The time for employees to receive their salary in cryptocurrencies may come sooner than we expected. Today, more firms are creating innovative ways for people to receive cryptocurrencies. However, it remains unclear if workers are willing to put their livelihood in the hands of an unpredictable form of payment. Workers who make a living on digital applications and work based on their schedule have lived very differently from traditional employees.
At the moment, there are already a few companies that are offering solutions to pay employee salaries in cryptocurrencies. These solutions are also tailored for the sharing economy to make this area more effective in compensation. More importantly, the effective implementation of cryptocurrencies in the sharing economy can encourage the use of cryptocurrencies as a mainstream form of payment.
However, will workers put their livelihood in the hands of cryptocurrencies?
One of the difficulties of receiving cryptocurrency as a form of payment is the fact that you need to convert it back into cash. Unfortunately, cryptocurrencies have not found their way into retail stores, which makes it hard for people to use cryptocurrency on a daily basis. Most establishments today don’t accept Bitcoin, which is considered the most popular cryptocurrency in the world. This results in employees having to pay unpredictable transaction fees and paying taxes on the profits that they make when they can buy the cryptocurrency into cash.
To make things complicated, employees will still have to pay income taxes on top of the capital gain taxes. Anyone who receives cryptocurrency for goods and services must pay taxes. Therefore, employers should prepare themselves for the headaches that lie ahead. Employers must also issue 1099’s to their contractors. However, they cannot enter 1,000 Bitcoin on these 1099 forms. Instead, the value must be in dollars.
In the sharing economy, workers are known as gig workers. As they already find themselves in a financially uncertain situation, putting their livelihoods in the hands of cryptocurrencies may not exactly be the best move. It’s very dangerous to use cryptocurrency in the real world because it has a highly fluctuating value. Although so, the improved speed through these cryptocurrency payments can improve the gig economy.
The emergence of blockchain in cryptocurrency can effectively put payment processing platforms and companies that disperse money out of business. Experts see blockchain as a solution for workers in the gig economy. The need for the cryptocurrency-based payment in a sharing economy arises from the fact that it always takes an extended period for a freelancer to get paid.
Blockchain has a solution
The main problem with the freelance space is that that it is difficult for people to track down payment for a job that they have completed. Using the blockchain can be a solution to facilitate secure and speedy payment upon the completion of a job. Gig economy workers can potentially benefit from receiving money in the form of cryptocurrencies. Uphold is a digital money platform, which was founded in 2013. The objective of this platform is to help the economy workers receive their payment in the form of cryptocurrencies.
As a result, freelancers can also connect with anyone who requires service, regardless of where they are located. Therefore, the use of cryptocurrencies can reduce cross-border payment transaction fees. It can increase the quality of the lives of these freelancers who depend on it as a livelihood. On top of that, giant companies such as Airbnb and Starbucks are among a few large companies that are already getting paid using cryptocurrencies.
The bottom line
Gig economy workers are accustomed to uncertainty. This makes them a perfect fit to embrace a new form of money, which is cryptocurrency. They are highly suitable for the volatile nature of cryptocurrencies. However, we may have to wait for another generation of the workforce that is ready to receive cryptocurrency paychecks which have no central supervision.
Essentially, the technology that we need to make cryptocurrency payments for employees are already here. However, an evident problem in this model is having to convince employees that taking payments in the form of cryptocurrencies would benefit them. As mentioned in this article, gig economy workers are a great choice. However, expanding it into a larger context where normal office workers would receive payments in cryptocurrencies may spell trouble.
Despite this, we should remain positive about the possibility of employees accepting cryptocurrency in their workplace. The speed and anonymity associated with cryptocurrency can provide much-needed value in the lives of workers who often experience payment troubles.