Getting paid in crypto for my job: the good, the bad, and the ugly

People out there use to think cryptocurrencies are a quickly-getting-rich scheme. Of course, that’s not the case. A lot of workers worldwide are getting paid in crypto for a specific job. Because, you know, crypto is nothing else but money. Real money, available to exchange for goods and services. I can tell that personally since I receive my paycheck in crypto every month.

How is it? You may ask. You surely invest every penny and hold it to earn thousands of dollars later, just speculating! Well, no, my friend. I need to eat and pay my bills. I receive Bitcoin (BTC) and sometimes other coins as a salary since 2016. Back when every BTC was valued at around $580 and there was no DeFi of NFT's. And no, due to life-subsisting circumstances, I never could save an entire BTC. So, I never caught the $68,000 All-Time-High (ATH), sadly.

But I keep receiving my coins because they report me more benefits than traditional money (fiat). They also kindly provided me with some headaches, but that was mainly on me. Let me tell you some of my experiences.

Job for crypto: the good

The advantages are in plain sight. Crypto is immediate and global. So, no matter where I am, if I have a device with Internet, I can receive my payment easily. I don’t need to open a bank account for it, I don’t need to find my passport, I don’t need to wait for days or weeks, I don’t need to pay extra fees or argue with support because they got my data wrong. All I need to do is provide my crypto address to my employer, and that’s it.

The fees are another advantage, mostly. To make some comparisons, PayPal takes up to 5% per transaction, depending on the payment method and currency. Similar services like Payoneer can apply up to 3% in fees, and a “punishment” for inactivity of around $30. International wire transfers are the duurste, with fees rising to $50 per transaction. With cryptos, no matter the amount or destiny, the fees are usually less than a whole dollar.

Not to mention the requirements, by the way. PayPal is (in)famous for blocking accounts for no reason. To make an international wire transfer, you’ll need to provide data like “recipient’s name, address, banks SWIFT BIC, and bank account number, plus the International Payments System Routing Code, for certain countries” [Wells Fargo].

As a digital nomad or just a common person-who-wants-their-money, standing all of that seems infuriating. It’s your money, after all. You worked for it. It should be easy to receive it. And, once received, if someone blocks your account without explanation, well, that’s even more infuriating. Luckily, that doesn’t happen with crypto.

Nobody controls your crypto, only yourself. That’s another BIG advantage. Once in your wallet, nobody will seize it or place spending limits (like most banks do). Decentralisatie, yeah!

Some bad or tricky things

There’s no such thing as a free lunch, they say. Everything has its downsides, and crypto has them too. Especially if you don’t take care. First trick: volatility. That’s no secret, though. You may go to sleep with BTC at $40,000 and wake up the next day with BTC at $36,000 —haha, that was me, and no, I didn’t exchange on time.

The other way around is perfectly possible, and I can tell is a trap. I’ve earned money from price peaks, that’s true. I’ve lost the same or even more from price drops, that’s also true. What can I say? I’m not an excellent trader. Even the excellent traders have lost tons of money this way, but we all knew this could happen. There’s no point in blaming cryptocurrencies themselves. It’s our own fault, for not exchanging on time and betting with our coins instead.

So, I’d say volatility isn’t the main issue here, but the temptation. You know it’s volatile. You know you can earn more, but you also know you can lose more. Ergo, you never should bet on something you can’t afford to lose. If you receive the salary you need to eat and pay your bills in crypto, the wisest thing to do is to pay your debts right away, or exchange most of it for fiat or stablecoins immediately. Don’t play with fire.

Beyond temptation

Volatility (temptation) isn’t the only issue we might find when receiving crypto for our job. Unfortunately, we still need to use traditional money alongside crypto. There are a lot of businesses and services worldwide accepting crypto, but we’re not yet in the going-to-the-small-grocery-store-for-eggs-with-my-coins kind of acceptance. And that’s because of several problems: volatility (not in a tempting way), lack of education, and possible fee variation.

About the first thing, we can use exchange rates based on the USD (for instance, that’s how I receive my payment), and the merchants can use crypto payment processors for the matter. But again, there’s a lack of education on this topic. Not everyone knows how to use cryptos, and not everyone feels comfortable using them. The fee variation is another bad factor when it appears.

