, several different companies have been implementing innovative ways to incentivize work with Bitcoins.
AcademyX, a computer training company based out of several locations in California, has begun to implement staff contests with Bitcoins as prizes. These contests have been able to encourage employees to master knowledge within the IT environment, such as file systems, while introducing them to the Bitcoin space in a good light.
IVPN, a VPN service if you could not tell from the name, had recently offered Bitcoin to customers in exchange for helping to test one of their new beta VPN clients. The program was a success, with over one hundred registrations and a few dozen bug reports submitted.
Companies are using virtual currency for various programs beyond just payroll and are reaping the benefits of a more engaged workforce, a more interactive user community and, of course, cheaper transactions to facilitate this all.
Unfortunately, not everything is sunshine and blossoms for Bitcoin payroll offerings. Several different aspects of the various international regulatory and market environments provide roadblocks to Bitcoin payroll adoption.
In Europe, many different regulatory regimes present problems to the adoption of Bitcoin payroll. Companies from Holland, Belgium and Italy have all discussed how it is impossible for their companies to provide Bitcoin wages. AltusHost BV, a Dutch company, explained that Dutch regulations prevent any sort of Bitcoin payroll since all salaries must be handled over a bank account. Fusa, a Belgian company, explained that the Belgian government requires that all social taxes be paid in Euros and that Bitcoins are not a legal payment mechanism for salaries. Finally, Italian company, HyperZ, solely cites, “regulatory issues” as to why there is no easy way to pay employees in Bitcoins. Luckily, as Bitcoin use becomes more widespread, these regulatory conditions are bound to change for the benefit of employers and employees. Until then, the Dutch, Belgians and Italians are just going to have to wait.
A somewhat different barrier to entry for Bitcoin payroll in Canada involves the current Interac system. Similar to Visa and Mastercard, Interac is a payment processing company. However, they have integrated technologies that allow for no-swipe transactions as well as email/phone money transfers. PoppenWorks, a Canadian company dedicated to building customer business presence by offering web design, web hosting and several other similar services, explains that they have not really seen any requests for Bitcoin wages because you can already email money to other people through Interac. This ease of use case just adds another notch to the Canadian skeptic’s belt when he asks the question, “So, why do we need Bitcoin?”
Closing the Loop
At the end of the day, companies are beginning to recognize the benefits of including a Bitcoin wage to the employer-employee relationship, as can be seen by the interest of Bitcoin payroll implementation (47%) and the number of Bitcoin-friendly companies already paying virtual currency wages (10.5%). Employers benefit from the human resources aspect as well as the cost benefits with a Bitcoin wage, while employees are provided an easy, reliable method to receive Bitcoin without the need of the bank intermediary. Employees are looking to get paid in Bitcoin and they are just waiting for employers to meet the demand. After all, it feels good to be able close the loop; wake up, work to get your employer paid in Bitcoins, get a Bitcoin wage, pay for food, drinks and other activities in Bitcoin, go to sleep to do it all over again.
Indeed, a world of circular interactions.
Co-Founder, Chief Strategic Officer
*People who are heavily invested in Bitcoin and truly understand Bitcoin to the point where they want to get paid in it are typically very forward looking, technically and financially savvy individuals with strong educational backgrounds, particularly within the IT space.