Danish Javed 07 Jan 2015 00:44 UTC
A simple tool for automatically receiving Bitcoin as part, or all, of a salary is closing the loop for Bitcoin ecosystems. Regardless of an employers view on the revolutionary currency, anyone can now opt for payment in BTC.
During 2014, Bitcoin saw an enormous surge in merchant adoption. Payment processors like BitPay made it easier for merchants to accept Bitcoin without ever dealing with the intricacies of it. Although a crucial step towards mainstream adoption, more places to spend Bitcoin had little to no advantage for the new user. Despite endless endeavors and collaborative efforts of Bitcoin entrepreneurs, acquiring Bitcoins still remains a very complex process for an everyday consumer.
The current bitcoin payroll solutions landscape is opening up a new realm of possibilities for the future of Bitcoin ecosystem. One of the key players in the bitcoin payroll space, BitWage has launched Bitcoin Payroll for the Individual, or BP(i), which allows anyone to receive their wage in Bitcoin without going through the tedious mess of buying Bitcoins from an exchange. An inverse process of BitPay, they are targeting a broad market varying from people who want to either experiment with Bitcoin or those who want to cut off their ties with the existing financial system.
Precious Metals company Amagi Metals issued a public release stating a partnership with Bitwage to offer their entire staff a part of their wages in Bitcoin. This move makes Amagi Metals to be one of the first companies to integrate bitcoin payroll systems in their operations. CEO of Amagi Metals Stephen Macaskill says:
“I'm really excited about taking Amagi to the next level in bitcoin adoption,” Macaskill said. “When we first started accepting Bitcoin more than two years ago, I saw it as a large experiment in monetary innovation. Now I see Bitcoin as the future, so I'm going to put my money where my mouth is, and I'm thrilled to have a team that thinks the same way. The integration of Bitwage into our operations is a step to ensure our company’s divorce from the U.S. Dollar in 2017.”
How does it work?
Rather than receiving a regular direct deposit, employees can choose to split their paycheck as they wish. The allocated percentage of a salary will convert into Bitcoin at a given market rate, minus the fees on conversion. The Bitcoins are then transfered to a wallet approved by the user. This feature is accessible to anyone, regardless of their income level, nationality or their employers' stance on Bitcoin.
Any prospective customer of Bitwage will be looking at the exchange rate they offer, according to the website:
"We partner with a variety of bitcoin exchanges to buy the bitcoins, and the exchange rate for an individual payroll order is the same as the rate we get when we buy those bitcoins, which is immediately before the bitcoin is sent to your public address."
In order to enroll in their service, users need to first contact their employer or the company's payroll provider to add Bitwage's corporate account as a secondary account for their monthly payments. Users are thereby authorizing Bitwage to receive a part of their paycheck on their behalf.
Launched in 2013, BitWage is currently in open beta testing phase. The California based start-up is a direct competitor to Bitcoin PayRoll Service by BitPay and Canadian PayRoll Firm WagePoint. Jonathan Chester, chief strategic officer of BitWage points out that "the main value proposition for bitcoin payroll services remains the same across the industry."
The BitWage system follows USA current tax perspective on bitcoin, treating all payments as USD for accounting purposes. They have partnered up with Gocheto Financials LLC - a Bitcoin Tax, Accounting And Financial Advisory Firm based in New York City to make sure they are fully compliant with United States Tax Code. This partnership allows employers and employees involved in the Bitwage solution to create capital gains reports and file them through Gocheto Financials.
Earlier last year in August 2014, Amagi Metals announced that they will not accept U.S dollars or any Fiat currencies for payment after 2016. By advocating the philosophy of Sound Money, Amagi exclusively trades in cryptocurrencies. This decision to incorporate a bitcoin payroll system seems to be the first step in an ongoing development for this Bitcoin-friendly company to completely abandon U.S dollar, according to their future plans.
While the example of Amagi Metals may be rare, it's really up to an individual to choose to get paid in Bitcoin. For instance, a Bitcoin user from Germany wrote about his experience with Bitwage on Reddit.
"I set up my direct deposit to the account number they provided me and my last paycheck was all converted to bitcoins automatically. My bank never saw a penny of my paycheck. That is the first step in dumping my bank forever."
Following the thread on reddit, it becomes clear that the short-term volatility scares off even the most active Bitcoin proponents. However, this has been a general criticism of Bitcoin. On the other hand, the service of Bitwage allows you to purchase Bitcoins seamlessly and it seems to be doing that very well.
Full article available here.