Soms, Bitcoin (and other coins) can be so crowded, that the commonly cheap fees quickly skyrocket. So, if you want to make a transaction in that network, you’ll have to pay it at that price or just forget it. There was a time, in December 2017, when I paid $50 for a single transaction. It’s not even the average-fees ATH (which was around $62 in 2021), but it hurts anyway. At least, we can say is a rare occurrence, and it can be solved with Lightning-netwerk nu.

Ugly stuff in the job for crypto

Ugly here will be the stuff that’s not exactly bad, but it’s… kind of, well, ugly. Like taxes. Yes, we also have taxes —depending on the country. The U.S. Internal Service Revenue (IRS), for example, taxes crypto as property. The taxes only apply if the investor decides to get rid of the crypto and sell it for fiat with an income.

In the short term (less than a year), the top rate would be around 37%. In the long term (more than a year), the top rate would be around 20%. And you’ll probably need to take note of every coin you receive and every transaction you make, including the value at that specific time. This way, profits or losses can be calculated.

Your wallet and other tools can help you with it, at least. Apps like Exodus show you the past value and the current value of every transaction. On the other hand, software and platforms like Koinly, Bitcoin Taxes, Crypto Tax Calculator, and TokenTax can help you in the task as well. Hiring a professional accountant, at least for the first declaration, isn’t out of order either.

I don’t live in the U.S., so, I don’t have first-handed experience with that. So far, I’ve just lived in countries with no regulations about it or no specific taxes for crypto. That’s another option, of course: pick crypto-friendly jurisdictions, if you can. El Salvador (Central America) and Duitsland (Europe) are good alternatives. You could get a job paid with crypto inside their jurisdictions.

More ugly things

There are two more ugly things I wanted to mention: scams and self-indulgence. Given the lack of regulations and/or consumer protection around crypto in so many countries, it’s easier for scammers and hackers to thrive here. The scams abound, especially because of that naïve belief that cryptos can make you rich. If you believe that, someone will take advantage of it, promising magical platforms to make money and taking YOUR money instead.

There are other types of scams and specialized malware designed by hackers. When you’re handling crypto all the time, you MUST learn about these things. If you don’t, they’ll know, because they’ll steal your coins easily. That’s what I mean by self-indulgence. Your cryptos are yours without limits, and that’s an advantage. But your cryptos are also yours to protect.

If you get scammed or hacked, it’s highly improbable that the authorities can track the criminals. Even if they do, like we already saw with Bitfinex, recovering your coins is very, very complicated. Also, there’s no “I forgot my password” here. You need to take precious care of your privésleutels. If you’re not learning constantly and taking security measures or if you lose your private keys, then your money will be gone for good. It’s ugly, but it’s true.

Some personal takes and tips

Let’s sum it up a bit. According to my own experience, my friends’ experience, and pure common sense, we can apply some measures to safely get paid with crypto on the job.

Consider the regulations of your country, first. Nine countries worldwide (including China and Morocco) have complete bans on cryptocurrencies. Other territories have very high taxes, like Côte d’Ivoire or Australia. If you’ve made your bed, lie in it.
Always receive and hold your coins in a non-custodial crypto wallet. This means, being totally controlled by yourself. And that doesn’t include accounts in centralized crypto exchanges. If you don’t have a proper private key, then they’re not your coins. They can be hacked or seized, and it’s very unlikely that you recover them (ejm, Bitfinex).
For the same previous reason, try to choose non-custodial crypto exchanges as well (Leuk vinden Alfacash). They just exchange your money, without keeping it themselves for long periods.
Never bet something you can’t afford to lose. Exchange your money to stabiele munten or fiat immediately upon arrival.
About the previous point again, try to keep long-term some of the original coins (for example, Bitcoin or Ethereum). They might go down, but they tend more to go up with the years.
Not only developers can get paid in crypto. I’m not a dev, in case you haven’t noticed so far. Thousands of companies worldwide, inside and outside crypto, are offering different coins as a payment method for jobs in Marketing, Sales, Support, Design, Operations, and much more. Even your current employer might agree to pay your job in crypto —you’ll never know if you don’t ask.

Remember: the opinions and insights featured in this category belong solely to its author(s) and don’t necessarily reflect those of Alfacash as a whole.

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